I had never looked at the reason why Australia had such low R&D spending this way before. It all makes sense now! Very good and informative article.

Good article - well reasoned, balanced and a nice antidote to the bipolar discussions we often have on these subjects, which tend to asusme either that Australians are world-beating innovators, or that we are falling dangerously behind our competitors on research spending.

We might not have Saab making aircraft, but down in the Latrobe Valley we have Gippsland Aeronautics www.gippsaero.com/ making the 8 seater GA8 Airvan and the GA200c agricultural aircraft which compete more than favourably with companies like Cessna. They currently produce 20 to 25 aircraft per year with 110 staff so they are making a significant contribution to the local economy.

Also low R and D might just reflect an economy dominated by small business.
In New Zealand many of our most inventive companies have no R and D budget because they do their design work on the kitchen table at night and knock up the prototypes in the garage over the weekend. They just deduct the spending as operating expenses.
But I have licensed many of their products to large companies overseas.
I have sat on the boards of a few Australian companies and much of out time was spent figuring out to redefine quality control and other activities as R and D to capture the subsidies. Such behavior increases R and D line items but has no effect on innovation.
Finially an innovation is simply a new idea that makes money and not all innovation needs R and D. Think of indoor cricket, or the hula hoop, or the multiplex, or the supermarket, or the barbie doll.

Utter crap !!

It's all been said before and the money was wasted by the federal pollies.

It's VERY SIMPLE. If you want to have a local R & D industry you have to SUPPORT IT! Successive governments have failed to put our money (taxes) where their collective mouths were; especially in computers & IT. They just kept on buying DEC (Compaq) and IBM and other foreign hardware and software.

BTW, that small Finish company, Nokia, started out as a fishing and timbergetting business. It was bankrolled by the federal government of Finland.

QED.