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The public sector: have we got the priorities right? Presented at Agri-Food 2000, Melbourne, Ausgust 16-17



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Agri-Food 2000 - Melbourne August 16 - 17 "The Public Sector: have we got the priorities right?"

Prof Margaret Britz

Head, Department of Food Science and Agribusiness, The University of Melbourne, Sneydes Rd, Werribee, VIC 3030, Australia. m.britz@landfood.unimelb.edu.au

Government’s role in RDI

Policy shifts over the last 10 years

The agri-food sector: can research, development and innovation be better served?

What is our record like in terms of research performance?

Perhaps a more suitable title would have been: have we got the underpinning policies for public sector research, development and innovation right - yet? Over the last 10 years, there has been a considerable change in the Federal government’s policies that support research, development and innovation (RDI) plus a shift in perceived role of government(s) in RDI, which is reflected in a declining total budget for this at Federal level.

Although this paper is not intended to be judgmental or critical of current public policy, inevitably in answering the above question comparisons will be made between policy platforms and evidence presented of the success of these policies to date.

The public normally judges success in terms of jobs, quality of life, economic growth and security, and has become increasing aware in our more accountability-driven society of what the measures are.

Policy differences between opposing shades of politics internationally really "boil down" to a fundamental question of "who pays?", including who pays for what part of the research, development and innovation matrix.

This presentation will therefore look at the underpinning policies that support public sector RD and I, the role of government in providing a framework for creativity and how well this has or will serve the agri-food sector. The following are my notes for this presentation.

Government’s role in RDI

Both State and Federal governments play roles in Leadership ● Priority setting ● Funding ●

Awareness raising ● Coordinating policies, particularly across jurisdictions ● Regulation and legislation ●

which impact on public and private agencies engaged in RDI. The spheres of influence cover Skills, education and training (schools, TAFE/VET and universities) ●

Knowledge, R&D capacity (through universities - ARC, NH&MRC, government research providers - CSIRO, AIMS, ANSTO): ●

$ to funding agencies ● national research priorities ● physical infrastructure development ● staffing, salary environment ●

framework for competitive or cooperative operational environments, across agencies ● Business attraction and support ● favourable trade, tariff, tax environment for business operations ● specific industry incentives ●

AusIndustry - IR&D grants, 125% tax concession for R&D ● Access to new, leading-edge technologies ● Links to communities, education and training ● New business creation ●

Investment funds - early stage business development, venture capital funds ● Supporting commercialisation of new technologies ● Intellectual property - regulation, ownership and exploitation ● Tax laws ●

Skills - business management, risk analysis ●

Policy shifts over the last 10 years have included:

Increasing recognition of the importance between knowledge and business creation, and the need to facilitate this CRC program ● ARC SPIRT ●

Development of technology parks/incubators (State level) ● Creation of early-stage capital, privately managed but government fund seeded ● Increased pressure of universities and government research agencies to increase external earnings ●

Decreased incentives for industry to undertake research (decline in the tax concessions to 125%) ●

More targeted national priority setting for RDI e.g. biotechnology, pharmaceuticals ●

Although these shifts at Federal and State levels will have positive impacts in creating new technology or knowledge-based businesses, the short-term impact on business investment in R&D has been negative. This is reflected information released recently by the Australian Bureau of Statistics.

Despite the rise in Business Expenditure on R&D (BERD) seen until the mid-1990s, BERD has fallen for the third year in a row. In 1998-99, BERD was estimated to be $3,992m at current prices, a fall of 5% on 1997-98 and 9% lower than the record level of 1995-96.

In volume terms, BERD also continued to fall, with 1998-99 down 7% on 1997-98.

R&D Labour costs rose very slightly in 1998-99 (an increase of $3m compared with 1997-98). Other current expenditure decreased by $143m, while Capital expenditure fell by $70m.

The change in BERD between 1997-98 and 1998-99 resulted from:

Approximately 2,550 businesses undertaking expenditure in both years; they incurred $3,880m of R&D in 1997-98 and $3,733m in 1998-99, a fall of 4%. Not all businesses decreased their expenditure in 1998-99; 41% of continuing R&D performers recorded increases in expenditure of 10% or more, while 36% recorded decreases of greater than 10%.

