In Australia we not only see a decline of expenditure on R&D in the business sector (see our story Business as usual), but also across federal and state government organisations, and relative to growth in GDP also in the higher education sector.
According to the latest figures from the Australian Bureau of Statistics, between 2015-15 and 2016-17 government expenditure on R&D (GOVERD) decreased by 1.5% from $3.33 billion down to $3.28 billion (current prices), after it had already significantly reduced in the two years before. Over the four years from 2012-13 to 2016-17, GOVERD fell by around 12%, and as a proportion of gross domestic product (GDP) has continued a decade long decline (see figure).
The lower GOVERD in 2016-17 can in parts be attributed to a reduction in human resources allocated to research. However, most of the decline in expenditure was due to lower capital expenditure, such as for running laboratories and pilot plants.
The ABS figures show that between 2014-15 to 2016-17 pure basic research was most effected, both in absolute ( down $50 million) and in relative terms (down 29%).
In 2016-17, only 4% of GOVERD was for pure basic research, while most of the funding (56%) supports applied research, followed by strategic basic research (26%) and experimental development (14%).
The top four socio-economic objectives of government spending were Health (18%), Defence (17%), Environment (16%) and Plant Production and Plant Primary Products (13%). Together these areas accounted for almost two-thirds of GOVERD in 2016-17.
In addition to business and government organisations, growth of R&D expenditure in universities, the third leg of Australia's total R&D investment, is also losing pace.
As ABS data released in may show, while higher education expenditure on R&D (HERD) increased by 7% to $10.9 billion (current prices) between 2014 and 2016, as a proportion of GDP it fell from 0.63% down to 0.62%.
While this is only a slight drop, it is adding to the concerning relative decline of Australia's investment on R&D: Australia's gross expenditure on R&D (GERD) dropped by 7% between the financial years 2013 and 2015 to just 1.88% of GDP, and is again substantially lower than the OECD average of 2.34% (in 2016).