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Justifying the economic impact of science investment

Wednesday, 01 Apr 2015

Telecommunications network operators and computer system designers are in the top ten industry sectors in Australia for harnessing scientific knowledge and skills for economic gain.

This finding is part of a landmark economic report commissioned by the Office of the Chief Scientist and the Australian Academy of Science (AAS).

The report responds to the continued squeezing of Australian science by federal policy.

After a federal budget that slashed funding for scientific institutions including the CSIRO, NICTA and DSTO; and pared back programs such as cooperative research centres (CRCs) and Australian Research Council (ARC) grants, Australia's scientists have been looking for a way to justify continued investment, particularly of public funds.

This report, The importance of advanced physical and mathematical sciences to the Australian economy, is clearly intended to be that justification.

"The contribution of science to the Australian economy, particularly the advanced physical and mathematical sciences covered in this report, is easy to take for granted," Australia's chief scientist Professor Ian Chubb  and AAS president Professor Andrew Holmes said in the report's foreword.

How the numbers stack up

The report calculates what it calls "direct" and "flow-on" effects of advanced physical and mathematical sciences.

These are taken by the report's authors to be physics, chemistry, earth sciences and mathematical sciences, while the reference to 'advanced' means "science first applied in the past 20 years."

The authors note that biology and life sciences are not included in their calculations. Science input is thought to directly - and conservatively - add $145 billion to Australia's economy, which is equivalent to a bit over 11 percent of Australia's economic output.

This is thought to have a flow-on effect that adds $147 billion in value to the economy – for a total impact of $292 billion, or 22.5 percent of our economic output.That impact could be even greater, if conservatism factored into the equation is set to one side.

"While the most likely magnitude of the total impact ... on the economy is equivalent to 22.5 percent of output, we think that the true magnitude of that impact lies between 17.5 percent of output and 28.1 percent of output," the report notes.

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