This examination of present and projected technology investment levels finds that Australia is lagging behind other comparable nations and that without intervention, the gap is set to grow. This is concerning, the authors argue, as Australia’s future economic prosperity is closely linked to productivity growth, which in turn relies on greater investment in technology. The report recommends a range of measures to boost investment in R&D and technology adoption.

The report looks at both research and development and the adoption of new technologies, drawing on macroeconomic modelling and insights from industry experts to understand the challenges and opportunities facing the sector. It makes the case that higher levels of tech investment would deliver substantial and necessary benefits to the Australian economy, and identifies pathways to increase investment.

Key findings 

• Australia’s tech investment is currently equivalent to 3.9% of GDP.
• This figure is forecast to fall to 3.5 per cent of GDP by 2030 due to the ongoing decline of R&D spending as a share of GDP and a lack of growth in tech adoption investment.
• This decline would cost Australia around $8.2 billion dollars in 2035 alone and a total of $25.3 billion dollars between now and 2035 in foregone productivity benefits, relative to maintaining our current level of tech investment. 
• Productivity growth has been declining and, if this trend continues, GDP per capita will stall by the mid-2030s.

Recommendations

1. Ensure tech investment policies are fit-for-purpose.
2. Address barriers to scaling tech companies from Australia.
3. Support greater attraction of investment activity from R&D-intensive global companies.
4. Examine opportunities for government to invest strategically to provide greater competition.
5. Examine opportunities to create tech industry-led executive education programs focusing on opportunities to adopt technology and manage technology risk.