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Queensland: State of Science 2007 - 08 R&D for Tomorrow’s Queensland

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Queensland: State of Science 2007 - 08

R&D for Tomorrow’s Queensland

Professor Peter AndrewsQueensland Chief Scientist

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TABLE OF CONTENTS

Executive Summary and Recommendation...........................................1Queensland: State of Science 2007-08...................................................4

1. Global Context.........................................................................................41.1 Contribution of R&D to economic, social and environmental outcomes.....41.2 Global R&D trends.....................................................................................51.3 Opportunities..............................................................................................7

2. Australian Context...................................................................................82.1 Standing within the OECD.........................................................................82.2 Commonwealth initiatives........................................................................112.3 Opportunities............................................................................................13

3. Queensland: 1998-2008.........................................................................153.1 R&D investments.....................................................................................153.2 Queensland’s R&D performance.............................................................283.3 Opportunities............................................................................................31

4. Queensland: Tomorrow.........................................................................334.1 Strong: creating a diverse economy powered by bright ideas..................334.2 Green: protecting our lifestyle and environment.......................................354.3 Smart: delivering world-class education and training...............................384.4 Healthy: making Queenslanders Australia’s healthiest people.................414.5 Fair: supporting safe and caring communities..........................................43

Appendices

Appendix 1: Smart State Innovation Funds, breakdown by program and sector

Appendix 2: Queensland R&D Priorities 2008 Implementation Report

Appendix 3: Datasets for R&D profiles

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Executive Summary and Recommendation

National and International Context

There is now universal recognition of the linkages between research and development (R&D) and innovation, and between innovation and economic productivity, environmental sustainability and social well-being.

The intensity of investment in R&D in Australia is climbing towards the average level within the Organisation for Economic Co-operation and Development (OECD), but growth rates in R&D investment of some key OECD players (EU, US) have slowed, while those of many non-OECD economies are growing more rapidly.

This national and international growth in R&D investment has been accompanied by escalating and often unmet demand for science and engineering employees.

There is a strong trend towards outsourcing R&D, to both national and international research providers, which raises an opportunity for research-rich economies, such as ours, to play an increasing role on the international stage.

The new Australian Government has committed to a comprehensive review of the national innovation system. At this stage, the outcomes seem likely to enhance the quality and quantity of Australia’s research base, but offer less support to convert that research into broader commercial and public good outcomes. Again, there is an opportunity for Queensland to lead.

Queensland: 1998-2008

Queensland’s investment in R&D infrastructure over the past decade has been a potent drawcard in attracting world-class scientists and a catalyst for growth in industries such as biotechnology.

Business expenditure on R&D (BERD) has also grown strongly, trebling over the past 15 years as a percentage of gross state product (GSP), but both BERD and gross expenditure on R&D (GERD) remain weak by national and international standards. In particular, Queensland is attracting less than its share of private equity (including venture capital) and Commonwealth R&D activity.

Higher education expenditure on R&D (HERD) in Queensland is comparable to that for Australia, and ahead of that for the OECD, and the number of scientific publications and subsequent citations mirror that level of expenditure.

Noteworthy is the level of business investment in HERD, which is more than double the proportion for Australia or the OECD. This is reflected in the formation of more start-up companies (per $100 million R&D expenditure)

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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than elsewhere in Australia, but significantly fewer than in the OECD. Given the strength of our public sector R&D base, there is a clear opportunity to more effectively translate our R&D into commercial outcomes.

Queensland: Future

The Queensland Government has committed to a series of ambitious targets that will reshape Queensland’s economic, social and environmental future. The R&D base built in Queensland over the past 10 years could and should play a major role in achieving these targets but, at present, there is no overarching long-term strategy that systematically details our R&D goals and guides the direction of our State Government investment in R&D.

Without such a strategy, we run the risk that our R&D will be high quality but low impact, overlapping but incomplete, applicable but not applied. Conversely, by putting in place a strategy that details what we wish to achieve and how we plan to get there, we can proceed with confidence that our investments will generate genuine benefits for all Queenslanders, and enable Queensland to play a leadership role, both nationally and internationally, as economies emerge from their current turmoil.

Recommendation

To maximise the return on the Queensland State Government’s investment in R&D, this report recommends that R&D Queensland coordinates the development of a 10-year R&D investment strategy that:

1. aligns the strategic goals and underlying R&D plans of Queensland Government departments with the shared interests of other departments and the overall direction of Government R&D, including that addressing the Toward Q2 targets

2. guides the strategic allocation of the Queensland Government’s investment in R&D between the core areas of infrastructure, skills, projects and alliances

3. identifies major economic, social and environmental issues that can be addressed most effectively through State Government investment in R&D

4. minimises overlaps and omissions in the State Government’s R&D activities by identifying opportunities to share infrastructure, information and human resources between Government departments

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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5. facilitates collaborative R&D with other public and private sector R&D providers through the provision of clear information on the present and future direction of the Queensland Government’s R&D activities

6. builds on Queensland Government R&D investments in priority industries and areas of internationally-competitive research strength by using them to leverage further investments from the Commonwealth, industry, private equity and philanthropy

7. drives the translation of public sector R&D to economic and social outcomes by assembling an integrated suite of programs that stimulate research commercialisation and industry innovation

8. catalyses the expansion of research strengths, sources of finance,

and markets for innovative goods and services through the formation of national and international R&D and commercialisation alliances

9. assists the Department of Education, Training and the Arts to effectively implement its 10-year science, technology, engineering and mathematics (STEM) education and skills plan by providing information on sectoral skills needs and associated education requirements

10. supports the continuation of the Queensland Government’s investment in R&D and provides the Queensland Cabinet and Queensland Treasury with clear guidance on investment in new R&D activities.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Queensland: State of Science 2007-08

In the past 10 years, Queensland has enjoyed a period of extended growth, reaping significant revenues from a growing population and a booming resources sector. But, as recent financial turmoil has amply illustrated, our long-term ability to survive and prosper in a global economy characterised by strong competition and international mobility will increasingly depend on our capacity to translate new knowledge and technology into value-added products and services.

Queensland also faces a complex environmental and social landscape – an ageing workforce, the growing concern of climate change impacts, a skyrocketing healthcare bill and the rise and rise of chronic disease. Given the scale and potential severity of these challenges, a collective, long-term approach to problem solving is essential.

As this report will demonstrate, a key to meeting these challenges lies in an ongoing commitment to science, and particularly research and development (R&D), to create the knowledge and technology required for innovative solutions.

1. Global Context

1.1 Contribution of R&D to economic, social and environmental outcomes

Innovation is a key driver of productivity and long-run economic growth. In particular, because sustained innovation is integral to increasing the efficiency of capital and labour, its absence will result in a decline in productivity, especially in a labour-constrained economy. No economy can support high wages and profits by continuing to produce standard products and services made with standard techniques.1

Technological advance based on R&D is, in turn, an essential component of innovation. From an economic viewpoint, R&D activity helps build the stock of knowledge in an economy, and thus both the development of new technologies and the capacity to use existing resources.2 Through this mechanism, spending on R&D has the potential to impact substantially on the ability of a nation to create and globally commercialise new products and processes.

In addition, knowledge and innovation have a major role to play in responding to our environmental and social challenges. The Stern Review on the Economics of Climate Change, for instance, stresses the need for increased

1 Gans, J. and Stern, S. (2003) Assessing Australia’s Innovative Capacity in the 21st Century, Melbourne.2 OECD (2004) Understanding Economic Growth, Paris.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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investments in R&D to underpin the development of new technologies in a carbon-constrained world3, while the role played by new technologies in responding to the climate change challenge was recently reiterated by Professor Ross Garnaut as part of the Garnaut Climate Change Review4.

Enhanced absorptive capacity

In addition to direct returns in the form of improved products and services, there are also indirect benefits to be enjoyed by businesses from investments in R&D. In particular, R&D helps to increase the capacity of firms to absorb and apply new knowledge.5 Numerous studies have shown that the more knowledge an entity has, the better it is at absorbing, using and generating new knowledge.6

The enhanced absorptive capacity resulting from local R&D investments can also increase the capacity of firms to benefit from the transfer of foreign R&D. Foreign stocks of knowledge make a significant long-term contribution to new technological developments, particularly for smaller economies,7 which benefit from R&D activity undertaken by the key investment hubs of the United States (US), Japan and Europe.

1.2 Global R&D trends

R&D investment

Gross domestic expenditure on R&D (GERD) in the Organisation for Economic Co-operation and Development (OECD) grew by 4.6% annually8 between 1996 and 2001, then slowed to less than 2.5% a year between 2001 and 2006.9

Business expenditure on R&D (BERD), which accounts for the majority of R&D performed in most OECD countries, has also grown over the past decade, although its pace of growth has slowed markedly since 2001. In the group of European Union (EU) 27 countries, BERD intensity increased only slightly between 1996 and 2006, to 1.11% of gross domestic product (GDP). This suggests that the EU is unlikely to meet its BERD target of 2% of GDP by 2010.10

3 Stern, N. (2006) Stern Review: The Economics of Climate Change, London.4 Garnaut, R. (2008) Garnaut Climate Change Review, Final Report, Canberra.5 Cohen, W.M., Levinthal, D.A. (1989). “Innovation and Learning: The Two Faces of R&D”, The Economic Journal 99, pp.569-596.6 Griffith, R., Redding, S., Van Reenen, J. (2002), “Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries”, Centre for Economic Performance Discussion Paper, 2457, pp.1-74, London.7 Productivity Commission (2007) Public Support for Science and Innovation, Melbourne.8 In real terms.9 OECD (2008) Science Technology and Industry Outlook, Paris.10 Ibid.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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In the US, BERD reached 1.84% of GDP in 2006, down from 2.05% in 2000, whereas in Japan it reached a new high of 2.62%. In China, the BERD-to-GDP ratio is catching up with the intensity of the EU27, at 1.01% of GDP in 2006.11

Overall, non-OECD economies such as China, South Africa, Russia and India now account for an increasing share of the world’s R&D – up from 11.7% in 1996 to 18.4% in 2005.12 In the same year, the global shares of total R&D expenditure in the three main OECD regions were around 35% for the United States, 24% for the EU27 and 14% for Japan. While Japan has maintained its global share since 2000, the EU’s share fell by 2% and the US fell by more than 3%, owing to very slow growth in BERD.13

With the onset of the global financial crisis, R&D and innovation expenditure are likely to suffer as companies around the world focus on cutting costs to secure their survival. One forecast for R&D expenditure in 2009 suggests thatthe decline in some sectors could be 40-50%.14

Internationalisation of R&D

As global competition intensifies, the business sector has focussed on internationalising knowledge-intensive corporate functions, including R&D, with the share of foreign affiliates in business R&D growing as foreign firms acquire local R&D-performing firms or establish new subsidiaries.15 Companies are also increasingly collaborating on innovation with external partners.

The trend towards R&D being sourced from abroad has also led to a change in the process by which R&D is financed, from direct public funding of business R&D towards indirect funding and the growing use of R&D tax incentives. This is evidenced by the fact that in 2008, 21 OECD countries offered tax relief for business R&D, compared to 12 countries in 1995, while in 2005 direct government funds financed on average 7% of business R&D, down from 11% in 1995.16

At the same time, US corporations funding private R&D are increasingly focussing their expenditure on developmental projects, with riskier long-term projects centred primarily around basic and applied research constituting a declining share of their total expenditure. Similarly, venture capitalists are

11 Ibid.12 OECD (2008) Open Innovation in Global Networks, Paris.13 OECD (2008) Science Technology and Industry Outlook, Paris.14 Vikas Sehgal, Principal and Executive Director, Booz & Company (2008) Hindustan Times,

New Delhi.15 OECD (2008) Science Technology and Industry Outlook, Paris.16 Ibid.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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reducing their funding for start-ups and early-stage companies in favour of later-stage companies.17

1.3 Opportunities

As developed countries such as Australia and the US face increasing competition to their innovation activities from emerging economies, they will need to not only move to more innovation-based goods and services, but also increase labour productivity in order to compete with low wages in countries such as India and China. Both strategies rely on innovation – the first on product innovation and the second on process and organisational innovation.18

Building global linkages

The internationalisation of R&D, including increased outsourcing of early-stage R&D by major multinational corporations, provides an avenue for Queensland to capitalise on the fact that a much greater proportion of our R&D is conducted by public sector research organisations than in other developed economies. The strengths of these research organisations – low-hanging fruit from a multinational perspective – offer us a clear opportunity to promote links to global value chains rather than remaining constrained by the limitations of regional markets.

