Strong research performances by Australian universities depend increasingly on unsustainable internal discretionary funding

By Frank Larkins

Summary: The latest authoritative information released by the Australian Bureau of Statistics on the research and experimental development performance of the Australian higher education sector, known as HERD, provides a valuable baseline from which to assess the impact of the COVID-19 pandemic in coming years.

The sector’s research performance has strengthened over the past decade with HERD funding reaching a new expenditure high of $12.2 billion in 2018. This level of performance was possible because of the increased proportion of HERD expenditure provided from discretionary income as an outcome of exceptional growth in annual university operating revenues. In 2008 for every $100 of external funds obtained universities were providing internal R&D support of $70. By 2018 universities were supporting research to the level of $103 for every $100 externally sourced.

A new research funding profile landmark was achieved in 2018 with universities collectively using more discretionary income to fund research and research training programs than the total funds obtained from external competitive sources. This result was achieved even though the percentage of total annual operating expenditure devoted to R&D steadily decline from 41% in 2012 to 37% in 2018.The present research funding strategy is unsustainable for the future given the financial consequences of the pandemic.

Since 2008 there has been a significant shift in the type of research reportedly undertaken by universities from basic and strategic basic research to applied research and experimental development, partly because of the 30% decline in business R&D as a percent of GDP. In 2018 only 41% of all university research was classified at the basic end, down from 50% in 2008. There are serious consequences for knowledge creation and Australia’s national innovation effort if this decline is not reversed.

Biomedical and Clinical Health Sciences have consistently been the dominant fields of research and the major contributor to the main socio-economic objective category. The proportion of university R&D undertaken in New South Wales and Victoria has increased over the past decade to be 59% of all activities in 2018.

Postgraduate students are the main contributors to the research workforce at around 56% of all the human resources deployed. A future with limited availability of overseas postgraduate students and the lack of ready access to research laboratories will be detrimental to the national research effort in the immediate future.

Professor Emeritus Frank Larkins is an Honorary Professorial Fellow from the Melbourne Centre for the Study of Higher Education and School of Chemistry, The University of Melbourne

Download full analysis

More Information

Professor Emeritus Frank Larkins

f.larkins@unimelb.edu.au