Challenge: Little incentive for health innovators to stay and thrive in Australia
For a wealthy country, Australia’s economy remains poorly diversified. Government expenditure on R&D across all areas fell to less than one half of one percent of GDP in 2019-20.1 A decline in the export value of just a few key commodities can jeopardise our whole economy.
COVID-19 has exposed how vulnerable Australia is because of our relatively narrow manufacturing base. 26 of the world’s nations accounted for 95% of global pharmaceutical exports in 2018, valued at $570 billion. The world’s Number One exporter of pharmaceutical products was Germany with 16.5% of global pharmaceutical exports. Number 26 was Australia, with 0.44%.2 In the same year (2018), Australia imported pharmaceutical products valued at $7.17 billion, or 1.26% of global pharmaceutical imports.3
The health sector provides an opportunity for Australian business to meet local demand and build export markets for products and services. There is a role for governments to create momentum for domestic commercialisation of Australian research and realise the return on the significant public investment in research. Work is already underway through the University Research Commercialisation Scheme and the Modern Manufacturing Initiative to build opportunities for local advanced medical manufacturing.
Australia can become a regional gateway for the provision of world class medical services and clinical trials, capitalising on our ethnic diversity and strong networks of hospitals, pathology and pharmacy. This can reinforce our global reputation as the regional flagship health system, helping to improve health in the Asia-Pacific region, boosting national security and regional alliances.
Attracting and incentivising new businesses to establish and thrive in Australia will create markets, skills and products that not only serve the population, but create new export opportunities. We have shown that we can create new and globally significant businesses over the years with companies like CSL, we need to expand on our successes of the past both in terms of size and scale of commercial endeavour. A modern economy must include a mix of enterprise, incentivising small and medium enterprise along with larger commercial players.
National stocktake of health and medical research funding
A national ‘stocktake’ of the public, private and philanthropic programs funding Australia’s research efforts in the last two decades will provide a clearer picture of what health and medical research is underway around Australia and where resources are best directed.
With a clearer picture of Australian health and medical research funding, we can begin to understand instances of duplication of research efforts, gaps in the research funding pipeline, and identify areas of national strength and global competitive advantage. We can also better align our research efforts with national health priorities.
There is a view amongst researchers that the same or similar research projects are too often funded, leading to duplication. A national stocktake would help test the extent to which this is true.
The findings of such a national stocktake of health and medical research could form the basis of a series of recommendations on where funding needs to be increased or redirected. This approach would also be valuable in informing a National Health and Medical Research Strategy.
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1 Australian Government, Science, Research and Innovation (SRI) Budget Tables, 2020-21, Australian Government investment in R&D by sector and sub-sector, and other analyses Table 6, Australian Government investment in R&D as a percentage of Gross Domestic Product. A $1 billion boost one off boost to the Research Support Program in 2020-21 has temporarily increased the R&D expenditure to 0.60, still below the long term average of 0.61%.
3 Sourced 19 November 2020 from https://atlas.cid.harvard.edu/explore?country=undefined&product=129&year=2018&tradeDirection=impor t&productClass=HS&target=Product&partner=undefined&startYear=undefined