Similarly at a local level, there is an opportunity for industry to more effectively exploit the knowledge generated by universities and government laboratories. Economic growth cannot, however, be achieved merely through the creation or absorption of knowledge, as additional resources need to be implemented in order to apply new knowledge to the production of goods and services.19 Other major inputs that are needed in this R&D process include investment in commercialisation, the diffusion of technologies among companies and a culture of entrepreneurship accustomed to taking up knowledge and developing it commercially.20

Profiting from the global financial crisis

While policymakers in the US and elsewhere have recently been focussed on providing a short-term economic stimulus to counteract the downturn that followed the collapse of the housing bubble, an increasing number of economists now believe that innovation can play a significant role in addressing this challenge, as it can help boost the economy in the short run

17 Atkinson, R. and Wial, H. (2008) “Creating a National Innovation Foundation”, Issues in Science and Technology, Washington D.C.

18 Ibid.19 University of Oslo (2008) TIK Working Papers on Innovation Studies No. 20080624, Oslo.20 Institute of Chartered Accountants in Australia (2008) “Entrepreneurs hard to measure”,

Charter, Sydney.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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as well as contribute to long-run economic growth.21 It is therefore important that governments and the private sector do not reduce their research spending. This is particularly significant because major societal challenges such as security of energy supply, food safety and climate change will remain long after the resolution of the financial crisis.22

Decisive government leadership can help focus public and private investment around potential high-growth sectors that will assist in driving economies out of the downturn. Some of these will be existing sectors that are potentially well positioned for future growth and highly globally networked, such as digital industries, low-carbon technologies and environmental services, and healthcare products and services.

Actions

Promote the continuation of the Queensland Government’s investment in R&D and drive its translation into economic, social and environmental benefits for the people of Queensland.

Catalyse the expansion of research strengths, sources of finance, and markets for innovative goods and services through the formation of national and international R&D and commercialisation alliances.

2. Australian Context

2.1 Standing within the OECD

Gross expenditure on R&D (GERD)

During the past few decades, Australia has been a strong economic performer amongst leading economic nations in the world, with real gross domestic product (GDP) growth exceeding 3% per annum for most years.23

Australia’s R&D intensity – GERD as a proportion of GDP – has increased even more rapidly, from $3.1 billion (0.95%) in 1976-7724 to $21 billion (2.01%) in 2006-0725, with an average annual growth rate of over 6%, reaching 14% over the past four years.

21 Atkinson, R. and Wial, H. (2008) “Creating a National Innovation Foundation”, Issues in Science and Technology, Washington D.C.

22 EUMonitor.net (2008), ‘Financial crisis expected to slow R&D investment’.http://www.eumonitor.net/modules.php?op=modload&name=News&file=article&sid=113239

23 ABS (2008) Australian Economic Indicators, 2008 (Catalogue No. 1350.0).24 Productivity Commission (2006) Econometric modelling of R&D and Australia’s productivity,

Melbourne.25 ABS (2008) Research and Experimental Development, All Sector Summary, Australia, 2006-

07 (Catalogue No 8112.0).

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Aligned with growth in R&D expenditure in recent times, Australia has developed several key strengths in the fields of science and innovation. For example, we generate an above average number of scientific publications (780 scientific articles per million of population compared to 493 for the OECD) and benefit from a strong skills base, including 8.4 researchers per 1,000 total employment – higher than the OECD average.26

Despite these strengths, Australia is a small R&D performer in global terms, accounting for 1.8% of OECD R&D activity in 2006.27,28 Figure 1 shows that Australia ranks 10th of all OECD economies in terms of GERD, and is still some way off the OECD average of 2.26% of GDP.29 In addition, data for 2002-04 show that while 43.6% of Australia’s firms undertake innovation30, which is on par with the OECD, Australia comes last in terms of firms with new-to-market product innovations.31 In particular, our small domestic market and distance from major international markets have restricted our ability to emerge as a global R&D player in such R&D-intensive industries as pharmaceuticals and information communication and technology (ICT).32

Business expenditure on R&D (BERD)

In Australia, R&D expenditure in the business sector has shown the largest increase relative to other sectors of the economy. Real business expenditure on R&D grew at an average annual rate of 8.1% between 1976-77 and 2002-03, compared with 5.2% for GERD.33 While a large proportion of this growth has been in the manufacturing and mining industries, services R&D has grown so strongly since the early 1990s that its expenditure is currently equal to manufacturing R&D.34

26 OECD (2008) Science, Technology and Industry Outlook, Paris.27 Based on GERD 2006 in ‘Purchasing Power Parity’ terms.28 OECD (2008) OECD.Stat, accessed 14 January 2008, http://stats.oecd.org/wbos/Index.aspx?

usercontext=sourceoecd.29 OECD (2008) OECD.Stat, accessed 5 December 2008,

http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd.30 OECD (2008) Science Technology and Industry Outlook, Paris.31 OECD (2007) Science Technology and Industry Scoreboard: Innovation and Performance in

the Global Economy, Paris.32 Productivity Commission (2006) Econometric modelling of R&D and Australia’s productivity,

Melbourne.33 Productivity Commission (2006) Econometric modelling of R&D and Australia’s productivity,

Melbourne.34 ABS (2008) Research and Experimental Development, Businesses, Australia 2006-07

(Catalogue No. 8104.0).

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Figure 1: R&D intensity by country in 2006*

Aus

tral

ia

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Country

* Iceland, Italy, Mexico, New Zealand, Switzerland and Japan are not included in this graph as values were not provided for these countries.Source: OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd.

Historically, business R&D expenditure showed a strong increase between the mid-1980s and mid-1990s.35 The 150% R&D tax concession introduced in the 1980s was the largest single mechanism for public funding support of business R&D, and helped lift R&D expenditure. In addition, competitive pressures heightened during the 1980s, especially in the manufacturing sector, due to the rise of Asian competition and reductions in trade barriers. Despite these advances, BERD in Australia remains comparatively weak, at 1.15% of GDP compared to the OECD average of 1.56%. Overall, Australia ranked 12th in terms of business expenditure on R&D of all OECD countries in 2006.36

Australia is also a relatively weak performer in terms of triadic patents, with approximately 16 patents filed per million population in 2005, relative to the OECD average of 37 per million population. In part, Australia’s low levels of BERD and patenting reflect our structural characteristics, with large resources and agricultural sectors and a relatively small manufacturing sector, but they are also illustrative of a lack of strong innovation networks. Only 40% of all

35 Productivity Commission (2006) Econometric modelling of R&D and Australia’s productivity, Melbourne.

36 OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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firms co-operate with an external partner for their innovation activities compared to 57% on average for the OECD.37

2.2 Commonwealth initiatives

Innovation policy

The New Directions for Innovation, Competitiveness and Productivity paper released by the Federal Labor Party in April 2007 emphasised the fundamental contribution of science to national well-being, the role of innovation in fostering the growth of Australia’s industries, and the need for continued investments in R&D infrastructure, collaborations and skills.38

The policy attributed Australia’s poor innovation performance to low expenditure on R&D and poor connections between the public sector research base and industry. It called for the development of a national innovation strategy to streamline the wide range of existing innovation programs and to ensure greater collaboration between the Commonwealth, state and territory governments for the broader national good.39

The subsequent Review of the National Innovation System was released on 29 August 2008. It emphasised the role of both technological and business innovation, the need for better connections between firms both nationally and internationally, and the importance of both soft and hard infrastructure in supporting a more innovative environment. It also recommended Commonwealth funding for university research overheads and introducing a stronger tax rebate scheme to encourage R&D investment in start-up companies. Surprisingly, it offered few tangible measures to encourage the development of new knowledge-intensive businesses based on the commercialisation of public sector research.40

The Government is currently considering the Review's recommendations in preparation for a 10-year White Paper on Innovation to be made available early in 2009.41

Human capital

The Commonwealth Government’s 2008-09 budget, released on 13 May 2008, included a range of innovation initiatives to assist Australia in

37 OECD (2008) Science Technology and Industry Outlook, Paris.38 Australian Labor Party (2007) New Directions for Innovation, Competitiveness and

Productivity, Canberra.39 Carr, K. (2007) Innovation Future for Australian Industry, Canberra

http://www.alp.org.au/download/now/innovation_future_for_australian_industry.pdf p. 2 accessed 4 Nov 2007.

40 T. Cutler (2008) Venturous Australia, Melbourne.41 Department of Innovation, Industry, Science and Research (DIISR), Australian Government

(2009), Canberra http://www.innovation.gov.au/innovationreview/Pages/home.aspx

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increasing its innovation strengths. In the main, these addressed human resource issues, with particular emphasis on attracting, training and retaining high-quality research staff, and mechanisms to link small and medium enterprises to new technologies.

The Commonwealth’s response to the Bradley Review of Australian Higher Education, released in December 2008, will be integral to building a highly-skilled workforce to ensure our economic and social progress. The Review recommends adopting the Council of Australian Governments (COAG) target of halving the proportion of Australians aged 20 to 64 years without a certificate level III qualification by 2020, and advocates using that target to determine areas of need and funding.42

The importance of human capital was also addressed by the Commonwealth Government in Skilling Australia for the Future, with a suite of new programs based on the philosophy that an investment in education, skills and training of our people is the single most important thing that we can do as a nation to lift productivity.43

Infrastructure

A review of the National Collaborative Research Infrastructure Strategy (NCRIS) in the first half of 2008 resulted in a new Strategic Roadmap for Australian Research Infrastructure, released by Senator Kim Carr, Minister for Innovation, Industry, Science and Research, on 4 September 2008. It recommends additional strategic infrastructure investments in eResearch; environmental sustainability; humanities, arts and social science; biological discovery and health; frontier science and technology; and safeguarding Australia.44

In October 2008, the Commonwealth Government announced the acceleration of the implementation of the Education Investment Fund (EIF), as part of its fast tracking of a nation-building agenda to help shield Australia from the global financial crisis. The Fund provides $11 billion over 10 years for capital expenditure and renewal and refurbishment in universities and vocational institutions, as well as in research institutions. The University of Queensland has been successful in the Fund’s first round, securing funding for veterinary science facilities on its Gatton Campus.

42 Department of Education, Employment and Workplace Relations (DEEWR), Australian Government (2008) Review of Australian Higher Education, Canberra.

43 Australian Government (2007), Skilling Australia for the Future, election 2007 policy document, Canberra.

44 DIISR, Australian Government (2008) Strategic Roadmap for Australian Research Infrastructure, Canberra.

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Carbon Pollution Reduction Scheme

On 15 December 2008, the Commonwealth Government released the White Paper on the Carbon Pollution Reduction Scheme. It targets reductions in greenhouse gas emissions of between 5% and 15% (from 2000 levels) by 2020, and 60% by 2050.

At an international level, Australia has also committed to meeting its Kyoto Protocol target to reduce greenhouse gas emissions by 60% on 2000 levels by 2050. On 3 December 2007, the Prime Minister signed the instrument of ratification of the Kyoto Protocol45, and on 11 March 2008 Australia's ratification came into effect. Australia will also participate in the negotiations working towards a post-2012 agreement.

2.3 Opportunities

The Commonwealth commitment to working with the states in the innovation space will allow some developments already underway in Queensland to be substantially accelerated. In other cases, Queensland’s initiatives will complement and extend Commonwealth activities.

Acceleration

STEM Training: Increasing the rate of development of knowledge-intensive industries in Australia will be hampered by shortages of technicians and researchers with STEM qualifications. If, for example, Australian business expenditure on R&D were to increase to 2% by 2010 (the EU target)46, we would require an additional 50,000 R&D personnel.47 At present, however, the proportion of students undertaking advanced studies in mathematics and sciences at year 12, undergraduate and postgraduate levels, are all falling.48,49 Queensland is addressing the underlying issues, including teacher quality, curriculum and closer linkages between schools and industry, with a 10-year STEM education and skills plan, much of which will dovetail with proposed Commonwealth initiatives.

