Examining Australia’s Agricultural R&D program

While headlines trumpet the rise of tech start-ups, unicorn valuations, and AI breakthroughs, Australia faces a sobering reality: our investment in innovation and R&D is actually sliding backwards, undermining our competitive position in the global technology race.

In February 2025 the Australian Federal Government released the Strategic R&D research paper which highlighted the critical challenges facing Australia’s agricultural innovation amid declining national R&D investment (1.66% of GDP vs OECD average of 2.73%).

The report emphasises how Rural Research and Development Corporations (RDCs) drive agricultural advancement through industry-government co-investment but identifies significant barriers to commercialisation and industry adoption. Agricultural innovation is specifically flagged in food security (drought-resistant crops, precision agriculture), water management (efficient irrigation, desalination), and biosecurity platforms.

Current State of Australia’s R&D System

• Australia produces 3.5% of the world’s research publications with strong citation rates (42.2% higher than world average), demonstrating quality research capabilities
• R&D investment has declined from a peak of 2.24% of GDP in 2008-09 to 1.66% in 2021-22, significantly below the OECD average of 2.73%.
• Business expenditure on R&D (BERD) has fallen from 1.37% to 0.88% of GDP, while government R&D investment declined from 0.27% to 0.16% over the same period.
• Australia invests heavily in basic and applied research but underinvests in experimental development compared to high-performing countries.
• The nation’s economic complexity is falling despite high rankings in scientific and technological knowledge base complexity.
• Food and water security are identified as societal needs requiring R&D, including drought-resistant crops, precision agriculture, water-efficient irrigation systems, and biosecurity measures.
• Co-investment approach between government and RDCs represents one of Australia’s more successful public-private partnership models for research funding and industry development.
  

Business and Agricultural Industry Issues

• Australia increasingly relies on SMEs for R&D, unlike competitor countries where large enterprises dominate R&D expenditure.
• Rural Research and Development Corporations – RDCs drive agricultural innovation through co-investment between government and industry levy payers.
• The number of medium-sized businesses has decreased by over 21% from 2008-2021, which used to drive R&D spending.
• The 15 RDCs focus on practical improvements for their respective agricultural commodity sectors through targeted R&D and extension investments.
• Australia’s startup ecosystem ranks 8th in the G20 but faces challenges in securing markets, raising funds, and accessing talent.
•  Venture capital investment tends to favour financial technology over R&D-intensive or “AgTech” companies.
• Barriers exist between academic and industry sectors, with researchers lacking mobility between sectors and businesses undervaluing research skills.
• Australia’s R&D workforce demonstrates poor sectoral alignment
• Despite the RDC framework’s strengths, agricultural R&D faces the same systemic challenges affecting Australia’s broader R&D ecosystem, including declining overall national R&D intensity and difficulties in commercialisation pathways.

Australia has potential to become a globally competitive exporter of AI technologies, especially in the livestock, horticulture & water management sectors.

Recommendations from the Researchers

The paper highlights the need for a more purposeful R&D system with aligned funding systems, institutional arrangements, and incentives. To reach the OECD standard of 2.73% of GDP, Australia needs an extra $25.4 billion of annual R&D investment across all sectors.

Agricultural R&D opportunities that are currently underserved include drought-resistant crops, precision agriculture technologies, water-efficient irrigation systems, and enhanced biosecurity measures.

Key areas for reform include strengthening collaboration between research and industry, better supporting commercialisation, develop a coordinated R&D system as well as expanding R&D spend within the broader business community.

My Thoughts

While Australia sits proudly near the top of global research capability rankings, it languishes in the economic complexity basement—a glaring paradox that exposes how our world-class discoveries repeatedly fail to transform into economic output.

It’s time for Australia’s business sector to step up and invest in novel, experimental innovations which will not only propel our economy forward but deliver breakthrough solutions to the globes most pressing challenges.