Australia's R&D - Australia's Future?: The Case for a National Approach


Research Paper 18 1996-97

Matthew L. James
Science, Technology, Environment and Resources Group
30 June 1997

Contents

Major Issues Summary

Introduction

Technological Innovation in Australia

Australia's Innovation Record
Strategies for Innovation

Science and Engineering Policy in Australia

Administrative Arrangements

Policy Strategy

Technology Assessment

National R&D Administrations

Asia

Western Europe

North America

Summary

A Technical Policy Agenda

Postscript

Science, Technology, Engineering and Society

Communicating Science and Technology to the Public

Science Communication Methods

A Technological Culture

References

Glossary

Major Issues Summary

There is a high correlation between the wealth of nations, in terms of Gross Domestic Product (GDP) per capita, and Research and Development (R&D) intensity (R&D/GDP). In one estimate, an enhanced Commonwealth commitment to R&D support could add $40 billion per annum to GDP by 2002-3. The Government's recognition of this fact was illustrated in its 1997-1998 Budget increase of 17.6% in assistance for manufacturing, with the largest growth for general industrial R&D funding, from $68.5 million up to $164.3 million. This paper does not attempt to be an economic evaluation of any such policy outcomes but examines broader issues relating to the basis for R&D effort in Australia.

The science, engineering, technology and innovation sector has the potential to lift Australia's declining manufacturing sector into a dynamic future. Through innovation-led manufacturing strategies, the nation can provide value-added exports to the ever-changing, competitive world. Our existing R&D intensive industries, though few in number, have achieved notable successes and strengths on which to build. R&D serves as a useful measure of innovation which is at a sub-optimal level for growth here. These are the arguments for stronger investment support from the financial sector, a national technology policy, and better support programs for advanced manufacturing technology, engineering and science if they are to assist Australia in the global age ahead.

Such policies have the ultimate goal of an Australian society with full employment and commitment to environmental standards, waste minimisation, and wealth generation. Given community support for the environment and sustainable growth, a vision embracing quality of life and an integrated approach can enable policy change for engineering and science too. Promoting Australia's regional role in trade and infrastructure development, and ensuring closer ties between public research and private industry may allow in-house, local R&D to flourish. In turn, encouraging innovative commercialisation can profit Australia. Then we can answer the question 'Australia's R&D-Australia's Future?' and decide whether we want an industry policy based on more employment in R&D intensive manufacturing, led by small to medium enterprises (SMEs).

Current Commonwealth policy involves direct funding, tax concessions and programs of a wide range to suit a pluralistic system. While this paper does not seek to provide an evaluation of such policies, recent reports provide some guide. In 1997, the Federal Government received reports from a range of commissioned studies on business, industry, information technology and science policies. The Review of Business Programs recommends broad simplification of existing schemes including R&D assistance. The Chief Scientist comments on ways to simplify current program and policy arrangements and recommends means of identifying national priorities for science, engineering, technology and innovation. Separate reviews of the Information Industries Taskforce and the Information Policy Advisory Council also apply.

Existing Australian science and technology policy reflects a legacy of past administrative arrangements built around public sector R&D and an absence of a more efficient, strategic national management plan to involve all players. However, some policy options exist, directed towards a vision for the nation striving towards an international, integrated and innovative role. It can be argued that these policies must seek to acknowledge the full role of science and engineering in the socio-economic process through technology assessment.

Some other nations have adopted a strategic approach, through government and parliamentary agencies, by applying policies often involving high-level administration to set national priorities. Through this priority setting and through foresight studies and other such processes, linkages strengthen between the public and private sectors to enable a cooperative, coordinated and networked national science and engineering action plan.

Such an approach requires political will and public support, but Australia's unique heritage has created uneven community interest in science and environmental concerns, along with corporate apathy. Other nations have recognised the importance of public understanding of technology issues and recognised that this requires appropriate communication programs. These entail a range of techniques and education programs, with the participation of the media and science and engineering practitioners themselves. Only then can the public well support the strengthening of national science, engineering, technology and innovation.

Introduction

Despite a decline in manufacturing's share of Gross Domestic Product (GDP), from 17.8% in 1982-83 to 14.6% in 1994-95, it remains our most important activity in gross product terms apart from services (ABS 1997, 317). Table 1 shows the relative rankings of primary, secondary and tertiary industries today and a decline in manufacturing industry's proportion of the gross domestic product. The actual output has risen over the period shown to reach a seventh of national economic output. In terms of gross product, manufacturers produced $59,638 million in 1994-95, and in terms of sales of goods and services $195,958 million for the same period. The contribution from goods-producing industries (agriculture, forestry and fishing, mining, manufacturing, electricity, gas and water, and construction) has declined steadily since the mid 1980s. Yet manufacturing and wholesale trade recorded the largest percentages of businesses which increased employment by more than 10% between the 1994 and 1995 financial years (ibid, 320). The most profitable industries are finance, construction, cultural and recreational services, but manufacturing industry remains the largest employer, before retail trade (ibid, 323).

Table 1. Gross Domestic Product by Industry for Different Periods
Proportion of Gross Domestic Product by industry at current prices.

Industry                                1982-83 %           1989-90 %           1994-95 % 
Agriculture, fishing                          3.6                 4.0                 2.9 
Mining                                        6.4                 4.3                 3.7 
Manufacturing                                17.8                15.2                14.6 
Power, water                                  3.7                 3.3                 3.0 
Construction                                  6.9                 7.3                 6.2 
Retail, wholesale, services                  17.1                19.7                20.3 
Transport, communication                      7.7                 7.6                 8.4 
Finance, property services                   10.6                13.6                15.2 
Government, defence                           4.5                 3.5                 3.8 
Education, health services                   10.7                 9.4                10.3 
Recreational, personal                        3.7                 3.6                 4.1 
Dwelling ownership, etc.                      8.6                 9.4                 9.5 

Source: ABS 1997, 12.1.

