The significant contribution of science to Australia’s economy has been measured for the first time in a landmark report that warns economic growth could fall dramatically without strong commitment to the sector.
The report, commissioned by Australia’s Chief Scientist and the country’s leading scientific academy, shows advanced sciences contribute more than $145 billion directly to the economy every year, roughly 11 per cent of GDP, and employ more than 760,000 people.
The Centre for International Economics analysis, the first of its kind in Australia, has also calculated science’s indirect contribution to be almost $300 billion a year, more than 22 per of GDP.
Professor Ian Chubb and the Australian Academy of Science commissioned the report because the contribution of science to economic activity was easy to take for granted, yet economic growth would suffer without continued scientific development.
“Because science is so important to every modern economy, we easily adjust our expectations and, paradoxically, the role of science becomes invisible to us,” the report warns.
“The aim [of this report is] to provide a timely reminder of how much of our national economic activity depends on the advanced physical and mathematical sciences.”
The findings send a clear warning to the federal government against further cuts to science and research in its next budget, due in May.
Last year the government cut research spending by more than $400 million, resulting in close to 500 scientists losing their jobs.
Earlier this month, a political stalemate threatened to close the country’s major research facilities when the Senate failed to pass the government’s higher education changes. Only after consistent pleas from the research community did Education Minister Christopher Pyne “decouple” the funding for research infrastructure, which is used by more than 30,000 scientists, from university reform.
The report explains that ‘new’ knowledge is “the dominant factor driving economic growth” over the long term in developed countries.
It warns: “Without ongoing increases in human knowledge, including technical progress, any of the other factors driving economic growth will eventually encounter diminishing returns, and growth will slow.
“A future without continued scientific development would involve lower economic growth simply because the proportion of growth that would otherwise come from growth in knowledge would be reduced.”
Without “strong local commitment” to science it would not be possible to translate scientific developments into economic gains for Australia, the report warns.
CIE’s analysis shows the impact of the sciences on Australian trade is also significant.
Exports that use knowledge from these areas are worth about $74 billion a year and represent roughly 28 per cent of Australia’s goods exports.
The CIE measured the economic contribution of scientific knowledge by estimating how the advanced sciences – physics, chemistry, earth sciences and mathematics – help each industry in Australia to reduce costs, boost productivity, make savings and increase consumption.
It did so with advice from scientists and industry to determine the importance of these sciences to every industry. It found scientific developments contribute more to some industries than others.
For sophisticated industries such as oil and gas extraction, it estimates scientific knowledge contributes roughly 50 per cent of the total gross value added.
But CIE said the report, titled The Importance of Advanced Physical and Mathematical Sciences to the Australian Economy, likely underestimated the total contribution of these sciences to the economy because it did not take into account the economic contribution of new products that save resources or improve safety and health.
Further studies will measure the economic contribution of biology and other life sciences to the economy.
Read further at The Age.