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Chapter OverviewNetworks and Collaboration

The content of this chapter draws on data collected and published prior to the COVID-19 outbreak. Until new data becomes available, the COVID-19 page provides some key estimates and information related to the impact of COVID-19 on business activity.

The systems view of innovation brings into focus the importance of the networks connecting individuals and organisations. Knowledge is often highly specialised and fragmented, and some of the economic benefits are unattainable without its transfer and diffusion. Various measures of collaboration can indicate the system's connectedness. It is a widely accepted principle that market incentives are not conducive to the transfer and diffusion of knowledge, implying a clear role for policy facilitate the flow of knowledge across different parts of the system to maximise the benefits of innovation for society at large.

Roughly one in five innovation-active businesses in Australia collaborate for the purpose of innovation. Businesses collaborate primarily with their customers and suppliers, or with other businesses owned by the same company. Collaboration between businesses and the public research sector is generally weak, and international collaboration is weaker still. Business funding of R&D in the higher education research sector is low. Of the modest number of businesses undertaking joint R&D, large businesses and businesses in the Mining or Professional, scientific and technical services industries are most active.

A 2017 project by the Department of Industry, Innovation and Science identified a number of obstacles to business-research collaboration including misaligned priorities, difficulty finding a collaboration partner, and a lack of skills and management capabilities.[104] The OECD suggests there is a role for governments and publicly funded research organisations to bring together the right partners with the aim of tackling complex inter-disciplinary challenges. Experience across the OECD shows that investments are often essential in applied research centres, pilot production facilities and demonstration facilities, to take new discoveries from the laboratory to production.[105]