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In the media: We are so much better than our dig-it-up, ship-it-out mantra

October 10, 2022

Vicki Thomson – Australian Financial Review – 9 October 2022

Later this month we’ll get a first view of the government’s economic vision when Treasurer Jim Chalmers delivers his first federal budget. Expectation management is the name of the game for October 25, and we’ve been left in no doubt that the focus will be on the increased cost of living. As it should be.

Government will get no argument from me. COVID-19 has changed the world. The future is rocky and will remain so for some time as we and our competitor nations concentrate on relieving cost-of-living pressures and reducing debt.

After the challenges of recent years, this isn’t the time to be issuing demands or asking for handouts. Rather, it is time to be part of the solution. Australia’s eight most research-intensive universities are committed to being part of the economic solution by operating inside the tent, not arguing outside it.

And without any exaggeration we do know that an economic solution cannot be achieved without us.

The federal government also has an obligation in the upcoming budget to prioritise its election commitments.
One of these – the Australian Universities Accord – presents an opportunity to prepare the nation for the challenges that lie ahead. And it is higher education and research that will shape the future of the nation more than any other sector.

The accord is intended to drive lasting and sustainable reform in an economic environment that demands tough decisions. The starting point should be the obvious reframing of how Australia funds research and innovation – different from how much – to ensure government and taxpayers receive the best possible value.

At the same time is it critical to put in place policies to ensure Australia prospers into the future and that we lift our economic complexity ranking, an important goal of the new government.

For some, it is likely that economic complexity is a whole new language. It sounds dry. It’s anything but. For Australia, however, the reality is downright ugly.

Economic complexity is explained in relation to the diversity and rarity of exports. A higher level of complexity requires more sophisticated, unique know-how. And more sophisticated know-how relies on education and knowledge production – the kind you get via graduates of high-quality, research-intensive universities.

Without this, Australia will be forced to continue to rely on commodity exports for our prosperity, pushing us further and further behind a global economy in which we are already slipping. Australia’s ranking of economic complexity has fallen from55 in the world in 1995 to currently 91, placing us between Namibia and Kenya.

It’s an ugly statistic from a so-called clever country. Without a doubt it is absolutely fine that we are a “dig it up, ship it out” nation, but that simply cannot be all that we are. Our exports have to be much smarter or the complexity stays raw and low.

The Minister for Industry and Science Ed Husic was right when he recently said: “We need to have higher ambitions and climb up that ladder, rather than sliding down it continually … we have a lot of potential, and we have a lot of people with smart, great ideas.”

We do indeed.

Another of the government’s goals, to lift investment in research to 3 per cent of GDP, will be challenging. With finite resources, it makes sense to target spending where it delivers the greatest return and best targets national priorities.

In 2020, the Group of Eight leading universities invested $7.2 billion into research, and we receive $1 billion annually in research income from business and philanthropy – more than twice the rest of the sector combined. We are without-peer when it comes to research effort in this country.

The accord is an opportunity to look at genuine funding reform. It’s also an opportunity to consolidate research funding. The federal government currently invests nearly $12 billion through 157 programs across 12 portfolios in R&D. How do we know if we are getting bang for our buck?

As former Chief Scientist Ian Chubb has said, “Funding must be directed to universities according to their strengths, rather than being spread around to make small institutions ‘feel good’.”

Labor has a strong track record in research and innovation and when previously in government had committed to a major root and branch review of research funding for a generation.

It’s time to revisit this, to ask the hard questions and take the tough decisions. The accord provides a window to reframe Australia’s higher education sector and lift the bar. And if we miss this opportunity the repercussions will not be just to the sector, but to all of Australia.