Economists believe that investments in education and training contribute to growth, improving the skill levels of the workforce, as well as does the discovery or depletion of natural resources (Dowrick 1997, 24). Many European and Asian economies have been able to capitalise over the past fifty years on the "advantage of backwardness"-the opportunity to catch up on the world's most advanced economies by importing or copying their products and technologies (ibid, 27). There emerges a pattern whereby rapid growth is possible for nations entering the process of industrialisation of their previously under-developed economies. In this view, the Australian growth performance has been acceptable and need not match Asian economies for success (ibid, 29). However, unless governments and firms direct more funds into appropriate equipment and infrastructure projects, strong growth is unlikely to continue (ibid, 31). Research and Development (R&D) is a determinant of technological progress and hence productivity and long-run growth, according to new economic theories (Clark et al. 1997, 64). While education, training and infrastructure are essential, R&D drives growth (Daniels 1997, 113).

R&D is one form of innovation, as the creation of new or substantially improved products, the acquisition of new technology and its use within the production process, are other forms of innovative activity (ABS 1997, 569). R&D is creative work undertaken on a systematic basis in order to increase the stock of knowledge and its use to devise new applications. There is a high correlation between the wealth of nations, in terms of GDP per capita, and R&D intensity (R&D/GDP) (Mortimer 1997, 99). In 1994-95, Australia spent 1.61% of its Gross Domestic Product on R&D, ranking slightly above Canada, but well below some leading industrialised countries such as Japan, United States, France, Finland, Germany and the United Kingdom. In terms of business enterprise R&D, Australia's level resides below all of these nations, but in terms of government effort it ranks fourth. As firms are often unable to capture the full benefits of R&D, they often under-invest, requiring governments to intervene (ibid, 99). Science and technology directly influence the strength and competitiveness of industry by providing a basis for technological change, R&D and thereby encourage economic growth and development.

This paper proposes that a greater national commitment to science, engineering, technology and innovation programs has the potential to improve Australia's economic position. However, this paper does not attempt to be an economic evaluation of any such policy outcomes, but examines broader issues relating to the basis for R&D effort in Australia.. Such an approach requires a change of thinking and a focus on the technical professions and their R&D activities. The paper outlines the role of innovation in industry, before examining direct support and policy arrangements for R&D programs both here and overseas. It then looks ahead to the use of technological assessment, before considering the role of communication in the wider public arena, as only there can support for change develop. This paper updates a previous Parliamentary Information and Research Services report on our R&D-led innovation into Asia (James 1995a). The paper notes developments since then and reviews policy arrangements existing in other nations.

Technological Innovation in Australia

Over the past decade, the ratio of business enterprise R&D to GDP has risen from about 0.34% to the 1994-95 level of 0.74% to total $3,383 million (ABS 1997, 570-3). The 1994-95 expenditure on R&D by government organisations amounted to $1,964 million, while the higher education and private non-profit sector contributed $1,973 million. Only one-third of our manufacturing industry is innovative, although this portion does dominate output (ABS 1995a,b). These are more likely to be larger businesses. While internal R&D is a significant source of innovation, there are others such as client requests, competition, input suppliers and administration. Some observers maintain that our below-average business expenditure on R&D stems from above-average levels of protection leading to low international competitiveness (Mitchell 1996, 162). However, most technological innovators in manufacturing are small businesses aiming to increase market share by improving product quality, with little resources to support R&D (ABS 1997, 588). Therefore, R&D remains as a good and accepted measure of innovation.

Australia's Innovation Record

The Department of Industry, Science and Tourism has claimed, in an ongoing series of reports, that innovation is 'the dominant factor in economic growth and patterns of world trade' (MIST 1996, 2.9; DIST 1995a,b; 1996a,b). A Parliamentary inquiry has made similar findings (HRSCIST 1995), endorsing previous Federal Government support programs. The quality of Australian innovation compares well with other nations, but occurs only in some sectors. Australia now possesses industrial R&D strengths in both the steel and metal products industries, as well as in shipbuilding and some other manufacturing (Bryant et al., 1996, xii). The R&D-intensive industries in Australia are few and without famous brand names, yet subject to very strong international competition.

Table 2 shows Australia's R&D status among a range of other nations for which data exist. Note that the table ranks nations by decreasing GERD/GDP (gross expenditure on R&D) ratio. Ranking by BERD/GDP (business expenditure) puts Australia sixth last, but ordering by PERD/GDP (public expenditure) we rank fifth. Our middle to low ranking status reflects a higher proportion of public R&D funding rather than any private support for innovation spending. The last decade has measured improvement in manufacturing productivity, output and trade orientation (Clark et al. 1996, xiii; Brown et al. 1997, 24).

Table 2. International Comparison of R&D Levels Ranked by GERD/GDP
Gross expenditure on R&D (GERD) as percentage of Gross Domestic Product (GDP), business expenditure on R&D (BERD) as a percentage of GDP, and public expenditure on R&D (PERD) as a percentage of GDP, all for 1994-5.

Country                         GERD/GDP %           PERD/GDP %           BERD/GDP %  Sweden                                3.28                 0.94                 2.31 
Switzerland                           2.68                 0.77                 1.88 
Japan                                 2.64                 0.63                 1.87 
United States                         2.53                 0.64                 1.80 
South Korea                           2.41                 0.28                 1.72 
France                                2.38                 0.87                 1.47 
Finland                               2.35                 0.89                 1.46 
Germany                               2.33                 0.79                 1.54 
United Kingdom                        2.19                 0.69                 1.43 
Netherlands                           2.05                 0.97                 1.06 
Taiwan                                1.80                 0.48                 1.03 
Denmark                               1.79                 0.73                 1.05 
Norway                                1.74                 0.81                 0.93 
Belgium                               1.65                 0.53                 1.10 
Canada                                1.62                 0.65                 0.94 
Australia                             1.61                 0.84                 0.74 
Austria                               1.53                 0.55                 0.81 
Ireland                               1.41                 0.44                 0.97 
Singapore                             1.20                 0.46                 0.75 
Italy                                 1.16                 0.51                 0.65 
New Zealand                           1.03                 0.72                 0.31 
Spain                                 0.82                 0.44                 0.37 
India                                 0.74                 0.54                 0.19 
China                                 0.49                 0.33                 0.11 

Average Overall                       1.81                 0.65                 1.10 
Average OECD                          1.94                 0.70                 1.19 

Source: MIST 1997 using Australian Bureau of Statistics, OECD and national sources.