45 The Kyoto Protocol is an international agreement of 1997 that has been ratified by 178 countries. It will reduce global greenhouse gas emissions by requiring developed countries to meet national targets for greenhouse gas emissions over the five-year period from 2008 to 2012.

46 European Union (2002) Lisbon Strategy, Brussels.47 Estimated based on linear relationships for Australia (over time) between (a) business R&D

personnel per thousand total employment and BERD (%GDP), and (b) GDP ($M) and total employment, and on an estimated GDP for 2010 of $1,287.95 billion (based on growth in Australian GDP between 1992-93 and 2006-07).

48 DEEWR, Australian Government (2008) Opening up pathways: Engagement in STEM across the Primary-Secondary school transition, Canberra.

49 DEEWR, Australian Government (2002-2007) Selected Higher Education Statistics, http://www.dest.gov.au/sectors/higher_education/publications_resources/statistics/publications_higher_education_statistics_collections.htm.

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NCRIS: Several proposed NCRIS focus areas align closely with Toward Q2 targets. There is also a general match with the Q-Tropics: Queensland Tropical Expertise Strategy 2008-2012. There is potential to work more strategically with the Commonwealth in these areas should further NCRIS funding become available.

Greenhouse Gas Emissions: Australia's commitments to the Carbon Pollution Reduction Scheme and the ratification of the Kyoto Protocol present new opportunities for Queensland businesses to participate in global carbon markets. Major projects are currently underway in the clean coal space, but future opportunities will extend to the reduction of emissions in a range of sectors, including energy industries (both renewable and non-renewable), waste handling and disposal, agriculture, manufacturing emissions, and fugitive emissions from fuels. Improved energy efficiency is another important area where R&D can have a major impact on the reduction of greenhouse gas emissions.

Extension

Capitalising on public sector research: New initiatives implemented or proposed by the Commonwealth Government are promising with respect to university research but are less supportive of its commercialisation. In order to derive sustainable economic and social outcomes from this research, Australia will not only be required to develop more knowledge-intensive industries, but also continue to establish and capitalise upon effective linkages between research institutions, industry, the public sector and investors. Queensland’s strong performance nationally in the commercialisation of university research through UniQuest and other commercialisation arms, complemented by bodies such as the Australian Institute for Commercialisation (AIC), offers an opportunity to take further leadership in this area.

International linkages: Regardless of increases in R&D intensity over recent years, Australia will remain a small player in the global R&D effort, and our markets for innovative goods and services will remain small relative to their global counterparts. Stronger international alliances linking research, education and industry, such as that between Queensland and the State of Washington, will enable us to gain better access not only to the 98% of the world’s R&D that is done outside Australia, but also to the corresponding sources of R&D funds, supply chains and markets.

Actions

Build on Queensland Government investments in skills, infrastructure and R&D by leveraging further investments from the Commonwealth Government.

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Drive the translation of public sector R&D to economic and social outcomes by assembling an integrated suite of programs that stimulate research commercialisation, industry innovation and international alliances.

3. Queensland: 1998-2008

Over the past 10 years, the Queensland Government has invested an unprecedented $297 million in R&D infrastructure, and leveraged a further $580 million, through the Smart State Innovation Funds (Appendix 1). This has transformed Queensland’s research base, resulting in the proliferation of 36 new research institutes, providing researchers with enviable world-class research facilities and placing Queensland on the map, nationally and internationally, as a hub of globally competitive research and innovation.

Future infrastructure commitments such as those for the Boggo Road Ecosciences Precinct and the Translational Research Institute will create further platforms for growth in the breadth and depth of the State’s research capacity, providing facilities necessary for internationally competitive research, and acting as a potent drawcard for the world’s leading scientists.

3.1 R&D investments50

Over the past 15 years, Queensland’s R&D intensity has increased substantially, from 1.02% to 1.53% of gross state product (GSP), mirroring Australian trends and exceeding the growth rate of the OECD (Figure 2a). This is primarily the result of an increased business R&D effort, which has almost trebled as a proportion of GSP over the past 15 years (Figure 2b). Non-business R&D intensity, in comparison, has decreased slightly over the same period (Figure 2c).

Figure 2: R&D intensity of Queensland, Australia and the OECD, 1992-2006

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

2.0%

2.2%

2.4%

2.6%

1992-93

1994-95

1996-97

1998-99

2000-01

2002-03

2004-05

2006-07

Gro

ss e

xpen

ditu

re o

n R

&D

(% o

f GD

P)

(a) GERD

OECD

AUST

QLD

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1.8%

1992-93

1994-95

1996-97

1998-99

2000-01

2002-03

2004-05

2006-07

Bus

ines

s ex

pend

iture

on

R&

D (%

of G

DP)

QLD

AUST

OECD

(b) BERD

50 GERD, which in the case of ABS data captures both capital and current expenditure on R&D, is divided into four sectors: business (BERD), higher education organisations (HERD), government (state and Commonwealth; GovERD), and non-profit organisations. In each case it refers to R&D performed in-house by the sector, but excludes R&D that is funded by the sector but performed by another sector; eg Queensland Government monies awarded to university researchers would fall under higher education sector R&D.

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0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

1.0%

1.1%

1.2%

1992-93

1994-95

1996-97

1998-99

2000-01

2002-03

2004-05

2006-07

Non

-bus

ines

s ex

pend

iture

on

R&

D (%

of G

DP

)

(c) Non-BERD

OECD

AUST

QLD

Source: ABS (2008) Research and Experimental Development, All Sector Summary, Australia, 2006-07 (Catalogue No 8112.0); OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd.

Queensland’s overall R&D intensity, however, remains poor by national and international standards. In 2006-07, Queensland R&D was valued at $3 billion, or 1.53% of GSP, trailing all other Australian states (Figure 3), and considerably below the OECD average of 2.26% of GDP51. This was in large part because business R&D, at 0.84% of GSP, still fell short of the Australian and OECD averages of 1.15% and 1.56%52 of GDP, respectively. Queensland also only accounted for 10% of Commonwealth Government R&D, far less than expected for a state with 20% of the national population53 and 19% of GDP54.

The following sections discuss these and other components of Queensland’s R&D expenditure in more detail.

51 OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd; OECD total figure for 2006.

52 Ibid.53 ABS (2008) Australian Demographic Statistics, June 2008 (Catalogue No 3101.0); based on

the average of quarterly estimated resident population for June 2006-June 2007.54 ABS (2007) Australian National Accounts: State Accounts, 2006-07 (Catalogue No 5220.0).

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Figure 3: R&D intensity of Australian states and territories by sector,

2006-07

0%

1%

2%

3%

4%

5%

SA VIC WA NSW TAS QLD NT ACT AUST

R&

D e

xpen

ditu

re (%

of G

SP)

Private Non-profitCommonw ealth GovernmentState/Territory GovernmentHigher EducationBusiness

% of Australia

SA VIC WA NSW TAS QLD NT ACT

Private Non-profit 0.5% 54.4% 5.7% 32.4% np 5.4% np np

Commonwealth Govt 14.9% 26.7% 5.2% 18.9% 7.2% 9.9% 1.0% 16.2%

State/Territory Govt 13.3% 20.6% 11.9% 29.9% 0.9% 20.9% 1.9% 0.3%

Higher Education 7.3% 26.0% 10.1% 28.5% 1.9% 17.0% 0.8% 8.5%

Business 6.9% 27.6% 16.1% 31.7% 0.8% 13.6% 0.9% 0.8%

Total 7.9% 27.5% 13.0% 29.6% np 14.3% np np

GSP 6.6% 23.7% 13.5% 32.0% 2.0% 18.7% 1.4% 2.1%

np = not publishable.Source: ABS (2008) Research and Experimental Development, All Sector Summary, Australia, 2006-07 (Catalogue No 8112.0).

Business investment in R&D

The key industry sectors contributing to Queensland’s R&D base are the mining industry, property and business services (including scientific research and technical and computer services), and the manufacturing industry (Table 1).55 These industries are also the State’s most R&D intensive (R&D expenditure as a proportion of gross value added by the industry).

Queensland performs better than the national average for R&D intensity of the property and business services sector, the construction industry, and the electricity, gas and water supply industry (Table 1). However, despite their

55 ANZIC 93 industry sector codes were used throughout, rather than the more recent ANZSIC 06 codes, to enable historical comparisons.

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relative strengths, the State’s mining and manufacturing industries lag behind the national average in R&D intensity, as do the wholesale trade industry and the finance and insurance sector.

Table 1: Queensland business expenditure on R&D (BERD) by industry sector, 2006-07

Industry BERD ($M)

% of Total Qld

BERD

Qld BERD

as % of Aust

Qld Business

Gross Value Added as % of

Aust

R&D intensity (BERD as % of

Business Gross Value Added)

Qld Aust

Mining 429.4 26.2% 16.9% 20.1% 2.85% 3.39%Property & business services 393.9 24.0% 19.2% 15.5% 2.00% 1.61%

Manufacturing 392.2 23.9% 9.9% 17.2% 2.12% 3.69%

Construction 149.2 9.1% 36.2% 21.9% 0.96% 0.58%

Wholesale trade 78.1 4.8% 9.3% 17.8% 0.92% 1.76%

Finance & insurance 41.0 2.5% 4.1% 13.1% 0.42% 1.32%

Electricity, gas & water supply

29.6 1.8% 25.9% 15.9% 0.84% 0.51%

Agriculture, forestry & fishing

20.7 1.3% 19.4% 21.4% 0.43% 0.48%

Transport & storage 16.7 1.0% 14.6% 24.2% 0.14% 0.23%

Retail trade 12.9 0.8% 11.1% 23.2% 0.10% 0.20%

Personal & other services 5.3 0.3% 10.3% 21.0% 0.14% 0.28%

Cultural & recreational services

3.6 0.2% 14.8% 15.0% 0.16% 0.16%

Health & community services

1.5 0.1% 3.8% 19.0% 0.01% 0.07%

Education 1.1 0.1% - 18.7% 0.01% -

Accommodation, cafes & restaurants - - - 24.5% - -

Communication services - - - 15.8% - -

Total 1,639.9 100.0% 13.6% 18.6%* 1.05%* 1.43%*

* Excludes government administration and defence sector and dwellings owned by persons.- = not available or not publishable; green = good by national standards; red = poor by national standards.Source: ABS (2008) Research and Experimental Development, Businesses, Australia, 2006-07 (Catalogue No 8104.0); ABS (2007) Australian National Accounts: State Accounts, 2006-07 (Catalogue No 5220.0).

The substantial increase in business R&D expenditure over the past 15 years has resulted primarily from increases in R&D of the mining, property and business services, and manufacturing sectors, as well as a five-fold increase in R&D expenditure by the construction industry in the past two years (Figure 4). These increases are partly a reflection of strong industry growth, combined with significant increases in R&D intensity in the construction and property and business services sectors. However, in the case of the health and community services and transport and storage industries, strong industry growth has been negated by reductions in R&D intensity.

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Figure 4: Queensland industry trends in R&D expenditure and gross value added, 1992-93 to 2006-07

0

50

100

150

200

250

300

350

400

450

500

BE

RD

($M

, rea

l pric

es)

0

2

4

6

8

10

12

14

16

18

20

Bus

ines

s gr

oss

valu

e ad

ded

($B

, rea

l pric

es)

Mining

Manufacturing

Property & business services

Construction

Wholesale trade

Finance & insurance

Electricity, gas & water supply

Agriculture, forestry & fishing

Retail trade

Personal & other services

Transport & storage

Communication services

Education

Health & community services

Cultural & recreational services

Source: ABS (2008) Research and Experimental Development, Businesses, Australia, 2006-07 (Catalogue No 8104.0); ABS (2007) Australian National Accounts: State Accounts, 2006-07 (Catalogue No 5220.0).

Private equity investments

Australian venture capital investments (including seed, start-up, early development and expansion stages) were almost twice the OECD average in 2006, a far cry from the situation in 2003, where Australia was less than one-tenth of the OECD average.56 Total private equity investments (venture capital plus later-stage investments) decreased in 2007-08, in line with the negative global economic climate (Table 2). However, Queensland secured only 11% of total Australian private equity investments in 2007-08, and our share has progressively decreased over the past three years (Table 2).

