Where to for transport R&D?

I was confronted at the recent National Innovation Policy Forum by Professor Roy Green’s observations that:

• Australia’s productivity growth has fallen to its lowest level in 60 years. At 1.2% Australia now ranks 16th in the OECD productivity rankings down from sixth in 1970.
• Australia’s industrial sophistication (“economic complexity”) now ranks 102 out of the 145 countries for which the index is calculated against all other countries.
• Australia’s investment in R&D has fallen to 1.68% of GDP which is the lowest of all OECD countries.
• Even if they are motivated to innovate, these small companies struggle to cross the ‘valley of death’ to get their innovation into the market.

This dire state of affairs is prompting some soul searching. This includes:

• a strategic examination of our R&D system;
• an exploration of how to lift the investment in R&D by industry;
• how to improve the success rate for market acceptance of innovations; and
• a consideration of what circumstances make it appropriate for governments to play the role of lead customer to introduce local innovations to the market.

The state of transport innovation in Australia

As you might anticipate, parallel reflections can be made on the state of transport innovation in Australia. Unfortunately, we lack the necessary data to make observations across the whole of the Australian transport sector, but from iMOVE’s limited experience we can observe:

• Steady growth over the life of the CRC in the rate of investment in transport R&D from $1.4M in FY 17-18 to $16.7M in FY 23-24.
• We can also see that, of the total contracted expenditure to date in transport R&D through iMOVE of $81M cash and $136M inkind, only $22.4M ($9.2M cash+$13.1M in-kind) or 10% came from corporate industry partners.

The transport industry displays a similar preponderance of small companies (98.5% of transport companies employ fewer than 20 people) as appears in the national picture.

It is difficult to measure the numbers of Australian innovations that have made it into commercial usage in the transport industry (here or overseas) but I suspect it can be counted on two hands.

My conclusion is that transport innovation in Australia is struggling in the same way that innovation generally is struggling. Is there a way forward? Yes, but only if we want it badly enough that we are willing to spend some money.

Investment

The two levers which must be pulled simultaneously are investment in R&D that generates novel technologies, and investment by the transport sector in trialling and validating the new technologies as they emerge. Both aspects are challenging but the second one is the more difficult one as most operational aspects of Australia’s transport system are owned and controlled by government entities.

During these times of tight budgetary constraint I am sure the last thing that Departments of Transport want to hear is a demand that they step up and play a much bigger role in the testing and proving of transport innovation, but for Australia to respond well to the growing pressures on our transport systems I see no other way. Do you?

National Innovation Policy Forum, February 2025

For those interested in this topic, on Friday 21 February 2025 in Melbourne, and on Thursday 27 February 2025 in Sydney, sessions for the the National Innovation Policy Forum are taking place. Details at: National Innovation Policy Forum