●

Approximately 650 businesses which recorded $323m in 1997-98, not reporting any R&D in 1998-99. ●

Approximately 620 businesses which did not report R&D in 1997-98, recording $258m in 1998-99. ●

Human resources devoted to R&D in 1998-99 were 24,201 person years, 1% lower than in 1997-98. ●

Australia's BERD as a percentage of GDP fell to 0.67% in 1998-99, following decreases in 1996-97 and 1997-98. The falls followed significant increases to a high of 0.86% in 1995-96.  Australia's BERD/GDP ratio remains relatively low when compared with other OECD countries.

This ABA data implies that current policies need to be reassessed urgently. Indeed, the Federation of Australian Science and Technology Societies (FASTS) lists ten major issues that need addressing:

1. INVEST IN THE FUTURE

Australian scientists are starved of research money, and the Government's White Paper contains no new funding. Government funding for research should be increased in the same way funding for medical research was boosted in 1999.

2. SCIENCE FOR THE BUSH

Coordinate Australian science to create jobs, improve existing industries, solve environmental problems and improve digital communication in regional and rural Australia.

3. MORE SCIENCE AND MATHS TEACHERS

Science and mathematics teachers take home less money than other teachers because they have a higher HECS debt to repay. Removing the inequity would help overcome the shortfall of qualified science and mathematics teachers.

4. BRAIN DRAIN BECOMES EXPRESS TRAIN

Job insecurity, lack of career paths and low salaries are driving good young scientists away from jobs in research. Australia is in danger of losing a generation of scientists and technologists, to jobs overseas or to other professions.

5. KEEPING AUSTRALIA IN TOUCH

Australia is losing touch with international science as the price of scientific journals rise and libraries cancel subscriptions. We need a national arrangement to buy electronic academic publications, to enable all Australian researchers access to the latest scientific ideas.

6. ESTABLISH THE FUTURE OF THE CRC PROGRAM

Cooperative Research Centres help industry and researchers work more closely on key national issues. The CRC Program should be on a regular footing, with an annual schedule to consider proposals for funding new centres.

7. BRINGING THE BOYS (AND GIRLS) BACK HOME

Introduce a scheme of fellowships and stipends to enable Australian scientists working overseas to return for short and medium-term research activities, to bring their knowledge back and take Australian ideas overseas.

8. A NATIONAL MAP AND COMPASS

Does Australia know where it is going in a rapidly-changing world? Setting national goals and national priorities, and identifying where S&T fit in is a key job for the Prime Minister's Science Council. Mechanisms to coordinate science and promote a whole-of-Government approach need strengthening.

9. REVERSING THE DECLINE: INDUSTRY INVESTMENT IN R&D

Industry investment in research continues to slump. Australia needs a range of incentives to encourage investment in R&D, including tax deductibility at internationally-competitive rates and a tax credit system. The Ralph Review reforms are just a start.

10. CHANGING THE CULTURE THROUGH SCIENCE AWARENESS

Australians are proud of their science, but know little about its value. A vigorous program of science and mathematics awareness targeted at the business community would help the nation appreciate the central role S&T play in invigorating existing businesses and generating new industries.

The agri-food sector: can research, development and innovation be better served?

This part of the presentation will look at the present research and development environment framework for the agri-food sector, particularly on the current and potentially changing role of the rural research and development corporations (RDCs). Issues include:

The PIERD Act Accountability and performance framework of RDCs: ● minimising costs for services provided, maximising long-term return to farmers/producers ●

social as well as economic outcomes ● public versus private benefit ● Priority setting for research and development in the RDCs ● Stakeholder input ●

Influence on creativity ● Foresighting ● Proposed links with ARC in platform technologies of national importance ● Is "critical mass" more productive in terms of creativity ●

Balancing tactical and strategic research priorities ● Cultural differences in approach ● Convergent thinking versus innovation ● Should we have "creativity" indices (Tony Gleeson’s papers) for RDCs? ●

How do "good ideas" emerge, versus consensus planning ●

What is our record like in terms of research performance? Performance in agriculture, plant and animal sciences is good ● Citations for agriculture sciences is second to astrophysics internationally: high impact relative to other areas of research ●

Rank in world share of research paper output is high relative to other areas of research ● Decline in citation of Australian research is seen as a reflection of the decline overall in our research base ●

Is this an indicator of the decline in research funding into universities (as claimed in recent newspaper discussions) ●

Are we funding the right areas of research? Cutting edge versus safe projects that will succeed? ●

What is our record like in terms of technology diffusion/extension/technology uptake?

Reflective evaluation of research impact by RDCs ● Evidence of uptake ● Evidence of impact: cost-benefit analysis, validation of research investment performed routinely in most RDCs ●

Broader economic impact of outcomes of investment ●