While Australian R&D intensity in manufacturing has risen, it remains low in the medium technology sector (such as electrical machinery, motor vehicles and chemicals). Given the strong multinational corporation involvement in these sectors, this is perhaps not surprising, but there have nonetheless been some successes in car and chemical exports. R&D effort is concentrated in food processing and non-ferrous metal industries (Sheehan et al. 1995, iii). In an era of increasing globalisation, service quality, integration and cost competitiveness, our R&D focuses on software and services rather than raising hardware export levels (ibid, v-x). We remain behind most Organisation of Economic Cooperation and Development (OECD) nations of similar size in R&D intensity for manufactures and production. There are opportunities ahead though, as our strengths in environmental sciences, in biology and medical research and in software complement Asian emphasis on engineering, chemicals, and IT&T hardware (ibid, i).

The financial sector, used to supporting the property market and primary producers, has, at times, had little regard for small to medium enterprises (SMEs) attempting involvement in perceived 'risky' R&D. SMEs suggest there is little equity finance available for companies for the crucial period between early product development and the later development and commercialisation phases when the need for capital escalates. This may often occur because tolerance of R&D failure is low and investment time-lines are short term. The difficulties that SMEs perceive in obtaining equity capital may also reflect their inadequate knowledge of potential equity and investment options and imperfect marketing (Mortimer 1997, 119). Programs such as the Pooled Development Funds, the Australian Technology Group and the Small Business Innovation Fund exist to overcome these barriers.

However, a perceptive American view is relevant here. The American-based McKinsey Institute finds that, despite Australia's deregulatory transformation, the nation's relative prosperity has not improved in almost thirty years, due to poor labour productivity and high unemployment (Lewis et al. 1996, 92). In this view, Australian industries are slow to adopt innovative processes, products and services, and have modest management aspirations and limited supplier relationships. Restrictive product and labour market regulations may further inhibit development. The Institute suggests middle management improvement and the development of a culture that encourages innovation. Such an approach would extend to venture capital. Industry could perhaps pay product royalties in return for public R&D funding. However, at the global level, often only large conglomerates achieve ongoing stable success, whereas Australia's industry largely consists of SMEs. They also require more business linkages and networks (BIE 1995a) if they are to grow and help absorb the pool of skilled workers.

Table 3 demonstrates the growth in overall gross expenditure on R&D over the past decade. Australia ranks fifth in recent growth, but starts from a lower rate than fifteen other nations. Australian Government policy has focused on finding ways to encourage Australian firms to invest in their own R&D, as discussed in the next section.

Table 3. International Comparison of Gross R&D Expenditure Over Time.
Gross expenditure on R&D (GERD) as percentage of Gross Domestic Product (GDP) for two separate periods, ranked by GERD/GDP change 1988 to 1994.

Country                       GERD/GDP            GERD/GDP            GERD/GDP 
                                1995 %          change1981         change1988  
                                                 to 1988 %           to 1994 % 
South Korea                       2.41                1.22                0.58 
Ireland                           1.41                0.14                0.58 
Taiwan                            1.80                0.32                0.55 
Finland                           2.35                0.61                0.54 
Australia                         1.61                0.26                0.34 
Singapore                         1.20                0.60                0.33 
Sweden                            3.28                0.69                0.30 
Denmark                           1.79                0.40                0.30 
Canada                            1.62                0.14                0.22 
Austria                           1.53                0.18                0.18 
New Zealand                       1.03               -0.14                0.16 
France                            2.38                0.30                0.10 
Spain                             0.82                0.29                0.10 
Norway                            1.74                0.53                0.08 
Belgium                           1.65                0.02                0.03 
United Kingdom                    2.19               -0.19                0.02 
Germany                           2.33                0.43               -0.53 
United States                     2.53                0.36               -0.26 
Switzerland                       2.68                0.57               -0.20 
Netherlands                       2.05                0.37               -0.17 
China                             0.49                n.a.               -0.14 
India                             0.74                0.26               -0.11 
Italy                             1.16                0.34               -0.06 
Japan                             2.64                0.54               -0.02 

Average Overall                   1.81                0.36                0.12 
Average OECD                      1.94                0.31                0.09 

Source: MIST 1997 using Australian Bureau of Statistics, OECD and national sources.

Strategies for Innovation

Advanced Manufacturing Technology (AMT) can greatly enhance competitiveness in world markets through improved quality and productivity. AMT techniques include computer aided design and engineering; automated fabrication, machining, materials handling and assembly; sensor inspection; and communications and control equipment. Over one-third of Australian manufacturers now employ AMT, particularly in more R&D intensive industries (Bryant et al. 1996, 35), but our levels of engineering staff numbers and our technical practitioner salary rates remain low compared with OECD levels. Also, we have not performed well in linking researchers with industry (Brown et al. 1996, 25).

Some Australian manufacturing firms are innovative and can export successfully to competitive markets with demanding customers (AMC 1995, 5). Innovative firms create the need for new ideas, trawl the market for solutions and maximise the contribution of the skilled people whom they employ. SMEs require adequate sources of finance and commercial networks to support their efforts (AATSE 1995, 1,7). Creative small to medium size enterprises can particularly support growth in innovation, especially when linked to the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and university-related technology companies, finance, export promotion and government procurement organisations. At the international level, Australia can focus on creative R&D and market niches to build exports. Nation specific factors forge innovation systems so governments and industries must jointly select roles (Archibugi et al. 1997, 123-5).

The Department of Industry, Science and Tourism (DIST) functions to promote the development and maintenance of Australia's scientific and technological capabilities, while a number of other government organisations either support or carry out R&D work. Non-government organisations involved include higher education institutions, learned and professional bodies, private organisations and industry groups. The Government's current support for innovation focuses on business expenditure, technology diffusion, management improvement, venture capital and public research infrastructure. DIST, through AusIndustry, administers the tax concession for research and development scheme and the Strategic Assistance for Research and Development (START) Program. The START Program replaces the R&D Syndication Program as an assistance package for R&D. The tax concession allows companies to deduct up to 125% (150% prior to 21 August 1996) from corporate tax of eligible expenditure on R&D. Note too the Partnerships for Development and Fixed Term Arrangements schemes in the information technology and telecommunications (IT&T) sector, and the Pharmaceutical Industry Investment Program.

