Australia’s research and innovation system is “broken” and needs “bold reform”, according to a major new independent report released on Tuesday.

Titled “Ambitious Australia”, it’s the culmination of a strategic examination of research and development in Australia, commissioned by the federal government in December 2024. It was led by Tesla chairwoman Robyn Denholm.

Ambitious Australia joins a long line of reports stretching back to the Hawke-Keating era in the 1980s and ‘90s, when public spending on science, research and innovation gained a substantial boost.

By the end of the 1990s, the fastest-growing component of Australia’s export mix was high-value, complex, finished products. Correspondingly, Australia’s rate of productivity growth was running well above the OECD average.

We are now in a very different world. As this new report shows, Australia has fallen behind its peers on many fronts.

Diagnosing the problem

If the report did nothing other than highlight how fragile Australia’s hard-won prosperity is, it would still have performed a valuable service. And on this point, it does not hold back.

The report notes Australia’s manufacturing as a share of gross domestic product (GDP) is the lowest among developed economies in the OECD.

Australia also has among the lowest share of spending on research and development in the OECD at 1.69% in 2023-24. This is from a peak of 2.24% of GDP in 2008-09.

And between 2010 and 2020, Australia’s........

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