Ed Husic says big business must take some accountability for Australia's slipping standards in R&D. (Supplied)
In short:
A panel led by the chair of Tesla warns Australia has been "left behind" on research and development.
They warn falling investment could stagnate the economy and hurt Australia's long-term prospects.
What's next?
A review will seek to address the years-long slide in R&D in Australia.
Australia's future economic growth is at risk from plummeting investment in research and innovation, with big business failing to pull its weight, according to a panel appointed to review the sector.
The panel, led by Tesla chairwoman Robyn Denholm, has used a discussion paper ahead of the formal review to warn other countries are taking the nation's best research and making money from it, while Australia is "left behind".
Industry and Science Minister Ed Husic will tell the National Press Club on Wednesday the country's falling investment in research and development (R&D) "must stop", partly pointing the finger at the country's big businesses.
"Our science leads the world, but we are giving it away virtually for free," Mr Husic will say.
"While our productivity stagnates, our economic complexity goes backwards.
"And our future [is] increasingly reliant on a narrow set of industries supported by outmoded and fragile supply chains."
Australia falling behind
Mr Husic first announced Ms Denholm would lead a review of the R&D sector late last year, raising concerns the country's economic future was being stunted by a failure to spend on R&D, particularly when compared with other countries.
Australia's investment in research and development has plummeted from around the OECD average to about half that in the last 15 years, the discussion paper's authors said.
They also described Australia's economy as "one of the least differentiated in the world", and said it was failing to translate local research into local productivity.
"Australian research is being developed into globally transformational technologies — most often by other countries," it said.
Robyn Denholm warns Australia is being left behind in the research and development race. (AAP: Lukas Coch)
It found small to medium enterprises were driving 55 per cent of business R&D, despite it being much harder for them, while larger businesses were falling behind.
"The contribution of large businesses to Australia's R&D system needs to lift," the paper says.
Mr Husic's speech will also call out large companies' lack of action, saying that turning it around "will take a concerted effort".
International student cuts could have implications for R&D
The paper also points out the majority of the country's basic research is conducted by universities, which rely heavily on international student fees to fund it.
But the government is cutting back on international student numbers in an attempt to reduce migration, a move which has attracted criticism from the university sector.
Universities Australia chief executive Luke Sheehy said the government must compensate for limiting student numbers.
"Increased government investment in university research is needed to offset the impact of the government's attack on the international education sector," Mr Sheehy said.
"In the face of declining government funding, universities have relied on international student revenue to fund critical research activities. This is no longer a safe bet."
More uncertainty on the cards for international students
Photo shows A man in graduation outfit.
Ms Denholm, who wrote the paper along with former chief scientist Ian Chubb, surgeon Professor Fiona Wood and innovation expert Dr Kate Cornick, said she wanted the discussion paper to gather a range of views, and help inform future policy change.
"We excel in research," she said.
"Developing, translating and commercialising that research is critical for economic growth."
It is understood the panel's review will not be completed before the next election, and it is not clear whether the government will announce any policy change to boost R&D as part of its campaign.