Pre-seed Investment: Several recent developments promise to improve the access of Queensland’s research sector to very early-stage finance. Brisbane Angels Pty Ltd, a Brisbane-based business angels network formed in late 2006, is a significant achievement for Queensland. Consisting of approximately 70 members, more than half of whom are investors, the company actively invests in early-stage technology companies primarily in South East Queensland. Also in late 2006, bluebox, the commercialisation arm of the Queensland University of Technology, was established to consolidate the University’s technology transfer and commercialisation activities. With a similar aim to improve university R&D commercialisation, James Cook University established a Manager of Innovation and Commercialisation at its Townsville campus in November 2008, through a partnership with the University of Queensland’s commercialisation arm, UniQuest Pty Ltd. The $4 million Proof-of-Concept Fund announced in 2008 as part of Smart State Strategy: 2008-2012 will facilitate these initiatives.Table 2: Queensland and Australian total private equity investments, 2005-06 to 2007-08*

Private Equity Investments

2005-06 2006-07 2007-08

56 OECD (2008) Science, Technology and Industry Outlook, Paris, pp 41 and 84; as a percentage of GDP; includes seed, start-up, early development and expansion stages.

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Amount ($M)

Queensland 332 375 139

Australia 2,253 2,870 1,282

% GSP

Queensland 0.18% 0.19% 0.06%

Australia 0.23% 0.27% 0.11%

Qld/Aust (%) 14.74% 13.07% 10.84%

* Includes venture capital plus later-stage investments.Source: Thomson Reuters & The Australian Venture Capital Association Limited (AVCAL) (2006, 2007, 2008) Thomson Financial & AVCAL Survey/Year Book, Fiscal Years Ended June 30, 2006; 2007; 2008.

Seed Funds: A major market gap has emerged with the cessation of teQstart, which provided investment funding to 26 start-up companies and assisted them to leverage almost $78 million in further investment, a ratio of 14:1.57 This situation has been further exacerbated by the closure of the Commonwealth’s Commercial Ready Grants.58 In 2007-08, Queensland received $25.6 million (19% of the national total) in funding from Commercial Ready.59

Early Development and Expansion Stages: The venture capital gap at the next stage of investment was identified in the Smart State Council report, Business Investment in Research and Development in Queensland (Including Access to Capital).60 A key recommendation of this report was that the Queensland Government seek to attract venture capital funds to Queensland to increase total investment per annum to $200 million. This recommendation has been reiterated in a more recent Smart State Council report, Attracting investment into Queensland’s knowledge-intensive industries.61

57 Department of Tourism, Regional Development and Industry, Queensland Government, internal report.

58 Commercial Ready (including Commercial Ready Plus) was a competitive merit-based Commonwealth Government grant program for small- and medium-sized enterprises and companies controlled by Australian universities and public sector research organisations. It supported R&D through to proof of concept and early-stage commercialisation activities. The scheme ceased in May 2008.

59 http://www.ausindustry.gov.au/Pages/AllAusIndustryPrograms.aspx60 www.smartstate.qld.gov.au

61 www.smartstate.qld.gov.au

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Higher education sector

Higher education R&D was valued at $919 million in 2006, accounting for 17% of the national total, slightly less than the 20% expected on a per capita basis.62,63 Over the past 15 years, Queensland’s higher education R&D has increased gradually, in line with national trends, from 0.39% of GSP to 0.47% of GSP, consistently exceeding the OECD average, which in 2006 stood at 0.39% of GDP.64,65

One striking characteristic of Queensland’s higher education sector is its strong performance in securing industry R&D investments. Industry funded 13.5% of Queensland higher education R&D in 2006, more than double the Australian and OECD averages (Table 3).66,67 The Queensland higher education sector also performed well in leveraging funds from donations, bequests and foundation investments.

Table 3: Queensland higher education expenditure on R&D (HERD) by funding source, 1996 and 2006

Funding Source% of Qld HERD Qld as % of Aust HERD

1996 2006 1996 2006

General university funds 62.7% 56.7% 16.0% 16.3%

Business 7.4% 13.5% 23.7% 37.7%

Australian competitive grants 14.6% 12.2% 15.0% 11.4%

Other Commonwealth Government 8.4% 6.6% 20.2% 13.6%

State & local government 2.6% 5.2% 19.6% 23.8%

Overseas 1.4% 3.6% 21.9% 21.0%

Donations, bequests & foundations 2.6% 1.9% 17.7% 27.3%

Other Australian 0.2% 0.4% 10.0% 13.2%

Total 100% 100% 16.7% 17.0%

green = good by national standards; red = poor by national standards.Source: ABS (2008) Research and Experimental Development, Higher Education Organisations, Australia, 2006 (Catalogue No 8111.0).

Unfortunately, an equally striking characteristic of Queensland’s higher education sector, at least as reported by the Australian Bureau of Statistics (ABS), is its weak performance in securing Australian competitive grants (11.4% of the national total) and other Commonwealth Government funding 62 ABS (2008) Research and Experimental Development, Higher Education Organisations,

Australia, 2006 (Catalogue No 8111.0).63 ABS (2008) Australian Demographic Statistics, June 2008 (Catalogue No 3101.0); based on

the average of quarterly estimated resident population for June 2006-June 2007.64 ABS (2008) Research and Experimental Development, Higher Education Organisations,

Australia, 2006 (Catalogue No 8111.0).65 OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?

usercontext=sourceoecd66 ABS (2008) Research and Experimental Development, Higher Education Organisations,

Australia, 2006 (Catalogue No 8111.0).67 OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?

usercontext=sourceoecd; OECD total for 2005.

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(13.6% of the national total) (Table 3). In both cases, Queensland appeared to perform significantly worse in 2006 than a decade earlier, a worrying trend given the substantial State Government investment in higher education R&D infrastructure.

Fortunately, more recent data from individual Commonwealth grant schemes are more encouraging.68 As shown in Table 4, Queensland’s share of national competitive grant funding awarded by the Australian Research Council (ARC) (18%) and the National Health and Medical Research Council (NHMRC) (16%) in 2008 is considerably higher than that in 2005 (12.5% and 12.3% respectively).69

Table 4: ARC and NHMRC national competitive grant funding awarded to Queensland, 2005-2008*

Australian Competitive Grant Scheme^

Total Grants Awarded to Queensland

2005 2006 2007 2008

ARC grants

Queensland ($M) 42.3 72.6 94.1 88.2

Qld/Aust (%) 12.5% 15.7% 19.8% 18.0%

NHMRC grants Queensland ($M) 67.5 67.1 84.9 102.3 Qld/Aust (%) 12.3% 13.9% 12.2% 16.0%

* Annual figures refer to the total value of new grants commencing in that year, including out years, and are not directly comparable with HERD values for the same years.^ ARC grants includes ARC Centres of Excellence, Research Network Grants, Discovery Project Grants, Discovery Indigenous Researchers Development Grants, Linkage Project Grants, Linkage Infrastructure, Equipment and Facilities Grants, Linkage International Grants, and fellowship schemes; NHMRC grants include Career Development Awards, Career Awards, Infrastructure Grants, Project Grants, Program Grants, Strategic Research Development Committee Awards, Strategic Awards, Training Fellowships, and Scholarships.Source: ARC (2008), National Competitive Grants Program Dataset, http://www.arc.gov.au/general/searchable_data.htm; NHMRC (2008) NHMRC Research Funding Dataset 2000-2008, http://www.nhmrc.gov.au/grants/dataset/rmis/index.htm.

This more optimistic outlook is also supported by the fact that publication and citation data – key indicators of the productivity and academic impact, respectively, of the higher education R&D sector – are on par with our 17% share of national higher education R&D expenditure (Table 5).70

68 Commonwealth grant values refer to total award amounts, often expended over three or more years. Consequently, grants awarded in 2008 will affect HERD primarily in 2008, 2009 and 2010. Conversely, Queensland’s performance in Australian competitive grants reported by the ABS for 2006 reflects grant success in earlier years, primarily 2004, 2005 and 2006.

69 ARC and NHMRC competitive grants are a major source of research funding for the higher education sector. In 2006-07, total ARC and NHMRC expenditure was $1.07 billion (ARC Annual Report, 2006-07; NHMRC Research Funding Facts Book, 2007) compared with $945.7 million of Commonwealth competitive research grants to the higher education sector in 2006 (Research and Experiment Development, Higher Education Organisations, Australia 2006, ABS Catalogue No 8111.0).

70 L. Butler, K. Henadeera, B. Biglia, Research School of Social Science, Australian National University (2006) State and Territory based assessment of Australian Research, Research Evaluation and Policy Project; refers to scientific research and review articles published in externally-reviewed journals listed in Thomson Scientific’s Science Citation Index for 2002. Similar results were obtained for articles published in all areas of research, rather than just

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Table 5: Scientific publication output and citations of Queensland relative to Australia and the world, 2002*

 Research Field

Publications Citations Citations per Publication

Qld as % of Aust

Qld as % of Aust Qld Aust World

Mathematical Sciences 12.3%   -   - 3.1 2.6

Physical Sciences 11.0% 11.8% 8.5 7.9 6.2

Chemical Sciences 17.6% 15.7% 6.3 7.0 6.7

Earth Sciences 16.1% 13.9% 5.2 6.0 5.1

Biological Sciences 20.2% 18.1% 8.8 9.8 10.7

Information, Computing and Communication Science 24.5% - - 3.3 4.4

Engineering and Technology 18.6% 17.4% 3.4 3.7 3.8

Agricultural, Veterinary and Environmental Sciences 27.9% 26.6% 4.3 4.5 4.4

Medical and Health Sciences 16.3% 15.0% 8.9 9.7 9.1

Other Science 23.6% 27.9% 14.7 12.4 13.9

Total 17.7% 16.8% 8.1 8.5 7.5

* For research and review articles indexed in the Science Citation Index (Thomson Scientific) and published in 2002; this allows sufficient time for citations of articles over the four years 2002-2006. Publications and citations have been divided into research fields for regional comparisons, as publication outputs and citation indices differ significantly between research fields. This information refers to scientific articles by all sectors, not just the higher education sector, as citation information is not readily available at the state level for the higher education sector alone. However, similar publication output ratios for Queensland versus Australia were obtained for the higher education sector for 2006 (AVCC, articles in scholarly refereed journals – http://www.universitiesaustralia.edu.au/documents/publications/stats/HERDC-TimeSeriesData-1992-2006.xls ).Source: Linda Butler, Kumara Henadeera, Bev Biglia, Research School of Social Sciences, Australian National University (2006) State and Territory based assessment of Australian Research, Research Evaluation and Policy Project.

Commonwealth Government

Queensland does not host its share of Commonwealth Government R&D activity, accounting for only 10% of the national total in 2006-07, with little improvement over the past 10 years.71

Our performance in attracting other Commonwealth funds has been mixed.In the case of NCRIS, for example, only $55 million (11%) of the $499 million committed under Round 1 (Phase 1 and 2) has been invested in Queensland.72 Similarly, in the 2009 round of Education Investment Fund

science, from higher education organisations for 2006 (AVCC, articles in scholarly refereed journals – http://www.universitiesaustralia.edu.au/documents/publications/stats/HERDC-TimeSeriesData-1992-2006.xls).

71 ABS (2008) Research and Experimental Development, All Sector Summary, Australia, 2006-07 (Catalogue No 8112.0); value refers to R&D performed, not external R&D funded, by the Commonwealth Government.

72 Figures provided by the Department of Tourism, Regional Development and Industry, Queensland Government.

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(EIF), Queensland attracted only $47 million (8%) of the $580 million on offer.73

On the other hand, successful bids for Commonwealth Environmental Research Facilities (CERF) funding in the environmental space resulted in roughly half of the Commonwealth’s $100 million investment coming to Queensland.74

Other positive initiatives currently under development include –

the commitment of $20 million by the Commonwealth Government to establish a Centre of Excellence in Water Recycling in Queensland

a $100 million Commonwealth Government commitment to establish the Translational Research Institute in Brisbane, due to open in 2012.

