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Experiment and Evolution in Science and Technology Policy: Recent Australasian Experience
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The Higher Education Review Committee was set up early in 1997 under the chairmanship of Roderick West. It is due to report by March 1998.
Department of Science and Technology, Priority Matters, AGPS, Canberra, 1997. The review leading to this report was conducted by Dr John Stocker, Australia's Chief Scientist.
For a useful collection of essays in this area see Philip Lowe and Jacqueline Dwyer (eds), International Integration of the Australian Economy, Reserve Bank of Australia, Sydney, 1994.
P. A. Romer, ‘Endogenous technological change’, Journal of Political Economy, 98, 5, 1990, pp. S71–S102.
In 1992, the ratio of Gross Expenditure on R&D (GERD) to GDP was 1.56 in Australia and 0.88 in New Zealand. The OECD average was 1.91. Over the previous decade the GERD/GDP ration grew, on average in the OECD, at 5.3% p.a., in Australia at 6.9% and New Zealand at 0.1%. (Industry Commission, Research and Development: Report No 44, Australian Government Publishing Service (AGPS), Canberra, 1995, p. 105). By 1994/5, Australian's GERD:GDP was 1.61%.
The causal relationships between R&D, economic growth and national welfare in a small open economy (like Australia's or New Zealand's) remain controversial. Most of the work on ‘new economic growth theory’ has been done on the assumption of a large closed economy, though important exceptions include G. Grossman and E. Helpman, Innovation and Growth in the Global Economy, MIT Press, Cambridge, Mass, 1991; and S. Dowrick, ‘Openness and Growth’, in Lowe and Dwyer, op. cit., Ref. 3, pages 9–41; and ‘The determinants of long run growth’, in Palle Andersen, Jacqueline Dwyer and David Gruen (eds), Productivity and Growth, Reserve Bank of Australia, Sydney, 1995.
Recent work for Australia suggests the rate of return on Australia's R&D effort might range from 25% to 90%, and possibly reach even 150%. The Industry Commission, which undertook this work (Industry Commission, op. cit., Ref. 5, Appendix QB) cautions, however, that these figures are ‘likely to overstate the returns to actual R&D’ (ibid., p. 9).
International comparisons are rendered somewhat difficult by variations in measurement methodology. But while government and university R&D in Australia comprised about 0.9% of GDP in Australian in 1992, the international average was nearer 0.6% (Industry Commission, op. cit., Ref. 5, p. 107).
Australian Research Council (ARC), The Strategic Role of Academic Research, AGPS, Canberra, 1994.
CSIRO, Rural Research—The Pay-off, CSIRO, Canberra, Occassional Paper no. 7, 1992.
Z. Griliches, ‘Productivity, R&D and the data constraint’, American Economic Review, 84, 1, 1994, pp. 1–23.
Australian Science and Technology Council (ASTEC), Setting Directions for Australian Research, AGPS, Canberra, 1990, and Research and Technology: Future Directions, AGPS, Canberra, 1991.
ASTEC, Developing Long-term Strategies for Science and Technology in Australia, AGPS, Canberra, 1996.
CSIRO, CSIRO Priority Determination 1990, Methodology and Results, Overview, CSIRO, Canberra, 1991.
Industry Commission, op. cit., pp. 890–1.
P. A. Dasgupta and J. E. Stiglitz, ‘Industrial structure and the nature of innovative activity’, Economic Journal, 90, 1980, pp. 266–93.
National Board of Employment, Education and Training, Crossing Innovation Boundaries: The Formation and Maintenance of Research Links between Industry and Universities in Australia, AGPS, Canberra, 1993.
Industry Commission, op. cit., Ref. 5, pp. 344–5.
Industry Commission, op. cit., Ref. 5, p. 358.
For an analysis of these schemes and their net benefits see P. H. Hall, ‘Incentives for industrial R&D: The Australian experience’, Science Policy, 23, 4, 1996, pp. 215–28. Selective industry support for R&D has been most marked in recent years in the ‘Factor F’ scheme applied to the pharmaceutical industry. The scheme was exhaustively reviewed by the Industry Commission (Industry Commission, The Pharmaceutical Industry, AGPS, Canberra, 1996).
P. A. Geroski, ‘Innovation, technological opportunity, and market structure’, Oxford Economic Papers, 42, 1990, pp. 586–602.
Dasgupta and Stiglitz, op. cit. Ref. 16.
Between 1981 and 1992, real business expenditure on R&D (BERD) grew at an annual rate of 13% p.a., though the BERD/GPD ratio for Australia still lies well below the OECD average. (Industry Commission, op. tit., Ref. 5, pp. 105–6).
Every dollar of tax revenue forgone is estimated to have induced between 60 cents and one dollar of business R&D under 150% tax concession. (Bureau of Industry Economics, R&D, Innovation and Competitiveness: An evaluation of the Research and Development Tax Concession, Canberra, AGPS, Research Report 50, 1993.)
Department of Primary Industries and Energy, Review of Rural Research, Report of the Task Force on Review of Rural Research, Canberra 1994; and Industry Commission, op. cit., Ref. 5, Section E.
OECD, Technology and the Economy, The Key Relationships, OECD, Paris, 1992; National Board of Employment, Education and Training, op. cit., Ref. 17.
Dr Mark Sceats, CRC Association Chairman, quoted in Sci Tech 17, 1, 1997, p. 1.
In July, 1997, Mr David Mortimer (Chairman and Chief Executive of TNT Asia Pacific Region) presented his government-commissioned report Going for Growth: Business Programs for Investment, Innovation and Export, AGPS, Canberra, to the Minister for Industry, Science and Tourism, the Hon. John Moore. He recommended that public funding cease for CRCs for which there was predominantly a private benefit, and be limited to $20 million per annum for new CRCs and CRCs with predominantly ‘public good’ collaborative science programs. The Mortimer Report also recommended further changes to industry innovation support, inter alia re-setting the R&D tax concession at 100%, but with an additional innovation rebate; consolidating rural R&D support into the hands of a single R&D corporation; and increasing the external funding requirement for government research agencies like CSIRO.