NO.010

PRODUCTIVITY COMMISSION TO REVIEW PUBLIC SUPPORT FOR SCIENCE AND INNOVATION

The Treasurer Peter Costello, and the Minister for Education, Science and Training, Julie Bishop MP, today announced that the Productivity Commission will undertake a research study into the economic, social and environmental returns on public support for science and innovation in Australia.

The Treasurer said that science and innovation is a Government priority and makes a significant contribution to productivity, growth and Australia’s recent and ongoing economic and social prosperity.

Minister Bishop also noted that the Government has provided significant support for research, science and innovation in Australia through the Backing Australia’s Ability and Backing Australia’s Ability: Building our Future through Science and Innovation packages. Funding for science and innovation now exceeds $5 billion each year.

She went on to say that the study will provide a rigorous evaluation of science and innovation support in Australia and would complement ongoing and planned reviews of the Backing Australia Ability programmes.

The Commission’s study will consider all key elements of the innovation system, including research and development, and especially:

• the economic impact of public support for science and innovation, including impacts on Australia’s recent productivity performance;
• impediments to the effective functioning of Australia’s innovation system; and
• the broader social and environmental impacts.

The terms of reference for the study are attached.

Further information on the study can be obtained from the Productivity Commission’s website at: www.pc.gov.au or by contacting the Commission directly on (02) 6240 3239.

10 March 2006

Contact:

David Alexander – Treasurer’s Office – 02 6277 7340

Dr Jade Sharples – Minister Bishop’s Office – 02 6277 7460

TERMS OF REFERENCE

ECONOMIC, SOCIAL AND ENVIRONMENTAL RETURNS ON PUBLIC SUPPORT FOR SCIENCE AND INNOVATION IN AUSTRALIA

Productivity Commission Act 1998

The Productivity Commission is requested to undertake a research study on public support for science and innovation in Australia.

Background

The Australian Government has identified science and innovation as one of its strategic priorities, recognising its contribution to Australia’s economic and social prosperity.  The Government has provided significant support for science and innovation, which it has augmented since 2001 through Backing Australia’s Ability   (BAA) , and funding now exceeds $5 billion per annum.  In light of this investment, the Government considers that a study of public support for science and innovation is warranted.  This study will complement the ongoing and planned reviews of BAA programmes. 

Scope of the study

The Commission is requested to:

1. Report on:

• the economic impact of public support for science and innovation in Australia and, in particular, its impact on Australia’s recent productivity performance;
• whether there are adequate arrangements to benchmark outcomes from publicly supported science and innovation and to report on those outcomes as measured by the benchmarks.

The analysis should cover all key elements of the innovation system, including research and development, taking into account interaction with private support for science and innovation, and paying regard to Australia’s industrial structure.

2. Identify impediments to the effective functioning of Australia’s innovation system including knowledge transfer, technology acquisition and transfer, skills development, commercialisation, collaboration between research organisations and industry, and the creation and use of intellectual property, and identify any scope for improvements;

3. Evaluate the decision-making principles and programme design elements that:
   1. influence the effectiveness and efficiency of Australia’s innovation system; and
   2. guide the allocation of funding between and within the different components of Australia’s innovation system;

      and identify any scope for improvements and, to the extent possible, comment on any implications from changing the level and balance of current support;

4. Report on the broader social and environmental impacts of public support for science and innovation in Australia.

Although the Commission is not requested to review individual programmes, it can, where necessary, undertake case studies of particular types of public support for science and innovation. It should also draw on relevant international experience.

The Commission is to produce a draft report and a final report within 12 months of the receipt of this reference. The report is to be published.