Queensland Government R&D investment

Queensland Government expenditure on R&D can be expressed in two ways –

1. the total value of R&D performed by Queensland Government, including funds leveraged from external sources (ie R&D expenditure as reported by the ABS), referred to here as Queensland Government in-house R&D

2. the total outlay of the Queensland Government on R&D (excluding leveraged funds) be it performed in-house or externally, referred to here as Queensland Government R&D outlay.

Queensland Government in-house R&D is vital for informing policy and meeting specific R&D needs of the State, including industry development, environmental monitoring, and improving the State’s health and social services. Queensland Government R&D outlay, on the other hand, reflects the Government’s overall commitment to R&D as a driver of improved economic, social and environmental outcomes. In particular, those funds invested in external R&D sectors such as higher education organisations and industry have the potential to leverage further investments from other sources and build critical mass in the State’s R&D sectors.

Since 1998-99, the value of Queensland Government in-house R&D, as reported by the ABS, has halved as a proportion of GSP, from 0.23% – the best in the nation75 – to 0.11% (Figure 5).

73 Media release, Hon Julia Gillard MP, 12 December 2008, http://www.deewr.gov.au/Ministers/Gillard/Media/Releases/Pages/Article_081212_151616.aspx.

74 Department of the Environment, Water, Heritage and the Arts, Australian Government, http://www.environment.gov.au/programs/cerf/.

75 territories excluded.

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Figure 5: Queensland R&D intensity by sector, 1992-93 to 2006-07

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

R&

D e

xpen

ditu

re (%

of G

SP

)

BusinessC'wealth GovernmentState GovernmentHigher EducationPrivate Non-profit

Source: ABS (2008) Research and Experimental Development, All Sector Summary, Australia, 2006-07 (Catalogue No 8112.0).

Data on Queensland Government R&D outlay are not available from the ABS, but are collected from Queensland Government agencies by the Office of the Queensland Chief Scientist (see Queensland R&D Priorities 2008 Implementation Report, Appendix 2).76 These data show that Queensland Government R&D outlay has decreased marginally as a proportion of GSP in the past four years, from 0.10% ($167.6 million) in 2004-05 to 0.09% ($195.6 million) in 2007-08. Amounts invested in in-house R&D have progressively decreased as a proportion of GSP, whereas outsourced R&D investments have been more variable (Figure 6).77

76 Data was first collected for the 2003-04 financial year, but comprehensive information on the source of funding was only obtained for 2004-05 onwards.

77 It should be noted that discrepancies exist between R&D data collected by the Office of the Queensland Chief Scientist and that reported for Queensland Government by the ABS, with ABS values for in-house R&D expenditure exceeding Office of the Queensland Chief Scientist figures by $68.1 million in 2004-05 and $45.6 million for 2006-07. The source of these discrepancies is being investigated.

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Figure 6: Queensland Government R&D outlay in in-house and outsourced R&D, 2004-05 to 2007-08*

0.00%

0.01%

0.02%

0.03%

0.04%

0.05%

0.06%

0.07%

0.08%

2004-05 2005-06 2006-07 2007-08

Que

ensl

and

Gov

ernm

ent R

&D

out

lay

(% G

SP

)

In-houseOutsourced

* 2005-06 data does not include Queensland Health in-house R&D of $12.6 million as the funding sources of this R&D were not disclosed; however, this amount is not sufficient to significantly alter R&D investment as a percentage of GSP.Source: Calculated by the Office of the Chief Scientist based on information entered by Queensland Government agencies into the R&D Priorities Database.

In addition to varying from year to year, external R&D investments made by the Queensland Government, particularly through the Innovation Funds, have been heavily influenced by the availability of co-investment, rather than by other strategic priorities. This was particularly the case in the first round of the Innovation Funds, where the emphasis on biotechnology has had very positive outcomes, with the influx of outstanding researchers and follow-on investments. There is a real opportunity for similar, but more strategically targeted, investments in other priority industries, as reflected by the data in Table 6.

Table 6: Smart State Innovation Funds recipients by sector*

Sector No of Recipients

Total Funding

$M %

Biotechnology 65 223.7 61%

Environmental Technologies 14 56.2 15%

Advanced Manufacturing 16 32.9 9%

Aviation and Defence 10 12.8 3%

ICT 12 5.3 1%

Processed Foods 3 0.6 <1%

Creative Industries 2 0.1 <1%

Other 20 34.4 9%

Total 142 366.0 100%

* Includes Smart State Research Facilities Fund (SSRFF) and Rounds 1-3 of Smart State Innovation Funds.Source: Department of Tourism, Regional Development and Industry, Queensland Government (see Appendix 1).

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Future investments in other priority industries and research strengths will also need to take account of the balance of R&D investments between the State, industry and higher education. For example, Table 7 illustrates the complementary investments in different areas of critical mass (ie R&D area as a percentage of Queensland) and research strength (ie Queensland as a percentage of Australia) of the Queensland Government, business and higher education R&D sectors.

Table 7: Queensland business and higher education sector R&D critical mass and strengths compared with Queensland Government expenditure*

Qld Government (2007-08)^ Business (2006-07) Higher Education (2006)

R&D Area % R&D Area(Industry sector)

R&D Area as %

of Qld

Qld as %

of Aust

R&D Area(Socio-economic

Objective)

R&D Area as %

of Qld

Qld as %

of Aust

Environmentally Sustainable Queensland

46% Mining 26% 17% Health 30% 16%

Health andWell-being 17% Property and

business services 24% 19%Social development & community services

8% 14%

Smart Industries 12% Manufacturing 24% 10% Environmental management 8% 20%

Enabling Sciences and Technologies 11% Construction 9% 36% Manufacturing 7% 21%

Tropical Opportunities 7% Electricity, gas and

water 2% 26% Mineral resources (excluding energy) 4% 38%

Safeguarding Queensland 5% Agriculture, forestry

and fishing 1% 19% Commercial services & tourism 2% 23%

Transport 1% 9%

Environmental policy frameworks 1% 22%

* Includes the top four Queensland R&D areas in the business and higher education sectors in terms of (a) critical mass (ie the proportion of business or higher education R&D expenditure in that area as a proportion of total sector R&D; R&D Area as % of Qld), and (b) national research strength (ie the proportion of national business or higher education R&D that occurs in Queensland; Qld as % of Aust). Less than eight R&D areas exist in each case because areas of critical mass sometimes overlapped with areas of national research strength. Research area categories were chosen based on available data. For business R&D, areas refer to industry sectors, whereas for higher education R&D, R&D areas refer to socio-economic objectives.^ Refers to total Queensland Government R&D expenditure reported by agencies, including in-house and outsourced R&D funded by both Queensland Government and other sectors.Source: ABS (2008) Research and Experimental Development, Businesses, Australia, 2006-07 (Catalogue No 8104.0); ABS (2008) Research and Experimental Development, Higher Education Organisations, Australia, 2006 (Catalogue No 8111.0); Queensland R&D Priorities 2008 Implementation Report (Appendix 2).

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3.2 Queensland’s R&D performance

While R&D expenditure reflects a commitment to knowledge creation and technology development, it does not provide an assessment of R&D performance.

To gain an understanding of how Queensland’s R&D performance compares with the rest of Australia and the OECD, a range of R&D input and output indicators were mapped to create R&D profiles for each region (Figures 7 and 8).

Figure 7: R&D profile – Queensland versus Australia

0%

50%

100%

150%

200%

250%

Gross expenditure on R&D (GERD, % of GDP)

Business expenditure on R&D (BERD, % of GDP)

Government expenditure on R&D (GovERD, % of GDP)

Higher education R&D (HERD, % of GDP)

ARC and NHMRC grant funding ($M per million population)

ARC Linkage Grants as a % of all ARC grants

Business funding of higher education R&D (% of total HERD)

Venture capital and private equity investments (% of GDP)

Science, engineering and technology degrees (% of total degrees awarded)

Universities - articles in refereed journals per million population

University licences, options and assignments ($M income per $100M R&D expenditure)

University invention disclosures per $100M R&D expenditure

University start-up companies formed per $100M R&D expenditure

Innovating businesses (% of total businesses)

Australian patents filed per million population

QLD

AUST

INPUTSOUTPUTS

For each indicator, Queensland values were expressed as a percentage of Australian values, which were assigned as 100%.

Sources and datasets – Appendix 3.

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Figure 8: R&D profile – Queensland versus the OECD

0%

50%

100%

150%

200%

250%

Gross expenditure on R&D (GERD, % of GDP)

Business expenditure on R&D (BERD, % of GDP)

Government expenditure on R&D (GovERD, % of GDP)

Higher education R&D (HERD, % of GDP)

Business funding of higher education R&D (% of total HERD)

Venture capital and private equity investments (% of GDP)

Science, engineering and technology degrees (% of total degrees awarded)

Researchers per 1,000 employed*** Scientific articles per million population

Citations per scientific publication**

University invention disclosures per $100M R&D expenditure*

University licences, options and assignments($M income per $100M R&D expenditure)*

University start-up companies formed per $100M R&D expenditure*

Innovation-active businesses (% of total businesses)***

Patents (triadic) per million population***

QLD

OECD

INPUTSOUTPUTS

For each indicator, Queensland values were expressed as a percentage of the OECD average, which was assigned as 100%.* International data for universities refers to Canada, USA and UK, not the OECD.** International data refers to the world, not the OECD.*** Queensland data has been derived.

Sources and datasets – Appendix 3.

Knowledge creation

The outputs of R&D include the publication of articles in peer-reviewed and other journals, the provision of contracted R&D services and consultancies, and the commercialisation of new knowledge and technologies in the form of new products, businesses and services.

As indicated in Figures 7 and 8, Queensland and Australia perform extremely well by international comparisons in the total output of scientific articles. This is likely to result in part from the strong investment in higher education R&D in Queensland and Australia by international comparisons. Queensland is also on par with the rest of the world with regard to the relative impact of its scientific advances, reflected by the average number of citations per science publication.78

78 Queensland’s output of scientific articles per million population is compared here with the OECD, whereas the state’s citation index is a comparison to the world. Queensland’s relative citation index is likely to be less good when compared with the OECD area alone.

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Connecting our research base with industry

The translation of R&D into economic, social and environmental returns requires knowledge and technology diffusion from the research sector to the marketplace. A key means of facilitating this process is the formation of strong collaborative links between industry and the higher education R&D sector.

Queensland stands out both nationally and internationally in the level of collaboration between the higher education sector and industry. This is reflected by the relatively high level of business funding of higher education R&D (13.5% for Queensland, versus 6.1% for Australia and the OECD), and the high proportion of Commonwealth grants awarded to Queensland that were collaborative with industry – represented here by the proportion of ARC grants that were linkage grants, which was 43% for Queensland, compared with 34% for Australia overall (Figures 7 and 8).79

Commercialisation of R&D

Several indicators are used internationally to measure the success in commercialising R&D. Those used here include –

patent intensity – patents per million population: an indicator of the creation of new knowledge and technology with commercial potential.

innovating businesses (%) – those businesses that introduced any innovation, including new or significantly improved goods, services, operational processes, organisation/managerial processes or marketing methods: an indicator of the implementation (rather than the creation) of new knowledge and technology in the industry sector.

innovation-active businesses (%) – those businesses that introduced any innovation and/or businesses where innovation was still in development or was abandoned prior to implementation: used for international comparisons, where innovating business data is not available.

university start-up companies – per $100 million R&D expenditure: one of several means by which higher education sector R&D is transferred to market, and an indicator of higher education research commercialisation.

university income from licences, options and assignments – per $100 million R&D expenditure: another indicator of the commercialisation of higher education R&D.

79 The ARC linkage grant scheme is the primary merit-based Commonwealth Government program aimed at supporting collaborative R&D projects between higher education and other R&D sector organisations, including industry.

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university invention disclosures – per $100 million R&D expenditure: an indicator of the creation of new knowledge and technology by the university sector, which has potential for a patent application.

university income from consultancies and contracts – per $100 million R&D expenditure: an indicator of the translation of university R&D knowledge and activities into service provision.

Compared to the rest of the nation, Queensland performs well in the commercialisation of R&D, particularly with respect to income from university licences, options and assignments, and start-up companies formed per $100 million of university R&D expenditure. On the other hand, by international standards, the State’s ability to translate R&D to the market is poor, particularly with respect to patent intensity. While this is obviously a result of our focus on R&D directed towards knowledge creation rather than market-driven outcomes, it again draws attention to the need to build stronger pathways from public sector research to its commercial outcomes.