The 1997/98 Federal Budget provided a rise of 17.6% in assistance for manufacturing, with the largest growth for general industrial research and development funding, from $68.5 million up to $164.3 million (Treasurer 1997, 4-83). However, at the same time, expenditure has dropped for the R&D tax concession, with savings estimates of $400 million to the end of 1997/98. In one estimate, an enhanced Federal commitment to R&D support could add $40 billion per annum to GDP by 2002-3 (Sheehan et al. 1995, xxiii). In recent years, the previous R&D syndication program became a growing incentive program, with 180 syndicates registered by late 1995. A complex scheme with some monitoring deficiencies, it was in some views a successful measure (ibid, xiii). On the basis of encouraging new R&D and to counter opportunities for companies to receive unintended benefits, the Federal Government replaced the scheme in 1996 with START. It can be argued that it is not just direct budgetary support measures that will necessarily best determine industry outcomes and it may well be that more industry initiative is preferable.

The recent Review of Business Programs finds a clear case for government support for innovation, noting that GDP per capita is highly correlated to R&D intensity in developed nations (Mortimer 1997, 14). The Review believes that more focused support for the commercialisation of new technology in the manufacturing sector could improve benefits flowing from our national research effort (ibid, 56, 123). Equally, the Review claims that we need to invest more in technology importation and diffusion (ibid, 112), along with management programs. However, the Review states that it makes good economic sense to encourage business entry into the relatively risky activities of exporting and R&D to optimise the resulting benefits (ibid, 71). The Review recommends an Innovation Program containing a single rebate scheme, and support for venture capital and public research infrastructure (ibid, 102). The Review recommends simplification of the large number of innovation assistance schemes and proposes a single R&D scheme to assist all businesses. The Review also notes the requirement for R&D planning horizons to reach at least five years ahead, to suit business investment planning programs (ibid, 64). Under current arrangements, IT&T companies face a variety of possible assistance sources. The 'Mortimer' Review notes that it is possible for a firm in the IT&T sector to receive support for a single R&D activity through each of the 125% R&D Tax Concession, the Computer Bounty, the CRC scheme or through interaction with CSIRO. The Fixed Term Arrangements and Partnerships for Development schemes may also apply. The almost completed 'Goldsworthy' Information Industries Taskforce study and the 'Cutler' report by the Information Policy Advisory Council are also relevant to the IT&T sector.

CSIRO, the Australian Nuclear Science and Technology Organisation (ANSTO) and the Australian Institute for Marine Science (AIMS) form the backbone of civil public research infrastructure along with universities. Support for rural R&D is another crucial initiative. Meanwhile, the Cooperative Research Centres (CRCs) program has been successful in bringing together academic, industrial and government agencies to work on R&D projects (Tegart 1996, 168). However, some CRC with industry linkages are seen by the education sector as being too long-term for university involvement, given prevailing tertiary sector funding. With that support handled by the Department of Employment, Education and Training and Youth Affairs (DEETYA), reports arise of disharmony with DIST programs (FASTS/NTEU 1997). The next section covers matters of direct public policy for science and technology in Australia, noting the 'Stocker' review of administrative arrangements.

Science and Engineering Policy in Australia

Administrative Arrangements

One means by which Australians can influence innovation development is through science and industry policy, yet the National Commission of Audit noted a plethora of statutory and other bodies involved in advice and management of Commonwealth funded R&D. The Commission suggested that these complex arrangements were inefficient and largely unaccountable. Figures 1 and 2 show the complexity of our policy and funding system, as also discussed in a previous report in this series (James 1995a). The Commission found scope for setting national priorities within a rationalised structure (NCA 1996, 108). There is no strategic national management plan for science and technology to incorporate education, industry and social and environmental effects. In 1997, the Federal Government assigned the Chief Scientist (see Figure 1) to report on gaps and overlaps in current arrangements and recommend ways of identifying national priorities for R&D.

Australia has a necessarily highly decentralised, pluralistic system where less than half of Federal Government support for science and technology goes to its own research agencies and direct funding programs (Stocker 1997, 1). Accordingly, the Chief Scientist believes that, in defining national priorities for science and technology, the Government should articulate a preferred vision for Australia's development towards national goals in the spheres of economic and industry development, quality of the environment and social well-being (ibid, 2, 32-4). The Chief Scientist says that resource allocation can then proceed in accord with agreed priorities. In this view, industry innovation should have greater simplicity, lower compliance costs, a higher rate of incentive to invest in R&D than currently available and a broader range of innovative project activities (ibid, 4, 44).

In this 'Stocker' study, the Chief Scientist urges a study of the advantages and disadvantages to science, technology, engineering and innovation resulting from competition policy reforms. Overall, he believes that Australia requires a coherent policy advisory system which, at the highest levels, takes into account a broad range of views to provide effective advice on broad national directions and priorities (ibid, 70). In this view, the current system has weaknesses in coordination, representation and processes for setting national priorities that require more concisely specified elements for the future. This view is largely in accord with those expressed in the 'Mortimer' Review of Business Programs.

Figure 1 Science and engineering policy flows in Australia. (148K)

Source: MIST 1997

Figure 2 R&D funding flows in Australia. (153K)

Source: MIST 1997

Education, training and infrastructure appear adequate across the science and engineering sectors (BIE 1996a, xx-xxi). Examinations of Australia's scientific paper output and citations show that we make a significant contribution, ranking tenth globally in terms of contribution and third in citation rates (BIE 1996b, xi). Our patenting and publication citation rates are average but we remain a net technology importer, with a lack of exports. Our strengths and consistent quality lie in agriculture, ecology, environment, geoscience, plant and animal sciences. Our citation rates have fallen, although for mixed reasons relating to globalisation and funding (AAS 1996). Limits to potential R&D links between academics and private enterprise arise from differences in research emphasis.

