Understanding the Strategic Examination of Australia's R&D System
Australia's research and development landscape stands at a pivotal moment. The federal government launched a comprehensive strategic examination of the nation's R&D system in late 2024, aiming to strengthen science, innovation and economic resilience. This initiative, known formally as the Strategic Examination of Research and Development (SERD), responds directly to long-standing concerns about declining investment levels and fragmented coordination across universities, industry and government.
The examination forms part of the broader Future Made in Australia agenda and follows recommendations from the Universities Accord. It seeks to maximise returns on public and private investment while building sovereign capability in critical technologies, net-zero transitions and advanced manufacturing.
Background and Context of the Review
Australia's R&D intensity has slipped to approximately 1.66 percent of gross domestic product, well below the OECD average of 2.73 percent. This decline has prompted urgent calls for reform from peak bodies including Universities Australia and the Australian Academy of Science. The examination addresses how the country can better translate world-class research into commercial outcomes and national priorities.
Announced in the 2024-25 Budget, the review builds on earlier policy work such as the National Science Statement and National Science and Research Priorities. It recognises that effective R&D supports productivity growth, job creation and responses to global challenges including climate change and supply-chain security.
The Independent Panel and Consultation Process
An expert panel led the year-long examination. Chair Robyn Denholm, alongside Emeritus Professor Ian Chubb AC, Winthrop Professor Fiona Wood AO and Dr Kate Cornick, consulted widely with universities, industry, peak bodies, First Nations communities and the public. The process included a discussion paper released in February 2025, six issues papers for targeted feedback, roundtables and thousands of submissions.
Stakeholders highlighted the need for clearer roles across government, research institutions and business, improved collaboration and stronger incentives for industry investment. The panel delivered its final report, titled Ambitious Australia, to government in December 2025 before public release on 17 March 2026.
Key Findings on Australia's Current R&D Performance
The examination identified both strengths and systemic weaknesses. Australia excels in foundational research, particularly in medical sciences, environmental research and engineering. However, business expenditure on R&D remains low relative to peer nations, and commercialisation pathways are often underdeveloped.
Fragmented funding mechanisms, short-term project cycles and limited mobility between academia and industry were flagged as barriers. The report notes that while public investment supports high-quality discovery, greater scale and focus are required to deliver measurable economic and societal impact.
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The Ambitious Australia Final Report and Its 20 Recommendations
The final report presents 20 recommendations organised around six core elements. These aim to create a more cohesive, ambitious and outcome-oriented RD&I system. The six pillars are greater focus and scale for impact, a world-class foundational research system, incentives for future industries, investment and capital mechanisms, workforce capability development, and government leadership by example.
Recommendations emphasise long-term strategic planning, enhanced collaboration between universities and industry, and reforms to the R&D Tax Incentive to encourage higher-risk, higher-reward projects. The panel stresses the importance of protecting discovery research while accelerating translation into practical applications.
Implications for Australian Universities and Higher Education
Universities play a central role in the proposed reforms. The examination calls for stronger alignment between university research strengths and national priorities, alongside improved mechanisms for industry co-investment and researcher mobility. PhD training and postdoctoral pathways are highlighted as critical areas for workforce development.
Peak bodies such as Universities Australia have welcomed the opportunity to lift national ambition through research and innovation. Responses stress the need for sustained public funding to underpin foundational research while creating clearer pathways for commercialisation. Institutions are already exploring new partnership models in response to the report's direction.
Stakeholder Perspectives and Responses
Industry groups, research organisations and universities have broadly endorsed the report's vision while urging swift implementation. The Australian Academy of Science described the recommendations as a coherent national roadmap and called for immediate action to reverse funding declines. Research Australia and AusBiotech emphasised opportunities in life sciences and medtech.
Some submissions noted risks if foundational research receives insufficient attention amid a push for applied outcomes. The panel's emphasis on balance between discovery and translation has been praised as a strength of the final package.
Challenges Ahead and Opportunities for Reform
Implementation will require coordinated action across multiple portfolios and sustained political commitment. Reversing more than a decade of relative decline in R&D investment demands new funding commitments and cultural shifts in how government, universities and business interact.
Opportunities include building sovereign capability in critical minerals processing, renewable energy technologies and advanced manufacturing. Enhanced international collaboration and better integration of First Nations knowledge systems are also identified as areas for growth.
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Future Outlook and Next Steps
The Australian Government is currently considering the Ambitious Australia report. A formal response is anticipated in coming months, potentially informing the 2026-27 Budget. Stakeholders across the higher-education and research sectors are preparing submissions and pilot initiatives aligned with the six pillars.
Success will ultimately be measured by increased business R&D expenditure, stronger university-industry linkages, and tangible contributions to productivity and national resilience. The examination represents a once-in-a-generation opportunity to position Australia as a global leader in research translation and innovation.
Actionable Insights for Academics and Administrators
University leaders are advised to review alignment between institutional research strategies and the report's six elements. Opportunities exist to strengthen industry partnerships, diversify funding sources and enhance researcher training in commercialisation and entrepreneurship.
Early-career researchers and PhD candidates should monitor developments in workforce capability recommendations, which may influence fellowship schemes and mobility programs. Proactive engagement with the Department of Industry, Science and Resources consultation processes will help shape implementation.