Australia has strengthened in research and development (R&D) for 2017. The Australian innovation system report has been released which provides an analysis of key innovation indicators by exploring specific aspects of the system.
In this update, we summarise the best components of the innovation system report for 2017 ranging from growth and typical characteristics of R&D claims made in the 2016-2017 financial year. The official Australian Innovation System Report 2017 can be downloaded here.
Government grants for research and development had 3,542 newcomers to the program (companies registered for the first time). This has been a significant increase compared to previous years. In total, over 15,400 companies registered for the program resulting in a 3.0% increase from 2014-15.
In total, $16billion+ was invested into research and development with manufacturing making up 29.8% of the largest company sector. Australian small businesses increased their market share by 4.9% and expenditure by 5.29%.
The analysis suggests that R&D expenditure has an overall positive influence on growth in turnover, labour productivity and wages across all industries, but may have a negative effect on employment growth. These effects of R&D expenditure have generally become more pronounced over time, however they are subject to substantial variation across the spectrum of firms.
Approximately 49.3% of Australian's perceive good founding opportunities exist for a start-up ventures and 52.3% believe they have the skills to start a new business. Grant funding schemes such as the R&D program have contributed significantly to these statistics. Based on the "total early-stage" entrepreneurial activities in innovation-driven economies (2016), Australia is ranked 3rd in the world with Canada being first.
Innovation-active firms are more likely to report increases in sales, profitability, productivity, firm size, and other growth-related measures than firms that don’t innovate. There is also a positive relationship between the focus on innovation performance and firm growth — turnover growth rates are boosted by an average of 4.0 percentage points for all firms and 9.7 percentage points specifically for Turnover HGFs.
The statistics show that companies that innovate are more likely to see growth than those that do not. Persistent innovators generated 4x the employment growth and 5x the sales growth of regular innovators. High growth firms that focused on innovation performed 9.7 percentage points better than those that did not.
Australian businesses spent $16.7 billion on R&D in 2015-16 compared to $18.9 billion in 2013-14, a decrease of 12 per cent.
The results are welcoming to say the least, and shows the potential opportunities available to business owners in Australia. Government grant schemes such as the R&D and EMDG really contribute to overall GDP growth and employment opportunities.
For the team at IGNITE Alliance, we have seen first hand the growth rate of organisations that have innovated, from statups to established organisations extending their retail or service product lines. To help you determine if you are eligible for the R&D or EMDG grant we have created a chatbot named "Grant" who will ask you a series of questions, say hello at: https://www.igniteinnovation.com.au/grant