ICT exports tumble, but R&D up 13%

Exports in the technology industry fell by $551 million to $4.5 billion during 2009, but overall research and development spending by Australian companies increased, new figures from the ABS and Australian Computer Society reveal.

Innovation minister Kim Carr said in a statement the boost is a “good sign” for the economy and signifies why the R&D tax credit should be passed through Parliament next week.

The latest figures from the Australian Computer Society reveal exports dropped by $551 million during 2008-09 to $4.5 billion. Overall revenue in the industry fell by $3.1 billion to $81.5 billion as well.

“One of the biggest weaknesses was found among computer hardware, representing $914 million of the $4.5 billion decline,” said Carr.

The decline in exports came at a time when the information technology industry was hurting due to the financial crisis, when many companies opted to stay with the hardware they already had and delay software and computer upgrades.

The figures show exports of ICT equipment totalled $2.25 billion, with software and services representing another $2.2 billion. The ICT industry is current sitting on a trade deficit of $22.1 billion.

The total amount of R&D in all research fields in the ICT sector came to $14.3 billion in the private sector, with another $6.7 billion added by higher education facilities. ICT represented 25.58% of all R&D expenditure in the private sector, with the higher education R&D spending representing 3.25%.

Meanwhile, the Government announced yesterday the corporate sector is continuing to increase their investment in research and development, with ABS data showing expenditure increased by 13% to $16.9 billion.

The figures show business expenditure on research and experimental development as a percentage of GDP increased to 1.34% from 1.26% during 2007-08, moving Australia to 11th among the 30 OECD counties listed by the ABS.

The data also revealed business expenditure for pharmaceuticals reached $1.2 billion with growth of 12%, large businesses dominated R&D spending representing 71% of total growth, with SME R&D spending at 9%.

The manufacturing industry accounted for the largest share of expenditure at 26%, while the amount of human resources devoted to R&D increased by 5.3%. The total years of effort reached 53,556 during the 2008-09 period.

Innovation minister Senator Kim Carr said in a statement the figures show Australian firms are committed to increasing their innovation and are developing new products.

“To have such a significant growth in BERD, especially over a period that covers the Global Financial Crisis, is a testament to the resilience and confidence of the business community. It demonstrates that businesses understand that innovation and R&D are critical to their long-term planning and prosperity,” he said.

“This boost in BERD is a good sign for the Australian economy and it shows the business community is embracing innovation,” Carr said.

The comments also come as the Government prepares to introduce its new R&D tax credit into Parliament next week. Carr said continued expenditure relies on such a benefit being passed into law.