Interestingly, Queensland and Australia perform well compared to their international counterparts in the proportion of innovation-active businesses. However, this measure includes the adoption of already existing knowledge and technology developed elsewhere, rather than just the implementation of new knowledge or technology created within. Indeed, when comparing new-to-market product innovations (the introduction of goods or services by a business that are new to its particular market) – a better indicator of knowledge creation in the industry sector80 – Australia comes last in the OECD.81

3.3 Opportunities

Despite low BERD and non-BERD levels compared to most states in Australia, Queensland has maintained and built upon its image as the Smart State. This has occurred primarily as a result of the State’s extensive investment in scientific infrastructure, which is attracting first-rate researchers from elsewhere in Australia and overseas. By continuing to invest in such research infrastructure, Queensland will not only further bolster its research base, but may also leverage further Commonwealth Government investments such as NCRIS, the $11 billion Education Investment Fund, and the $100 million global carbon capture and storage institute.

Similarly, there is good evidence that the Queensland Government’s support for private equity schemes is creating positive outcomes for investee 80 Innovations are classified by novelty into new to a business, new to the market or new to the

world. New-to-business innovations are the adoption of already existing innovations by a businesses and simply reflect technology diffusion, whereas new-to-market innovations (including new-to-world innovations) indicate the ability to develop from within.

81 OECD (2007) Science, Technology and Industry Scoreboard, Paris; 2002-04 data or nearest available year; information is not available at the state level, but given Australian statistics, Queensland values are also likely to be below international standards.

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companies, as well as filling an important gap in the innovation financing pipeline. As such, there is a strong argument for expanding and improving Queensland Government private equity schemes, particularly in the seed and early venture capital stages ($250,000-$10 million).

In the public research sector, the success of Queensland’s universities in attracting industry R&D investment, together with the State Government’s new investment in proof-of-concept funds, provide starting points for improving the commercialisation of university research. The likely absence of similar measures from the Commonwealth Government’s innovation package means that Queensland could derive real benefits from its first-mover status in this space. A similar situation applies to international alliances, where proactive investments in linkages such as the Queensland/Washington alliance are beginning to pay dividends.

Finally, there is the opportunity provided by the present global financial crisis, and consequent reductions in both private and public investment in R&D, to be first out of the blocks in driving the knowledge-intensive industries that will characterise recovering global economies. Queensland is well placed to take such a position of leadership, but we cannot afford to rely on our previous reputational capital. We must lead the way in creating a Smart State, where knowledge and innovation drive future economic prosperity and quality of life.

Actions

Identify the major economic, social and environmental issues that can be addressed most effectively through State Government investment in R&D, and develop a long-term R&D strategy for addressing them. In particular, use this R&D strategy to:

guide the strategic allocation of the Queensland Government’s investment in R&D between the core areas of infrastructure, skills, projects and alliances;

build on Queensland Government R&D investments to leverage further investments from the Commonwealth, industry, private equity and philanthropy; and

facilitate collaborative R&D with other public and private sector R&D providers through the provision of clear information on the present and future direction of the Queensland Government’s R&D activities.

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4. Queensland: Tomorrow

How well does Queensland’s present science/R&D base equip us for what comes next? What science/R&D do we need to do to achieve our Toward Q2 targets? How should it be resourced and organised?

4.1 Strong: creating a diverse economy powered by bright ideas

For most of its 150-year history, Queensland has been a rocks and crops economy. While agriculture now constitutes a relatively small proportion of total exports (14.7%), minerals still account for over 49% of total Queensland exports (in 2007-08).82 Other established industries, such as manufacturing and services, also continue to contribute strongly to economic growth.83

In the past 10 years, however, there has been significant investment in, and growth of, more knowledge-intensive industries, such as biotechnology, nanotechnology and ICT. The biotechnology sector, for example, has grown from 5,215 in 2005-06 to 7,630 employees in 2007-08.84 Twenty-three products developed by the Queensland biotechnology industry are in various stages of clinical trials.85

Nevertheless, only approximately 30% of our added economic value is now due to knowledge-intensive industries, compared with 40-50% in leading OECD countries.86,87

Strengths

Queensland continues to benefit from strong global demand for the products of its traditional industries, such as food, minerals and energy. In addition, investment in infrastructure has resulted in an outstanding research base in disciplines underpinning some new smart industries, such as biotechnology, nanotechnology, mining technology and services and alternative and renewable fuels. It has also helped to attract leading researchers to Queensland and to develop research clusters in these fields.

Weaknesses

As noted earlier in this report, overall investment in R&D has increased significantly over the past 15 years (from 1.02% to 1.53% of GSP) but

82 Office of Economic and Statistical Research (2008) Table: Queensland Overseas Goods Exports, By Commodity, 2006-07 and 2007-08, Brisbane.

83 ABS (2008), Australian National Accounts: State Accounts, 2007-08 (Catalogue No 5220.0).84 Office of Biotechnology and Therapeutic Medicines and Devices (2009) Queensland Industry

Profile statistics, Brisbane.85 P. Andrews, Queensland Chief Scientist, Queensland Government (2007) Queensland

Science: Building a Smarter Future.86 Ibid.87 OECD (2007) Science Technology and Industry Scoreboard: Innovation and Performance in

the Global Economy, Paris.

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nevertheless remains weak at most levels, with even our most R&D-intensive industries (mining, manufacturing) being less R&D-intensive than the Australian average for those sectors, and Commonwealth R&D investment in Queensland being approximately half that expected on a population basis.

Of equal concern is our relative lack of success in converting our research into economic outcomes. Given the early stage of development of most of Queensland’s knowledge-intensive industries, this conversion is very dependent on the existence and reliability of government programs linking existing industry to public sector research or otherwise supporting its commercialisation. Unfortunately, Commonwealth and State programs that have been key to these developments have been recently cut or are currently under threat.88

Threats

Our greatest danger is loss of the momentum that has been achieved over the past 10 years, and consequent loss of diversity in Queensland’s economy.

Opportunities

Both existing and new industries offer extensive opportunities to use R&D and innovative ideas to increase productivity and deliver consequent economic returns, either through the expansion of existing industries (making big industries smarter) or the creation of new ones (making smart industries bigger).

While some existing industries such as mining are already relatively R&D intensive89, it is essential that they continue to invest in and implement the latest science and R&D in order to retain their competitive positions in the global economy. For other existing industries such as manufacturing and services, improving the use of R&D and the rate of technology adoption will expand their capacity to produce higher value-added goods and services, thereby helping to ensure their continued contribution to the State’s economy.

Emerging or ‘smart’ industries, on the other hand, will help establish a more diversified economy in Queensland, but building more of these knowledge-intensive industries will require us to enhance our entrepreneurial skills, attract more innovation finance, and improve collaboration between research organisations and industry. Particular opportunities exist to capitalise on Commonwealth innovation developments in order to leverage greater Commonwealth R&D investment in Queensland (eg in the tropical economy).

88 The Commonwealth Government’s Commercial Ready Program ceased in May 2008. The Queensland Government’s early stage investment fund, TeQstart, has also ceased to invest.

89 See Table 1.

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Actions

Maintain Queensland Government investment in R&D and use that investment to leverage corresponding increases from Commonwealth Government and business investors.

Capitalise on Queensland’s outstanding research base by assembling an integrated suite of programs that drives the translation of public sector R&D to commercial development and stimulates industry innovation.

4.2 Green: protecting our lifestyle and environment

‘Beautiful one day, perfect the next’ remains an attractive and generally accurate depiction of the environment that awaits tourists visiting Queensland. It also conceals a range of significant environmental concerns, including: pollution of rivers and coastal waters with sediments, nutrients and pesticides; degradation of farmland; loss of ecosystems and species; and one of the highest per capita greenhouse gas emission rates anywhere on the planet.90

Fortunately, these problems are all generally amenable to a combination of better industry practices and scientific solutions (Table 8).

Strengths

Queensland has a clear national strength in environmental research, particularly tropical expertise, with key research institutes including the Australian Institute of Marine Science, the Marine and Tropical Sciences Research Facility, the National Climate Change Adaptation Research Facility, and the Australian Tropical Forest Institute.

The extent of Queensland’s environmental resources, including the Great Barrier Reef and the Wet Tropics’ Heritage-listed areas, means we have a wealth of unique information and knowledge at our doorstep, and the ability to attract internationally-renowned environmental scientists to our shores.

Environmental R&D is the strongest area of Queensland Government R&D investment, accounting for more than 40% of R&D investments in the past two years (Appendix 2). A further $350 million has been committed to renewable and low emission energy over the next 10 years through the Renewable Energy Fund and the Clean Coal Fund.

90 Australia ranks 5th in the world for per capita greenhouse gas emissions (2005; World Resources Institute Climate Analysis Indicators Tool, http://cait.wri.org/); Queensland’s per capita greenhouse gas emissions are approximately 1.5 times the national average (2006; based on: Department of Climate Change, Australian Government, State and Territory Greenhouse Gas Inventories 2006, Canberra; and ABS (2008) Australian Demographic Statistics, June 2008, Catalogue No 3101.0).

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Table 8: Key environmental issues for QueenslandKey

Environmental Issues

Potential Impacts R&D Solutions

Climate change Economic downturn,

particularly in vulnerable primary industries

Loss of Queensland’s unique natural resources

Severe water shortages

Economically viable renewable and low-emission energy technologies

Improved energy and water efficiency and distribution

Climate adaptation R&D to ensure the economic and environmental sustainability of the State

Pollution of rivers and coastal waters

Loss of Queensland’s fresh water and marine species

Degradation of the Great Barrier Reef

Improved monitoring and mapping of Queensland’s rivers and coastal waters

Improved understanding of the causes and effects of water pollution in order to improve practices and reduce impacts

Degradation of farmland

Irreversible damage to the profitability of the farming sector

Improved monitoring and understanding of the cause and effects of soil and vegetation degradation

Biodiversity loss Queensland loses its

unique natural flora and fauna

Reduced profitability of Queensland’s tourism industry

Improved monitoring of species to prevent biodiversity loss

Improved knowledge of ecosystem biology to stem species loss

Predicting, monitoring and preventing the impacts of climate change on biodiversity

The Commonwealth Government has committed unprecedented levels of investment to environmental R&D, including renewable and low emission energy (in excess of $1.5 billion over 8 years)91, climate change ($50 million over 5 years through the National Climate Change Adaptation Research Facility), the Great Barrier Reef ($10 million over 5 years through Reef Rescue), and water recycling and desalination ($40 million over 5 years for Centres of Excellence).

Weaknesses

Queensland Government investments in environmental R&D would benefit from long-term strategic prioritisation based on issues of environmental concern and the existence of internationally-competitive R&D expertise. In the pursuit of alternative energies and fuels, for example, almost all of our investment is in clean coal and carbon sequestration, although our major research strengths and natural resources in biomass, geothermal and solar

91 Includes the Renewable Energy Fund ($500 million over 1.5 years), National Low Emissions Coal Fund ($500 million over 8 years), Green Car Innovation Fund ($500 million over 5 years), Global Carbon Capture and Sequestration Institute ($100 million initial funding), and Energy Innovation Fund ($150 million over 4 years).

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energy make us prospectively at least as competitive in the development of economically valuable new technologies in these areas.

Threats

Queensland’s environment and associated industries, like those around the globe, are susceptible to the impacts of climate change, and our investments in the reduction of greenhouse gas emissions make good sense in that regard. Equally threatening for Queensland, however, are issues associated with the sustainable use of our natural resources, and particularly water and soil. As shown in the following table, Queensland Government R&D provides a good balance between these areas, but ARC data, indicative of underlying research strength92, suggest the need to begin building future R&D capacity in areas such as sustainable natural resource use.

