The Australian Government's Innovation Report

Australia’s performance declined in only four indicators between all three scorecards:
• US patents per capita (from 54 patents per capita to 52 and now to 51 patents per capita)
• investment in ICT as a percentage of gross capital formation (from 26% to 24.7% and then to 22.9%
in the 2006 scorecard). Despite this fall, Australia’s ICT investment ranking dropped only one place to
be a highly credible 4 th in the OECD and remains nearly 30% above the OECD average.
• investment in machinery and equipment (from 8.05% of GDP to 7.98% in the 2004 scorecard and now
down to 7.79% of GDP in the 2006 scorecard); and
• average annual MFP growth (from 2.4 to 1.4% and now to 1.1%).
For only two indicators did the change fluctuate between the periods:
• investment in venture capital (from 0.23% of GDP and then up to 0.28% and now to 0.25% of GDP in
the 2006 scorecard); and
• international science and engineering collaboration (from 113 countries collaborated with down to 106
and then up to 114 countries collaborated with in the 2006 scorecard).
Of the five indicators that decreased in nominal terms, two of these indicators, investment in ICT and multifactor
productivity, fell at a slower rate between the 2004 and 2006 scorecards than between the 2002 and 2004 scorecards.
While investment in venture capital as a percentage of GDP declined, this occurred in a time when venture
capital was declining for the entire OECD. In fact, Australian investment in venture capital fell at a substantially
slower rate than the OECD average. This is true also for the number of US patents per capita. Even though
Australia registered fewer US patents than in previous scorecards, Australia actually improved its OECD ranking
by one place. Investment in new equipment also decreased, although the decrease was marginal.
Three indicators exhibited higher positive growth, in percentage point terms, between the 2004 and 2006 scorecards
than between the 2002 and 2004 scorecards. By magnitude of the increases these were in:
• international science and engineering collaboration (13.7 percentage points);
• scientific and technical articles (5.1 percentage points); and
• broadband subscribers (3 percentage points).
Summary of Australia’s innovation performance relative to OECD countries
Figure 2 illustrates Australia’s overall innovation performance by comparing Australia’s performance across the
18 indicators with the OECD averages. Australia performed higher than the average in 14 out of the 18 indicators.
It also out-performed the OECD average by 50% or more in five indicators. These indicators are science
graduates in the labour force, scientific and technical articles per capita, venture capital investments, innovators
with collaboration activity and businesses utilising the internet for sales. These findings suggest that Australia
is successfully improving the level of scientific human capital, is generating new knowledge and is investing
in emerging technologies and start up companies. It also demonstrates a willingness to take advantage of the
expanding virtual marketplace and other dynamic networks.
Chapter 4 - Australian innovation scorecard 127