R&D and business in Australia

Clearly Taiwan, Israel, Japan and South Korea are the outliers. Australia is well down the pack at number 20. Canada, a country to which Australia is often compared, easily outperforms this country.

For the size of our economy we're not very innovative.

How much bang for the buck are we getting for our R & D dollars?

I used the Batelle Memorial Institute's 2013 estimate / forecast for 2013 R & D expenditure and produced this table for selected countries.

We find the same four countries at the head of this table. However, notice Canada at number 5.

As you can see even Saudi Arabia outperforms Australia in patents per R&D dollar. Canada is far ahead of us. It manages 226 patents / billion dollars compared to our meagre 71.

I'll readily concede these are rough and ready measures of innovativeness. For example comparing 2013 patents with 2013 R&D expenditure is not really realistic.

However more refined measurements do not tell a different story. Comparing 2013 patents with 2011 and 2012 R&D alters the absolute numbers but not the rankings.

Our relative performance is miserable.

Does it matter? So we're not the world's most innovative country. We can always dig stuff out of the ground. This is the "lucky country" after all.

Starting in 2003 Australia experienced what will probably turn out to be a once in a lifetime terms of trade boom. The price of our major exports, especially iron ore and coal sored compared to the cost of imports. In January 2003 the spot price of iron ore delivered to China was around $14 / ton. (All prices are taken from the IMF External Data Library). It peaked at $187 / ton in 2011 and is now back to $92 / ton. This is still well above the long term trend but the fundamentals do not look good. The first Hockey budget assumed an iron ore price north of $100 / ton.