Table 9: ARC national competitive grant funding committed to Queensland and Australia by environmental area, 2006-08, compared with Queensland Government expenditure in these areas (2007-08)*

Environmental R&D Area

ARC Commitments to Different Environmental

R&D Areas

Queensland Government

Expenditure in Different

Environmental R&D AreasQld Aust

Climate Change 51% 46% 30%

Ecosystem Health & Biodiversity 28% 32% 11%

Water Security 16% 14% 17%

Sustainable Natural Resource Use 6% 8% 29%

Other 0% 3% 12%

Total Environmental 100% 100% 100%

* ARC grants refer to total award amounts for grants starting in 2006, 2007 and 2008; includes ARC Centres of Excellence; ARC Research Network Grants; Discovery Project Grants; Discovery Indigenous Researchers Development Grants; Linkage Project Grants; Linkage Infrastructure, Equipment and Facilities Grants; Linkage International Grants; and fellowships. Queensland Government R&D refers to in-house and outsourced R&D, including leveraged funds.Source: ARC (2008), National Competitive Grants Program Dataset, http://www.arc.gov.au/general/searchable_data.htm, (corrected for omitted Linkage Infrastructure, Equipment and Facilities Grants); Office of the Queensland Chief Scientist (2008) A Snapshot of Queensland Environmental, Health and Social R&D – a background paper for R&D Queensland.

Opportunities

Seeking a leadership position in the development of clean coal technologies makes good sense for Queensland, but this should not be at the expense of alternative energy sources where Queensland has both extensive resources and research strengths. The establishment of the Office of Clean Energy by

92 ARC grants are a major source of Commonwealth funding for the higher education sector. Because grants are awarded based on merit irrespective of research field (other than medical research), success in obtaining funding indicates competitive research strength.

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Queensland Government in November 2008 represents a clear opportunity to diversify the Government’s investments in renewable energy R&D.

The opportunity for counter-cyclical investment in areas of primary importance to Queensland is even stronger for land and water quality issues, particularly in fragile tropical ecosystems such as the Great Barrier Reef.

Actions

Align the strategic goals and underlying R&D plans of Queensland Government departments involved in environmental R&D around priority issues for Queensland (eg reef water quality) and global issues where Queensland has internationally-competitive research strengths (eg tropical ecosystems).

4.3 Smart: delivering world-class education and training

Queensland’s ability to grow a knowledge economy, where virtually all quality jobs will require science, technology and mathematical skills (STEM)93, requires human capital with improved STEM skills. In particular, the fundamental role of quality research leaders in driving globally-competitive R&D, and well-equipped, visionary entrepreneurs in translating new knowledge and technologies into economic outcomes, cannot be overestimated.

Queensland’s R&D human resource pool, represented by the proportion of new graduates in STEM fields, is similar to our national and international counterparts. In 2006, 22% of new graduates from Queensland universities were in STEM fields, compared with 21% for Australia and the OECD.94,95

However, this conceals a worrying trend in the pool of human resources in STEM. In Queensland, as elsewhere in Australia and much of the developed world, there is a shortage of STEM-qualified graduates emerging from the education system.96 Moreover, in the past six years, the proportion of Queensland university award completions that were in STEM fields has fallen from 27% to 19% (Figure 9).

93 Committee on Prospering in the Global Economy of the 21st Century: An Agenda for American Science and Technology, National Academy of Sciences, National Academy of Engineering, Institute of Medicine (2007) Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.

94 DEEWR, Australian Government (2006) Selected Higher Education Statistics, http://www.dest.gov.au/sectors/higher_education/publications_resources/statistics/publications_higher_education_statistics_collections.htm; includes all university award completions in the fields of Natural and Physical Sciences, Information Technology, Engineering and Related Technologies, and Architecture and Building.

95 OECD (2008) OECD.Stat, accessed 5 December 2008, http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd; includes undergraduate and post-graduate tertiary degrees at levels 5A and 6 of the 1997 International Standard Classification of Education (ISCED-1997) in the fields of Science and Engineering, Manufactuing and Construction.

96 DEEWR, Australian Government (2008) Opening up pathways: Engagement in STEM across the Primary-Secondary school transition, Canberra.

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Figure 9: Queensland and Australian STEM graduates as a proportion of all new university graduates, 1996-2007*

0%

5%

10%

15%

20%

25%

30%

STE

M g

radu

ates

(% o

f all

new

uni

vers

ity g

radu

ates

)

QLD

AUST

* For all university award completions, including diplomas, degrees and post-graduate certificates and degrees. Education field classifications changed in 2001. Data include the fields of Science, Veterinary Science, Engineering /Surveying and Architecture/Building, but not Agriculture/Animal Husbandry or Health (1996-2000); and the fields of Natural and Physical Sciences, Information Technology, Engineering and Related Technologies, and Architecture and Building, but not Health or Agriculture, Environmental and Related Studies (2001-2007), in line with the OECD definition of Science and Engineering degrees.97

Source: DEEWR, Australian Government (1997-2007) Selected Higher Education Statistics, http://www.dest.gov.au/sectors/higher_education/publications_resources/statistics/publications_higher_education_statistics_collections.htm.

Strengths

Although the concept of being ‘smart’ was initially not attractive to many Queenslanders, there are promising signs of cultural change: industries, recognising the need to attract high quality future staff, are becoming increasingly involved in school-based programs such as gateway schools offering students real understanding of potential future careers; scientists are becoming more involved in programs like Scientists in Schools (highest number of participants in Australia)98; and both Commonwealth and State Governments are becoming more committed to quality education for all of our children in all of our schools.

97 OECD (2007) Science Technology and Industry Scoreboard: Innovation and Performance in the Global Economy, Paris.

98 As at 31 October 2008; provided by the Department of Education, Training and the Arts, Queensland Government.

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Weaknesses

Recent national and international measures of student achievement suggest that Queensland is under-performing relative to other states.99 This is most noticeable in those areas, such as scientific and mathematical literacy, that are most relevant to building a knowledge-intensive economy, addressing major environmental challenges and improving community health.

This, in turn, has been linked to a lack of highly-qualified STEM teachers100, including issues associated with teacher training and weak (uptake of) professional development programs for less qualified teachers currently engaged in STEM teaching.

Threats

Rapidly ageing scientific and teaching workforces, combined with declining numbers of students studying STEM and declining OP scores for entry into graduate teaching courses, suggests the real threat of becoming a not so smart state.

Opportunities

The 10-year plan for STEM education and skills being developed by the Department of Education, Training and the Arts will be instrumental in increasing the number and quality of STEM graduates emerging from the education system and providing incentives to attract top-quality graduates into science and mathematics teaching. These initiatives should be aligned with the suite of programs announced by the Commonwealth Government to increase tertiary enrolments in STEM courses, encourage students to pursue

research careers and attract researchers to Australia.101

Actions

99 In the OECD Program for International Student Assessment (PISA) 2006, Queensland ranked 5th out of all Australian states and territories in each of the major domains assessed; in the 2003 National Year 6 Science Assessment Report, 55% of Queensland students were at or above the proficient standard compared with 58% nationally; (data provided by the Department of Education, Training and the Arts, Queensland Government). In the 2008 National Assessment Program – Literacy and Numeracy (NAPLAN), Queensland performed below the Australian average in all areas tested and for all year levels (years 3, 5, 7 and 9) (Ministerial Council on Education, Employment, Training and Youth Affairs (2008) NAPLAN Summary Report).

100 DEEWR, Australian Government (2008) Opening up pathways: Engagement in STEM across the Primary-Secondary school transition, Canberra.

101 Commonwealth Government initiatives include doubling the number of Commonwealth Learning Scholarships and the number of Australian Postgraduates for PhDs and students undertaking Masters by Research, introducing Future Fellowships to keep the best and brightest mid-career researchers in Australia and halving HECS fees for mathematics and science students.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Identify STEM skills requirements underpinning Queensland Government R&D investment and associated industry development, and use this to inform the implementation of the 10-year STEM education and skills plan.

4.4 Healthy: making Queenslanders Australia’s healthiest people

Queensland has the highest incidence of chronic disease, and the highest associated mortality rate, of any state in Australia. More than one third of all deaths in Queensland are the result of chronic disease that could have been prevented and 2.9 million Queenslanders have a long-term chronic condition.102

This situation is putting major pressure on our healthcare services and budgets: Queensland’s total health expenditure has already increased from $12.3 billion in 2003-04 to $16.6 billion in 2006-07.103 In the absence of major improvements in the prevention and early detection and treatment of chronic disease, health budgets will continue to rise, both in real terms and as a proportion of GSP.

R&D is integral to reducing the incidence of chronic disease in two ways –

The application of R&D to the prevention of disease will enable us to better understand the behavioural change and associated strategies required to encourage Queenslanders to reduce chronic disease risk factors, such as poor nutrition, physical inactivity and tobacco smoking.

The application of R&D to early detection and treatment of disease will assist in identifying people at risk of developing chronic disease and helping them to prevent progression of the disease.

102 Queensland Health, Queensland Government (2008) The Health of Queenslanders 2008: Prevention of Chronic Disease, Second Report of the Chief Health Officer Queensland, Brisbane.

103 Ibid.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Strengths

As a result of investments made over the past decade, we now have an outstanding research base in genomics, biomarkers, pharmacogenomics, diagnostics and immunology (the disciplines which underpin the technologies of early detection and treatment).

We also have emerging research strengths in those areas of social science related to behavioural change and community development (eg University of Queensland’s Institute of Social Science Research, Griffith University’s Urban Research Program, and the independent human capital institute, Eidos) and there is evidence that a substantial number of Queenslanders are willing to get on board with campaigns directed towards making such change (eg success of reduced smoking and reduced water use campaigns).

Weaknesses

Although there are some outstanding exceptions (eg cervical cancer vaccine, the Positive Parenting Program) we have not done well at translating our health and medical research strengths into outcomes at the clinical or commercial level. Two discrete and important obstacles were identified by the Smart State Council in its report Medical Research: Queensland’s Future Health and Wealth, Solving Tomorrow’s Health Problems Today (November 2007) –

1. translation of research into products, ie moving basic science discoveries into commercial development, and

2. translation of clinical studies into medical practice and decision-making in health service delivery.

Threats

Ongoing increases in the level of chronic disease, with associated and unsustainable growth in the Queensland health budget.

Opportunities

Using our social science research strengths, Queensland has the opportunity to develop national and international leadership in the application of strategies aimed at reducing disease risk factors, particularly in lower socio-economic groups, where their incidence is presently higher. Using our biological research strengths, we can develop, apply and commercialise products for the early detection and treatment of chronic disease.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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The new $25.7 million Queensland Government Health and Medical Research Program will also help drive the improved translation of medical research into health and wealth outcomes.

Actions

Align the strategic goals and underlying R&D plans of Queensland Government departments involved in health and social R&D around priority issues for Queensland (eg chronic disease) and global issues where Queensland has internationally-competitive research strengths (eg emerging tropical diseases).

4.5 Fair: supporting safe and caring communities

Queenslanders are getting richer, but there is an increasing divide between the haves and the have-nots. Emblematic of this, is the fact that more than 130,000 Queensland children (under 15 years) live in homes without a working parent.104

Research shows that children living in jobless households are at greater risk of disadvantage. They are less likely to do well at school or in the workforce and more likely to end up in the criminal justice system. They are also more likely to need higher levels of government services.105

Social sciences R&D has a major role to play in ensuring that those activities of Government and others aimed at creating safer and caring communities across Queensland, are informed by evidenced-based and innovative policies, and well coordinated and integrated programs. But, like the problems that they seek to address, the social sciences are very much the poor cousins in our scientific community. The parallels are intriguing; the solutions clearly linked.

Strengths

The involvement of so many different Government departments in addressing issues of socio-economic disadvantage has the potential to further exacerbate the situation, but there is already evidence of emerging integration of R&D resources in this space. The current project under the Integrated Human Services CEO Committee, the Logan-Beenleigh Social Inclusion Continuous Improvement Evaluation Framework, is a good example. This is an important piece of social R&D in itself, with the potential to provide a service delivery model that impacts disadvantaged groups. It is noteworthy that this project also includes the Commonwealth Government.

104 Queensland Government (2008) Toward Q2: Tomorrow’s Queensland, Brisbane.105 Queensland Government (2008) Toward Q2: Tomorrow’s Queensland, Brisbane

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Weaknesses

With some notable exceptions (eg the Logan-Beenleigh project mentioned above), there is a lack of shared data and information on clients and programs, as well as a lack of shared knowledge on international best practice in addressing socio-economic disadvantage in otherwise flourishing societies.

