Research & Development lifeline needed to lift Australian performance says Deloitte has been saved
Research & Development lifeline needed to lift Australian performance says Deloitte
Proposed changes to Australia’s innovation system need to be reconsidered if we are to address the slide in our global performance.
6 August 2015: The Australian government is currently seeking input into how to improve our innovation system through the Senate Inquiry into the Australian Innovation System.
Following his recent appearance before the Inquiry, Deloitte’s Lead R&D Partner Sergio Duchini highlighted the importance of this process.
“With our economic prosperity absolutely tied to a highly innovative, R&D culture, Australia must improve our international competitiveness in this area,” said Mr Duchini.
Despite the Government’s significant annual investment in R&D, Australia languishes on international ratings. The INSEAD Innovation Index has Australia at 81st of 142 countries in regard to the efficiency of its innovation system, and the disconnect between industry and the R&D community has been highlighted over many years.
“The quality of our research institutions is world class, but as a nation we are not realising their potential. Our poor international ranking reflects our inability to translate this capability into commercial outcomes.
“In this context, the current Senate process and broader Tax White Paper discussion will play a crucial role in ensuring our R&D policy settings are targeted at boosting our performance globally, said Mr Duchini. “The right R&D policy settings are not only about supporting existing Australian business, they are also pivotal in attracting high value-add investment to Australia.”
“New global investment is incredibly mobile”, Mr Duchini explained. “As a country we need to have the right policy settings to ensure we are attracting sustainable international businesses to Australia against intense international competition.”
Mr Duchini emphasised this was not about out-bidding rival countries, but rather having innovative policy settings to support R&D. Of the changes being made to the current R&D arrangements, Mr Duchini highlighted the abolition of the $100 million expenditure limit, reintroduction of quarterly instalments, and maintenance of R&D support levels as being imperative.
“Making these adjustments would ensure that more high-end R&D is undertaken locally, and would see our biggest investors in R&D support the local supply chain more. The quarterly instalments are also critical in regard to cash flow implications for small to medium sized businesses becoming more innovative.”
Finally, Australia needs to ensure we are keeping pace with new innovations in supportive public policy. Mr Duchini spoke to the Senate Committee about the patent box concept, which encourages the local commercialisation of home-grown R&D.
“Nine jurisdictions around the world including the UK have a patent box program” Mr Duchini highlighted. “If as an economy we want Australia to generate well-paid, knowledge intensive jobs we need to ensure our government is keeping pace with their international competitors in regard to innovation policy settings,” concluded Mr Duchini.
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