Australia's innovation problem is not funding. It is execution.
New research argues the country's government-funded innovation programs are mandating frameworks that the evidence links more strongly to failure than success. Technology Readiness Levels, Lean methodology, Business Model Canvas: all required in procurement contracts, all empirically questionable.
The numbers are bleak. An estimated 95% of researchers fail to commercialise their work. More than 90% of granted patents never reach market. As many as 90% of tech startups fold. Even VC-backed companies close at high rates. Yet policy still measures success by patents filed, startups launched, and funding raised.
Australia ranks 22nd among 51 developed economies on the Global Innovation Index 2024. The country performs well on inputs like education and R&D infrastructure, but underperforms on outputs: new businesses, domestic IP creation, high-tech exports. Only 46% of Australian businesses were actively innovating in 2023, down from 54% the year prior.
The Australian Academy of Technological Sciences and Engineering (ATSE) calls it a productivity, commercialisation, and coordination problem. R&D spend sits at 1.69% of GDP in 2023-24, down from a peak of 2.24% in 2008-09. In 2023, Australia filed 31,515 patent applications. Only 2,556 came from Australian residents.
The recently released Ambitious Australia report identifies research translation as central to economic future. But it risks the same category error that has dogged policy for decades: treating the research system as if it were the innovation system.
ATSE's consultation findings point to unstable funding, grant bureaucracy, poor IP frameworks, and fragmented coordination between universities, industry, and government. The independent review argues for a national innovation council, stronger support for foundational research, better business R&D incentives, improved startup financing, and greater use of public procurement for domestic tech.
For sales teams in ANZ tech: if the system is optimised for grant capture rather than revenue generation, expect more founder conversations about pivoting out of Australia entirely. The most competitive innovations will follow the money. And the money is offshore.