Policy Strategy

The Federation of Australian Scientific and Technological Societies (FASTS) has a list of possible policy strategies. The FASTS science policy covers education, university research and training, industry, government institutions and national facilities. In education, it promotes professional teaching with national curricula, competence-based standards and accreditation. FASTS upholds the importance of university research infrastructure, ARC project funding, R&D funding and fellowships. It favours cultural change in industry through R&D incentives, venture capital for research funding, IT&T links between sectors and to SMEs. FASTS recommends national priority setting through coordinating national research institutions and industry, and science awareness programs (FASTS 1996, 21).

Such policies have the ultimate goal of an Australian society with full employment and commitment to environmental standards, waste minimisation, and wealth generation. A vision embracing quality of life and an integrated approach, given community support for the environment with sustainable growth, can enable policy change for engineering and science too. Promoting our Asian regional role in trade and infrastructure development, and closer ties between public research and industry may allow local R&D to flourish. These are wider aims than those canvassed in the Stocker report, concerned mainly with the efficiency of administrative arrangements, or the Mortimer study on business outlook.

Technology Assessment

Technology assessment refers to analysis of the barriers to the use of new technology, and to understanding the various resulting socio-economic impacts. Over the years, Australia has not developed any effective mechanisms to handle these issues (SSCSTE 1987, 80). A 1987 Senate Committee favoured assessment focused on technology impacts, to modernise our industry and society, undertaken by a range of cooperating agencies under a legislative framework. Nonetheless, competing industry, union and other interests can work against such cooperation. The Committee advocated a Technological Change Council to review trends and effects, comprising a broad range of interests, but this did not occur. There remains little national commitment to risk assessment strategies, despite production of reports such as the first State of the Environment Australia (DEST 1996). Without review, public distrust of science and technology can arise from environmental catastrophes such as the Chernobyl nuclear station leak, the Brent Spar oil threat, mad cow disease, etc.

To allow proper understanding, technical programs require openness, peer review, rigour, independence and relevance. Risk assessment is a useful technique to assess possible effects. The Danish consensus conference or American community research networks are new means of involving the public in technical decision-making, design and analysis from the start. The consensus conference provides a forum for general debate with a goal reaching a societal consensus and generating information for the political process (Todt 1997, 179). The Danish have had over a dozen such successful conferences since 1987. The newer community research networks in the United States seem to allow democratic procedures to enter the technological domain (Sclove 1997, 31), (Roush 1996, 573).

While industry performs its own technology (market) assessment, efforts to promote such techniques have faltered. Only when there has been integration of system design and social input will new technologies gain wide acceptance (Todt 1997, 178). The lag between technology development opportunities and their application to social needs and effect has not helped. To avoid social resistance to innovation, constructive technology assessment must link industry with consumers and government at national and international levels, and must not forget the need for sustainable development. Unforeseen social effects require attention by parliaments, to cover issues in an objective manner, while being cognisant of the possible effects of future change (Todt 1997, 183).

ASTEC has performed a futures forecasting study and identified the key forces destined to affect our future: global integration, application of information and communications technologies, environmental sustainability and advances in biological technology. However, international studies have also stressed the critical future importance of manufacturing-related R&D (ASTEC 1996, xiii, 2). ASTEC has some strategic principles to guide our development: integration of IT&T, use of resource accounting and some equity guidelines. The principles combine with government actions of providing strategic industry innovation advice, collecting business intelligence, evaluating government R&D capabilities, and supplying appropriate technology for developing regions (ibid, 4).

Successful technology assessment agencies exist in Germany, France, Denmark, Netherlands, Britain, and the European Parliament (Bimber et al. 1997, 130). Britain and other nations have also conducted extensive foresight studies that are the subject of further work (OECD 1996). Britain now has a Parliamentary Office of Science and Technology that joins the Parliamentary and Scientific Committee as a useful link between academia and industry. These serve as demonstrations of appropriate administrative programs.

National R&D Administrations

In creating a science and engineering led vision for Australia, analysis of the approaches of some other nations is instructive to help decide what it should be like. Overseas national priority-setting mechanisms for government research tend to have high level committees with authority and responsibility to implement results. They oversee authoritative working groups of analysts with technical credibility and consultative commitment (ASTEC 1990, xii), (Stocker 1997, 57). This section provides a brief overview of arrangements existing in some leading nations for public R&D activity and demonstrates that most industrialised nations pursue growth-orientated technology policies (Sternberg 1996, 746).

Asia

An earlier report in this series summarises policy arrangements in Asian nations (James 1995a, 32-42). It provides descriptions for New Zealand, China, Indonesia, Papua New Guinea, Philippines, Japan, Korea, Malaysia, Singapore, Brunei, Taiwan, Hong Kong, Macau, Thailand, Vietnam, Laos and Cambodia. The more strongly growing Asian nations have increasing regard to R&D in development through using flexible government policies and value-adding to technologies acquired from abroad. The transfer of R&D to multinational subsidiaries in developing nations has occurred through informal resource transfers, imitation and technical assistance and now also through direct foreign investment, joint ventures and licensing. R&D is industry-led, using market driven programs combined with modern institutions and stimulated private sectors. The more efficient Asian companies recognise the value of creative, long-term, global, quality innovation utilising flexible manufacturing, informatics and participatory management systems. Japan is legendary in this regard with its diffusion-orientated technology policy, and some of its neighbours now follow its example (Sternberg 1996, 747).

Japan has a pluralist system, with the Council for Science and Technology (part of the Prime Minister's Office) establishing national guidelines for R&D, while policies for designated fields are set by other specialist councils (Stocker 1997, 60). The council has special coordination funds for promoting science and technology to handle innovative cross-disciplinary programs. The National Science and Technology Agency provides overall coordination, except for limited academic research undertaken by other agencies. The agency supports R&D across fields and plans and coordinates national activities.

Western Europe

In Austria, the Ministry of Science, Research and the Arts coordinates national policy with the Austrian Research Council and the Austrian Science Foundation having a role to play. The nation has a large number of research institutes and national establishments for R&D.

