Not only is Australia one of the world’s richest countries, it’s also one of the most equal. As something of a one off, its distribution of wealth has actually become more equal since the financial crisis, something which sets it apart from the majority of the globe’s advanced economies.
Despite this, concerns have been raised about the nation’s lack of investment in research and development (R+D). Spending just $9 billion last year, companies such as IBM and Siemens have been known to invest more in the field over the same period of time, causing some to question whether Australia’s economy is going to falter as a result.
Australia’s start-up scene, for example, is underwhelming and outside of the main cities, almost non-existent. Venture capital investment dropped by 21% to $120 million according to the Australian Financial Review, a situation described as ‘unsustainable’ by Dr. Katherine Woodthorpe, CEO, Australian Private Equity and Venture Capital Association.
After the 2015/2015 Federal Budget, the Australian Government dropped the ‘Innovation Investment Fund’ which was designed to support new innovation projects by generating capital. The removal of such a scheme puts real pressure on the government to come up with something new which has the capacity to add life to the country’s fledgling start-up scene.
Many companies - especially within tech and science - rely on their ability to be innovative. That’s why 80% of corporate executives expected their R+D budgets to increase from 2014 to 2015. This is indicative of the marketplace that companies are currently operating in. Yet it’s imperative for countries too. Whether it’s improving the efficiency of a healthcare system or developing new forms of transport - the countries that invest now will be in a better place moving forward.
Australia’s advanced economy, topped off with its prestigious universities and colleges, should make it a hotbed for innovation. Yet its lack of investment in the space could inhibit it from reaching its promise. The Australian government must put a new scheme in place which encourages entrepreneurs to act upon their ideas. R+D is central to this and should be treated as a priority.
Expect Australia to invest, and invest soon.