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Highlight
- Ed Chung of TechnologyOne advocates for self-funded R&D to drive innovation.
- Australia's R&D expenditure has declined, falling below the OECD average.
- Calls for a shift from government dependence to fostering business-driven innovation.
In the landscape of global innovation, Australia is facing significant challenges. The country has witnessed a notable decline in research and development (R&D) expenditure, raising concerns about its future as an innovation leader. Ed Chung, CEO of ASX:BHP’s TechnologyOne, argues that instead of relying on government incentives, companies should prioritize their own R&D investments.
Ed Chung's Perspective on R&D Investment
TechnologyOne, a prominent software company based in Brisbane, exemplifies the philosophy of self-reliant innovation. With a market value exceeding $10.25 billion, it invests about 25% of its annual revenue into in-house R&D. This approach has fueled consistent growth and success. Chung emphasizes, "Businesses should open minds, not palms," advocating for an independent approach to R&D funding.
A Broader Context: National R&D Challenges
Australia's R&D spending has declined to 1.6% of GDP, considerably below the OECD average, a point highlighted by Robyn Denholm, chair of Tesla. The federal government is reviewing R&D incentives, as the country seeks to reverse this trend. However, Chung stresses that relying solely on government solutions isn't sustainable. The nation's approach must shift from dependency to proactive investment in innovation.
Industry Leaders Echo the Call for Change
Prominent figures in the business community, including Bran Black of the Business Council of Australia, echo Chung's sentiments. They advocate for increasing private investment and policy reforms to stimulate business-led innovation. Suggestions include raising the cap on R&D incentives and revising investment strategies in sectors like superannuation to boost innovation spending.
Moving Beyond Incentive-Driven Innovation
Ed Chung underscores the need to cultivate a cultural shift towards innovation as a competitive advantage. He argues that Australian companies must transcend an “incentive-led culture” and view R&D investment as a strategic priority, not just a government-supported endeavor. This mindset shift would mark a pivotal transformation in enhancing Australia's position in the global R&D landscape.
Ed Chung's call for self-funded R&D represents a crucial step towards revitalizing Australia's innovation landscape. By fostering a culture of business-driven research and development, Australia can regain its footing on the global stage and ensure sustainable growth and success in the technology sector.