In the United Kingdom, science policy had long existed in an ad hoc manner, emerging from a network of many committees and advisory groups, but now reporting to the Office of Science and Technology located in the Department of Trade and Industry. The Chief Scientific Adviser and head of the Office also brief the Prime Minister. The department and office fund six research councils and their various R&D programs, while the Department of Education and Employment supports university R&D. The research councils have no clear Australian equivalent, although together they perform in the manner of CSIRO. Also, Britain spends a large amount on R&D through the Ministry of Defence, whose technology policy, however, mostly concentrates on specific sectors. The Parliamentary Office of Science and Engineering analyses and informs on issues (consult the Office's Internet site at http://www.parliament.uk/post/bp.htm for details).

In France, centralised R&D planning relies on research agencies, but the Ministry of Research and Technology plays the main role in national direction-setting. It works with the supreme advisory committee on R&D, comprising wide representation, and the Office of Science and Technology (ASTEC 1990, 34). Other ministries support academia and the National Centre for Scientific Research. The Ministry for Industry supports the Strategic Industry Office and the Strategic Technology Office. Technical policy has a more central focus than here, with R&D funding split among industry, government and defence.

In Germany, the Federal Ministry for Research and Technology is the main R&D spender, with institutional support diffused among national laboratories (Sternberg 1996, 746). The Fraunhofer Society performs applied research through contracts with industry and government. The Federal Ministry for Education and Science has a separate policy role.

In Italy, a national small firms network and a core R&D system facilitate innovation. The Italian National Research Council has a wide range of activities distributed among many university centres and national institutes. Other national agencies report to different ministries, showing some similarity to the Australian system of science administration.

In the Netherlands, the Ministry of Education, Culture and Science coordinates policy. The Royal Netherlands Academy of Sciences also plays a role in serving a number of societies. The Netherlands Organisation for Applied Scientific Research and various research institutes cover many activities, in much the same way as does Australia's CSIRO.

In Switzerland, the Federal Office of Education and Science is under the Department of Home Affairs. Together with the Swiss National Science Foundation, it coordinates a range of research institutions. However, much Swiss R&D occurs in industry, especially in the chemicals sector. This is in contrast to Australia's situation, save for our CRCs.

In Finland, the Ministerial Council of State has, as an adjunct, the Science and Technology Policy Council that oversees policy and strategy as the government's principal advisory committee reporting to the Prime Minister. The Council provides broad policy guidelines for research funding allocations. The Ministry of Education allocates funds to universities through an academy (like Australia's ARC) and seven research councils (akin to CSIRO). Under the Ministry of Trade and Industry are the Technology Development Centre (like our CRCs) and the Technical Research Centre of Finland (no Australian counterpart). The Finnish National Fund supports R&D for high-risk fields of industry.

In Norway, the Science Policy Council frames national R&D policy, reporting to Cabinet together with interdepartmental research committees (ibid, 39). Cabinet oversees ministries with research councils, institutes and universities through a consensus process. The Ministry of Industries oversees the Royal Norwegian Council for Scientific and Industrial Research which supports strategic research. Our policy arrangements are somewhat similar, although Norway, unlike Australia, achieves a high level of consensus.

In Sweden's system, universities undertake most mission-orientated research along with cooperative industry institutes. Both universities and research councils report to the Ministry of Education and Cultural Affairs. With other ministries, they in turn report to Cabinet which has a Research Advisory Board (ibid, 49). The board has high-level, professional members to provide informal advice to the Prime Minister. The board also receives from the National Board for Technical Development and the National Research Council reports that examine foreign and international trends and developments.

Denmark has recently moved to create an independent advisory Danish Council for Research Policy along with various advisory boards. It has a separate Ministry of Research and Information Technology (Stocker 1997, 61). The Danish Board of Technology is a parliamentary agency charged with technology assessment. The Danes are known for establishing the 'consensus conference' that gives ordinary citizens a chance to make their voices heard in debates on technology policy (Sclove 1997, 25). Since 1987, the Board of Technology has organised over a dozen successful consensus conferences on topics of social concern, often involving ethical issues, disputed claims and policy.

North America

In Canada's pluralist and federal system, the National Research Council serves as a counterpart to our CSIRO. The Council reports to the Ministry of Industry, Science and Technology Canada along with the Science Council of Canada, a body similar to ASTEC. The Advisory Council on Science and Technology advises the Prime Minister on overall guidelines for federal R&D (Canada 1996, 15). The advisory council bridges the gap between federal government and provinces through a series of consensus seeking workshops and consultative fora, unlike here. University R&D is also a significant sector.

In the United States of America, a vast array of industry, university and government agencies constitute R&D activity through a diverse range of well-funded programs. Direct research obligations come through the Departments of Health, Defense, and Energy, the National Science Foundation, the National Aeronautics and Space Administration, universities and industry. The Assistant to the President for Science and Technology serves as chief adviser, with a cabinet level National Science and Technology Council. The size and arrangement of United States R&D commitments make any comparisons with Australia's situation difficult, especially as the greatest funding goes to defence purposes. As well, the large proportion of R&D performed by industry contrasts strongly with the Australian case. The vast American corporate sector has managed without much technical policy. The United States Congress abolished the Office of Technology Assessment (OTA) in 1996 apparently judging that the OTA's later studies and reports were of decreasing relevance to policy issues. Another view contends that it was a victim of budget stringency and partisan politics (Bimber et al. 1997, 127). Alternative avenues of using small public policy institutes or consultants are under review.

Summary

The more successful arrangements for administration of science and technology led R&D appear to strengthen links between the public and private sectors (Sternberg 1996, 746). Most governments have institutions to provide firm mechanisms for advice, decision making and coordination to enhance industry development and wealth generation. A combined representative and independent council is a common central mechanism. Most OECD nations have well-established technical governance infrastructures linking finance, business, government and academic institutions to achieve these goals. Formal science, engineering and technology advisory mechanisms are an important component of national innovation systems, according to our Chief Scientist (Stocker 1997, 57, 62).

