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Science and Research3.1 Business R&D

3.1.1 Total business expenditure on R&D (BERD)

As experimental development is dedicated to producing new materials, technologies, products or processes, it is closely related to business innovation. It has previously been estimated that R&D-active Australian firms were three times more likely to introduce new-to-market goods and service innovations than non-R&D-active ones.[65] BERD currently makes up just over half (52.7 per cent) of total Gross Expenditure on R&D (GERD). It is particularly relevant to firms in technology-intensive industries such as Manufacturing but also increasingly in Professional, Scientific and Technical Services, which now represents the largest contribution to BERD. Following a notable decline in 2015-16, total BERD lifted from $16.7 billion in 2015-16 to $17.4 billion in 2017-18. The largest increase in this period occurred in overseas expenditures (up $534 million), while in Western Australia expenditures continued to fall sharply (down $490 million). In 2017-18 by field of research, the largest contribution to BERD came from Information and Computing Sciences ($6.7 billion) and Engineering came in second ($4.7 billion).[66]

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3.1.2 Business expenditure on R&D (BERD) by industry

Australia's BERD is relatively concentrated, with just four industries accounting for more than three-quarters of the $17.4 billion in total expenditure. The largest contribution in 2017-18 was in Professional, Scientific and Technical Services (29.3 per cent), which has overtaken Manufacturing (26.4 per cent) for the first time. This is especially significant given that as recently as 2011-12, Professional, Scientific and Technical Services accounted for 15.5 per cent of total BERD, compared to 24.4 per cent for Manufacturing and 22.4 per cent for Mining. Mining expenditure peaked in 2011-12 (at $4.1 billion) and has fallen to a quarter of that year's value --- to $1.0 billion in 2017-18---contributing a comparatively modest 6.0 per cent to total BERD.[67]

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