Performance Review of the Australian Innovation, Science and Research System 2016

Key findings from the ISR System Review

The ISR System Review makes the following findings on the performance of the ISR System.

Knowledge creation

The origination of new ideas, often building on prior knowledge and driven by an aim to solve a problem

Overall finding: Australia is above average.

  • Australia has higher relative levels of funding for R&D activities in higher education and not-for-profit organisations than other nations.
  • Australia has world-class research infrastructure assets, although there is a need for overarching governance and ongoing, whole-of-life funding.
  • Australia’s research workforce is world class in a number of fields.
  • Australia has good levels of collaboration among researchers.
  • Despite a strong and internationally competitive university system, no Australian university is ranked in the global top 20.

Knowledge transfer

The identification and selection of knowledge for application and the passage of information between those who generated the knowledge and those who will apply the knowledge

Overall finding: needs to be improved

  • Data sharing is improving and there is an increase in the availability of government data sets.
  • Australians have sufficient levels of basic skills, although emerging trends in Science, Technology, Engineering and Maths (STEM) education are a cause for concern.
  • There is an increasing focus on networks to facilitate relationships and support collaboration between research institutions and businesses.
  • There are few direct mechanisms in Australia to support knowledge transfer and collaboration between researchers and businesses appears limited.
  • Compared to other countries, Australia under-utilises vocational education and training to build skills for innovation.
  • Collaboration between research organisations and businesses appears limited.

Knowledge application

The development, trailing, testing, refinement and iteration of ideas to address a specific aim

Overall finding: Australia’s knowledge application does not currently match its strength in knowledge creation

  • Australia has strong regulatory frameworks and sound banking, legal and corporate sectors, however there are regulatory restrictions on innovation in some areas.
  • Financial markets generally function well, although access to risk capital has been a constraint.
  • Skilled migration contributes significantly to Australia’s skills base.
  • A number of vibrant start-up ecosystems are flourishing around the country.
  • Government procurement could do more to foster innovation, as is the case in other countries.
  • Australian business expenditure on R&D is low relative to expenditure in other countries.
  • There are ongoing business, management and leadership skills gaps and the current supply of ICT graduates is not meeting industry needs.
  • Australian businesses rank poorly on international collaboration.


  • New statistical methods will better inform decision-making and allow for the proper evaluation of programme impact.
  • Australia’s multicultural society is an important asset, but Australia’s diaspora could be better leveraged.
  • Australia’s short-term oriented culture may affect innovation in different ways and Australia remains a gender-unequal society.


Australia has innovative SMEs and some highly innovative sectors, however Australia’s innovations are not that novel. In many sectors innovations introduced by Australian businesses are new to the business only and reflect a low degree of novelty.


Australia’s economic performance has been strong compared to other nations and Australia has performed well on a number of well-known indices of social outcomes, however there has been a slowdown in productivity growth.