The 'Stocker' study proposes that ASTEC become a standing committee of the Prime Minister's Science and Engineering Council, which, in turn, should take a strategic overview of the key issues in Australian science and technology. The proposal is also that a Cabinet Committee have responsibility for science and technology matters. Australia's limited R&D resources require a cooperative, coordinated and networked approach to succeed (Stocker 1997, 4). Stocker's plea for a national vision and appropriate policies seems to be in line with the stronger overseas arrangements discussed above.

A Technical Policy Agenda

Better coordination between the public and private sectors is also a matter covered by the 'Mortimer' Review of Business Programs, which covers a wider agenda than the 'Stocker' report on administrative arrangements. While also concerned with setting a national vision for growth, exports and investment, Mortimer highlights the need to coalesce assistance programs for R&D and innovation. However, he does not appear to recognise the separate roles of science, engineering, technology and innovation and their support for growth. This paper can therefore propose some other ideas to stimulate debate on wider issues.

This report has taken a broader view of the technological sector and its contribution to our nation's output. If it is the role for government to design appropriate scientific, industrial, innovative and technological policies for Australia, to ensure full employment, environmental care, sustainable growth and an effective regional role in our major markets, then the following could be some wider strategies for consideration.

  • A national technology policy as a strategic management plan involving all sectors. Such an explicit policy does not currently exist.
  • Advanced manufacturing technology support programs with national engineering centres, to expand on the several existing centres.
  • An industry royalty payment scheme in return for public R&D funding and procurements as a new initiative.
  • Science and engineering programs to feature ethics, networks, linkages and management to a much greater level than at present.
  • Financial sector clear commitment to SME equity support for R&D and commercial networks on a continuing basis.
  • Maintenance of a program of R&D through industry and ARC/CRCs on a consistent, monitored, funding basis.
  • Industry clustering concepts to foster local and regional capability, along with incentives for R&D among cluster member companies.
  • Management training to focus on commercial concepts, innovation, R&D and IT&T use and improve upon current standards.
  • Risk assessment strategy to identify sustainable industries to serve global market niches.
  • Encouragement of more skill and understanding from primary to tertiary level in the education sector.
  • Technology assessment undertaken by cooperating agencies with public input and action.
  • A science communication program to stress creativity, and engage the community and multimedia.
  • National research institutions, academia, public and industry to strengthen linkages.
  • A National Science Council to act as a peak body for academies, education sector and professional societies.
  • A Parliamentary Office of Science and Engineering created to analyse and inform on issues.

The technical academies, FASTS and education groups could combine together as a National Science Council to examine such issues and report to government. The bottom line is one of political will and public support of science and engineering to make the community aware of the social, economic and environmental benefits of R&D in our lives. The bottom line is also one of attitudes to science and technology in our society and their importance in creating the best framework for an optimum R&D culture in Australia. This is the subject of a postscript to the paper.

Postscript

Science, Technology, Engineering and Society

Australians have an interest in science and technology as demonstrated by survey data and actions such as museum visits. We tend to take a favourable view of scientific output and careers, compared to people in other Western nations, and have an above average basic scientific knowledge (BIE 1995b, vii) - consider the wide, unquestioning public take-up of mobile phones or video recorders, for example. This finding is counter-intuitive and begs the question as to why the nation as a whole has not, generally, supported research and development (R&D). Public ambivalence and contradiction in expectations of technology outcomes are reflected in our learning, attitudes and information. Current 'anti-science' reflects a public trend away from oversold science and technology (James 1995b), with implications of eg., social disempowerment, anti-materialism and anti-nuclear philosophies. Australia's public may perceive industrial and government R&D as providing the community with no more time for leisure just either harder work or unemployment. Instead, our society treasures creative artistic pursuits and sports - with little appreciation shown for the technical professions.

Engineering and science education remain isolated from the arts, humanities and the social sciences both in terms of scholarly knowledge and physical separation, as a result of British traditions. Technical culture, jargon, professional attitudes and approaches differ remarkably, yet technology is a social process with inputs, outputs, production enterprises and webs of communication. It has joined religion, tradition and family as prime cultural influences, for better or for worse (Wenk 1996, 14). However, technologists have usually avoided direct involvement in such socio-political systems, though a true engineering profession may involve full interaction with human values, law and government in serving the public interest. This requires a change in attitudes and ethics, as engineers may have lost their public identity, subsumed in faceless multi-national corporations or consultancies that serve business, not the public (Opdahl 1996, 15). Society reflects on the alienation of new technology yet the opportunity exists to enthuse the public, reflecting on the human interest side and economic value of new discoveries. The bottom line is dollars for science to benefit the environment and society, and not burdening creativity by bureaucracy and control.

Communicating Science and Technology to the Public

There are four main reasons for communicating science and technology to the public (POST 1996, 21). The first argument is cultural and concerns the development of science as a major human endeavour that should be celebrated. The next is a democratic, civic reason: without some scientific knowledge, the electorate would be unable to influence in a rational way decisions affecting their lives. The third, a practical economic theme, involves investors and politicians needing to understand technical matters to make the right decisions to increase corporate earning, employment and national prosperity. The final hypothesis is social and says that science shapes everything we do, so if people are not to be at a practical disadvantage they need to know something about it. Under these arguments lie issues of education, health, environment, safety and 'infotainment'. There remain potential difficulties for the interested public, recognising that uncertainty and debate are part of the discovery process (POST 1995, 34). This shows the importance for institutions to develop trust with the public and have plans to apply if their projects fail.

Other governments recognise the value of science communication (OECD 1997, 4). In Britain, the importance of public understanding of science for a technologically advanced industrial nation has been recognised in many parliamentary inquiries (POST 1995, 34). Surveys show that the British are more distrustful of science than other Europeans (POST 1995, 31), despite their industrial revolution heritage. The American public continues to hold science in respect, with three-quarters of those surveyed believing that the benefits of scientific and technological programs outweigh harmful effects (Nature 1996).