Threat

Failure to significantly reduce the incidence of social disadvantage, with consequent loss of economic and social productivity.

Opportunities

Rectifying the many facets of social disadvantage is a whole-of-community challenge, and an area where every organisation and individual can play a role through volunteering and other avenues. Social entrepreneurship (applying sound business principles and practices for social outcomes and benefits) is a promising trend in this respect.

Building better linkages between the players at all levels has the potential to make a huge difference. Thus, the prospect of uniting the collaborative intra- and inter-governmental efforts with the range of higher education and independent social services institutes and research activities in Queensland to form a truly powerful social science community is extremely attractive.

Actions

Minimise overlaps and omissions in the State Government’s social science R&D programs by identifying opportunities to share infrastructure, information and human resources between Government departments and other research providers.

The State of Science in Queensland 2007 – 08by the Queensland Chief Scientist

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Smart State Innovation Funds, breakdown by program and sector*

Sector SSRFF/IBF NIRAP RIPP PAFP Premier’s Fellowship

Fellowships PhDs Internships Total

No. Funding No. Funding No.

Funding No.

Funding No. Funding No. Funding No. Funding No. Funding No. Funding

Advanced Manufacturing 3 25,425,000 1 598,500 9 5,040,782 1 62,500 1 1,250,000 1 300,000 1 15,500 2 233,328 16 32,925,610

Aviation and Defence 2 5,732,00

0 4 6,847,930 2 145,000     4 67,500   10 12,792,430

Biotechnology 21 195,709,000

15 17,742,981 7 4,526,404 8 578,689 1 1,250,000 19 3,450,000 22 437,000   65 223,694,074 Environmental Technologies

9 50,368,000 3 5,000,000 1 619,000     1 150,000 1 21,000   14 56,158,000

Project Development and Facilitation

1 3,100,000 1 2,000,000 1 600,000     1 150,000     3 5,850,000

ICT   4 3,102,900 2 1,200,000 1 100,000   2 300,000 1 21,000 5 583,320 12 5,307,220

Science Strategy and Engagement

  4 6,355,809 1 973,920 3 300,000 1 1,250,000 6 1,200,000 7 141,000   12 10,220,729

Processed Foods     1 500,0

00       1 21,000 1 116,664 3 637,664

Creative Industries             1 21,000 1 116,664 2 137,664

Other 3 16,235,000 1 1,396,000   4 355,000   1 300,000 1 21,000   5 18,307,000

Total 39 296,569,000

33 43,044,120 22 13,460,106 19 1,541,189 3 3,750,000 31 5,850,000 39 766,000 9 1,049,976 142

366,030,391 * Includes SSRFF and Rounds 1-3 of Smart State Innovation Funds

Funding leveraged from these investments: Programs:SSRFF/IBF $ 580,232,245 Smart State Research Facilities Fund (SSRFF)IPF $ 207,303,300 Innovation Building Fund (IBF)ISF $ 16,674,428 Innovation Projects Fund (IPF) - National and International Research Alliances Program (NIRAP)

- Research-Industry Partnerships Program (RIPPTotal leveraged $ 804,209,973 - Innovation Scholarships Fund (ISF)

- Premier’s Fellowhsip - Fellowships

- PhDs - Internships

Appendix 1

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Datasets for R&D profiles

R&D profile – Queensland, Australia and OECDNote: In most cases, the most recent Australian and Queensland figures were used, unless this resulted in a misrepresentation when comparing with OECD values, in which case the same year as OECD figures was used.

IndicatorAbsolute values Relative values Year Source

QLD AUST OECD QLD AUST OECD QLD & AUST OECD QLD & AUST OECD

Gross expenditure on R&D (GERD, % of GDP) 1.53% 2.01% 2.26% 67.8% 88.8% 100.0

% 2006-07 2006ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Business expenditure on R&D (BERD, % of GDP) 0.84% 1.15% 1.56% 53.8% 73.8% 100.0

% 2006-07 2006ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Government expenditure on R&D (GovERD, % of GDP) 0.21% 0.28% 0.26% 80.9% 109.0

%100.0

% 2006-07 2006ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Higher education R&D (HERD, % of GDP) 0.47% 0.52% 0.39% 121.1% 133.2

%100.0

% 2006-07 2006ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Business funding of higher education R&D (% of total HERD)

13.45% 6.06% 6.07% 221.6% 99.8% 100.0

% 2006 2005 ABS 8111.0, 2006OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Venture capital and private equity investments (% of GDP)* 0.16%* 0.20%* 0.11% 137.4% 175.4

%100.0

% 2005-06 2006

Thomson Reuters & AVCAL Yearbook 2006;ABS 5220.0, 2007-08;ABS 5206.0, June 2008

OECD (2008) Science, Technology and Industry Outlook 2008, Paris

Science, engineering and technology degrees (% of total degrees awarded)°

21.5%° 21.4%° 21.0%° 102.8% 102.1%

100.0% 2006 2006 DEEWR, Selected Higher

Education Statistics

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Researchers per 1,000 employed 5.9 8.4 7.3 81.0% 115.1

%100.0

% 2006-07 2005 ABS 8112.0, 2006-07;ABS 6291.0.55.001

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

Appendix 3

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Scientific articles per million population^ 729.6^ 779.4^ 493.3 147.9% 158.0

%100.0

% 2002 2005

Linda Butler, et al (2006) State and Territory based assessment of Australian Research, Australian National University;ABS 3101.0, June 2008

OECD (2008) Science, Technology and Industry Outlook 2008, Paris

Citations per scientific publication# 8.1 8.5 7.5# 108.0% 113.3

%100.0

%

published 2002;

citations 2002-2006

published 2002;

citations 2002-2006

Linda Butler, et al (2006) State and Territory based assessment of Australian Research, Australian National University;ABS 3101.0, June 2008

Linda Butler, et al (2006) State and Territory based assessment of Australian Research, Australian National University

University invention disclosures per $100M R&D expenditure** 36.3 24.8 42.0** 86.4% 59.2% 100.0

% 2004 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

University licences, options and assignments ($M income per $100M R&D expenditure)##/**

2.3 1.2 1.9** 123.6% 63.5% 100.0% 2004 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

University start-up companies formed per $100M R&D expenditure**

1.2 0.8 2.0** 60.0% 40.0% 100.0% 2004 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

Innovation-active businesses (% of total businesses)^^ 48.4^^ 43.6^^ 46.4 104.5% 94.1% 100.0

% 2006-072002-2004 (or nearest

year)ABS 8158.0, 2006-07

OECD (2008) Science, Technology and Industry Outlook 2008,Paris – Innovation Microdata Project

Patents (triadic) per million population*** 17.1*** 18.7*** 43.0 39.8% 43.6% 100.0

% 2006-07 2005

IP Australia http://www.ipaustralia.gov . au/about/statistics.shtml ABS 3101.0, June 2008

OECD.Stat - Main Science and Technology Indicatorsaccessed 5 December 2008

* Due to discrepancies between AVCAL Yearbook figures and OECD figures, Australian figures were sourced from OECD data, and Queensland figures were derived based on the Queensland:Australia ratio in the AVCAL Yearbook.

° Queensland and Australian data include all university awards in the fields of Natural and Physical Sciences, Information Technology, Engineering and Related Technologies, and Architecture and Building, but not Health or Agriculture, Environmental and Related Studies. OECD data include undergraduate and post-graduate tertiary degrees at levels 5A and 6 of the 1997 International Standard Classification of Education (ISCED-1997) in the fields of Science and Engineering, Manufactuing and Construction. Australian values reported by DEEWR are consistent with OECD values for Australia for 2006.

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Australian figures represent the number of researchers in person years of effort (PYE) in 2006-07 per 1,000 people employed (averaged from monthly employment figures for Australia from July 2006 to June 2007). (Similar calculations for 2004-05 correlated well with OECD figures for Australia for 2004.) Queensland data was not available, but was derived by multiplying researchers per 1,000 employed for Australia by the ratio of GERD for Queensland and Australia. This relationship was found to be accurate in the higher education sector, where data was available at the state level.

# International data refers to the world, not the OECD.

^ Australian and OECD figures are based on 2005 OECD data; Queensland figures were derived based on Queensland:Australia ratios from 2002 data.

** International data refers to the average of the USA, Canada and the UK, not the OECD.

## 2004 values were used, rather than more recent data, due to discrepancies between values reported by UniQuest and DEEWR for the latter. Consistent data for 2005, 2006 and 2007 should be available in early 2009 through the release of an updated national survey of research commercialisation by DEEWR.

^^ Due to different methods used by the ABS and OECD (primarily due to the inclusion of firms with less than 10 employees in Australian figures), Australian figures were sourced from OECD data, and Queensland figures were derived based on the Queensland:Australia ratio in the ABS Catalogue No 8158.0.

*** Australian figures were sourced from OECD data. Queensland figures for triadic patents were not available. Therefore, to get an indication of Queensland patent intensity compared with Australia and the OECD, the ratio of Queensland:Australia patents filed in Australia in 2006-07 was multiplied by the number of triadic patents for Australia in 2005. There is no information on the relationship between Australian patents filed and triadic patent families. Thus these figures do not represent the number of triadic patents filed by Queensland, and are indicative only.

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R&D profile – Queensland versus Australia

IndicatorAbsolute values Relative values

Year SourceQLD AUST QLD AUST

Gross expenditure on R&D (GERD, % of GDP) 1.53% 2.01% 76.4% 100.0% 2006-07

ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

Business expenditure on R&D (BERD, % of GDP) 0.84% 1.15% 72.8% 100.0% 2006-07

ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

Government expenditure on R&D (GovERD, % of GDP) 0.21% 0.28% 74.2% 100.0% 2006-07

ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

Higher education R&D (HERD, % of GDP) 0.47% 0.52% 90.9% 100.0% 2006-07

ABS 8112.0, 2006-07;ABS 5220.0, 2006-07;ABS 5206.0, June 2008

ARC and NHMRC grant funding($M per million population) 44.5 52.9 84.1% 100.0% 2008

ARC (2008) National Competitive Grants Program Dataset; NHMRC (2008) Research Funding Dataset 2000-2008;ABS 3101.0, June 2008

ARC Linkage Grants as a % of all ARC grants 42.9% 33.6% 127.6% 100.0% 2008 ARC (2008) National Competitive

Grants Program Dataset

Business funding of higher education R&D (% of total HERD) 13.5% 6.1% 221.9% 100.0% 2006 ABS 8111.0, 2006

Venture capital and private equity investments (% of GDP) 0.06% 0.11% 57.3% 100.0% 2007-08

Thomson Reuters & AVCAL Yearbook 2008;ABS 5220.0, 2007-08;ABS 5206.0, June 2008

Science, engineering and technology degrees (% of total degrees awarded)^ 19.3% 19.9% 97.1% 100.0% 2007 DEEWR, Selected Higher Education

Statistics

Universities - articles in refereed journals per million population 1144.3 1305.2 87.7% 100.0% 2006 www.universitiesaustralia.edu.au;

ABS 3101.0, June 2008

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University licences, options and assignments ($M income per $100M R&D expenditure)* 2.3 1.2 194.7% 100.0% 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

University invention disclosures per $100M R&D expenditure 36.3 24.8 146.1% 100.0% 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

University start-up companies formed per $100M R&D expenditure 1.2 0.8 150.0% 100.0% 2004

DEST (2007) National survey of research commercialisation 2003 and 2004

Innovating businesses (% of total businesses) 36.0 32.4 111.1% 100.0% 2006-07 ABS 8158.0, 2006-07

Australian patents filed per million population 474.2 519.2 91.3% 100.0% 2006-07

IP Australiahttp://www.ipaustralia.gov . au/about/statistics.shtml ABS 3101.0, June 2008

^ Data include all university awards in the fields of Natural and Physical Sciences, Information Technology, Engineering and Related Technologies, and Architecture and Building, but not Health or Agriculture, Environmental and Related Studies.

* 2004 values were used, rather than more recent data, due to discrepancies between values reported by UniQuest and DEEWR for the latter. Consistent data for 2005, 2006 and 2007 should be available in early 2009 through the release of an updated national survey of research commercialisation by DEEWR.