The Australian Government's Innovation Report

CHAPTER 1 – Science and innovation – advancing our abilities
Innovation, the exploitation of knowledge and ideas to produce new or improved products, processes, services
or organisational forms, is a major driver of the productivity gains that underpin sustained economic growth
and contribute to enhanced social well-being. It is a key source of competitiveness in global markets and
enhances preparedness for future challenges and opportunities.
Australia’s innovation system is comprised of the human capital, knowledge, networks, infrastructure and
institutions that act together to support the innovation process. The Australian Government plays an active
and important role in this system by supporting each of these elements, implementing measures and removing
barriers to enhance their interaction and effectiveness, and promoting the positive economic conditions in
which innovation can flourish.
The Australian Government’s significant investment in strengthening the national innovation system recognises
its capacity to contribute to an improved quality of life for all Australians. It backs the skills, knowledge and
ideas that are the foundation of innovative enterprise and strengthens the pathways through which their
potential economic, social and environmental benefits can be realised.
The Australian Government’s investment in science and innovation:
an overview
The Australian Government has invested at record levels in science and innovation, with expenditure in
2006-07 through the Budget and special appropriations estimated at $5.97 billion 1 . Over the past decade,
Australian Government support for science and innovation has grown at an average rate of 1.9% per year in
real terms.
Australian Government support for science and innovation can be grouped into four main categories: support
for major government research agencies, support for research and development (R&D) and innovation in the
business sector, support for research and research training in the higher education sector, and support for
major science and technology programmes involving more than one sector of the economy (multi-sector).
Table 1 identifies Australian Government support for science and innovation under these categories over the
period 1996-97 to 2006-07.
In 2006-07, nine government agencies delivered science and innovation programmes on behalf of the
Australian Government. The Department of Education, Science and Training is a lead agency, accounting for
around 55% of the government’s total expenditure on science and innovation. Other key players include the
Department of Industry, Tourism and Resources (21.9%), the Department of Health and Ageing (7.8%), the
Department of Defence (5.7%), the Department of the Environment and Heritage (4.5%), the Department
of Agriculture, Fisheries and Forestry (4.1%) and the Department of Communications, Information
Technology and the Arts (0.7%).
1
This is an estimate of Australian Government spending on its research agencies and programmes with an immediate and direct objective of
enhancing Australia’s science and innovation performance and capability.
Chapter 1 - Science and innovation – advancing our abilities 17