Meanwhile, Australia's young people perceive science and technology benefits and problems as equal, according to a study by the Australian Science, Technology and Engineering Council (ASTEC) (Vines 1996, 212). This study finds an increased role for government in promoting a wider awareness of how science and engineering can contribute to solving real problems facing Australia in social and environmental areas. Of interest is that a comparative science quiz across Organisation for Economic Cooperation and Development (OECD) nations finds that Australians score first (ibid, 213). However, while Australians may understand and adopt technology enthusiastically, and have a scientifically-skilled work force, we retain a low awareness of the role of science and technology in economic and social development (DIST 1996b, 2). Our image of scientists and engineers appears to be one of nerds in white coats and wimps, unable or unwilling to communicate with the public.

Other cultures view science somewhat differently. The Third World has little scientific research or World Bank support for it and so tends to have a 'gee-whiz' view. Overall, there remains a common problem of scientific literacy in all cultures. Perhaps this reflects the difference between science, concerned with universality, objectivity and predicability, and communication, involved with understanding, meaning and sharing (Sless & Wiseman 1996, viii). Reconciling these requires careful effort and communication (Wiseman 1996).

Science Communication Methods

It appears that the amount of science reporting in the media is falling, while media apathy is rising. Besides government-sponsored media such as the ABC, there is in general poor media coverage of technical issues, reflecting the poor levels of science communication. Articles or programs about science are few and far between in most media outlets, despite surveyed demand. Surveys suggest public interest in science matters, in contrast to media alignment with advertiser interests, that often favour sports and drama content instead. Public attention spans are very low, so media presentations need relevance to command attention. Scientific concepts must be intelligent, plausible and fruitful in order to relate to the public. The most effective presentations demand social interaction, offer multiple styles, and focus on the process of science, not just the facts. More successful promotions stress the human, community side of technology combining intrigue, involvement and interest to enthuse people as 'science is in everything'. Notable examples include the Beyond 2000 and Quantum television series and the long-running ABC Radio National Science Show. All now appear to face dwindling corporate support, perhaps because they have been unquestioning of the benefits of technological progress, even though notable overseas exposure of these programs continues.

The growth of the new 'National Science Week' program, the advent of specific university science communication courses and the popularity of the public science centres and 'hands-on' museums suggest the strengths of a concerted approach. Various interest groups, professional societies and training programs combine media resources, research databases, seminars and science shops to better convey science and technology to society. They utilise the evolving communicating methods of print, telecommunications, visual media, information storage, computer systems, multimedia and so on to influence and change society. Science communicators may also do well to seek local government interest and support. The value of the Internet, in terms of its possible entertainment and education use, is relevant here. Above all, though, plain English language communication is vital.

The education sector can play a key role in the process. Reform of education resources and curricula may help lead to a society that can better evaluate technical issues. Teacher support for science may encourage youngsters to consider related futures; but confident, articulate role models are still needed. Changing engineering curricula towards recognising current socio-cultural aspects and a humanitarian paradigm can also assist in the long run. Too often, in the past, technical education has neglected social skills. Yet successful communication and meaning arise from personal interactions, with links to careers, the economy and industry experience. The image of an impersonal, old-fashioned, male-dominated technical profession has not been very appealing to many women and they have had to contend with poor career paths and discrimination. Finally, Australia is yet to adopt prototype national science and technology curricula, despite efforts to that end. Perhaps the divisions of responsibility shared between the Commonwealth and State departments of education do not assist formulation of agreed curricula.

A Technological Culture

However, more disturbing trends exist in the education sector (Nolch 1997), (FASTS/NTEU 1997). There is continuing difficulty in recruiting suitably qualified science teachers in a context of mediocre careers and rewards compared to some other countries, and poor morale. Reports suggest poor support for creative young academics and support staff, especially in Australian Research Council (ARC) funding, in which 80% of applicants lose out. Privately funded research is confined to corporations, discouraging wider academic debate. Yet our 2% of the world's scientists must attempt to understand the 98% of research produced elsewhere. We may need to focus on such work to make the best links with overseas markets. Reports suggest that funding changes have inhibited student enrolments in higher fee courses such as engineering and have lowered entrance standards. According to ASTEC, training for information technology is also an issue under review (ASTEC, 1995). Primary schools are failing to provide scientific and technological literacy (ASTEC 1997). Issues such as these require action lest technical education falters.

Public education will lead to further questioning of science and engineering activities which professionals must be ready to address. Scientists who have involved themselves in communication with the public, such as the well-known, late astronomer Dr Carl Sagan, have often been subjected to peer review criticism, reflecting an intellectual elitism in science. The lofty preserve of scientific knowledge has often begotten arrogance and exclusivity. While science requires dedication and inspiration to observe, review and report in an accurate and ethical manner to all, equally, technical professionals must become more willing to use the media and learn to self-promote. Research by interest-based groups, open research programs and ethics consensus review with the public are valid opportunities for wider social involvement in technological studies.

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Glossary

AAS
Australian Academy of Science
AATSE
Australian Academy of Technological Science and Engineering
ABS
Australian Bureau of Statistics
AIMS
Australian Institute for Marine
AMT
advanced manufacturing technology
ANSTO
Australian Nuclear Science and Technology Organisation
ARC
Australian Research Council
ASTEC
Australian Science, Technology and Engineering Council
BIE
Bureau of Industry Economics
CRC
Cooperative Research Centres
CSIRO
Commonwealth Scientific and Industrial Research Organisation
DEETYA
Department of Employment, Education, Training and Youth Affairs
DEST
Department of the Environment, Sport and Territories
DIST
Department of Industry, Science and Tourism
FASTS
Federation of Australian Scientific and Technological Societies
ETMs
Elaborately Transformed Manufactures
GDP
gross domestic product
GERD
gross expenditure on research and development
HRSCIST
House of Representatives Standing Committee on Industry, Science and Technology
IT&T
information technology and telecommunications
MIST
Minister for Science and Technology
NCA
National Commission of Audit
OECD
Organisation of Economic Cooperation and Development
POST
Parliamentary Office of Science and Technology
R&D
research and development
SETI
science, engineering, technology and innovation
SMEs
small to medium enterprises
SSCSTE
Senate Standing Committee on Science, Technology and the Environment
 

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