The Cooperative Research Program: Is it Time for a Review?

Abstract

Traditional growth theories have been unable to satisfactorily explain various economic events. New growth theories appear to provide a more satisfactory basis for explaining the relationship between various factors and economic growth. However, there is not sound empirical evidence to support the claims of the new growth theorists. Although the empirical evidence to support new growth theories is not strong, there is a school of thought that insufficient emphasis on business expenditure on research and development (BERD) will restrict growth prospects. A significant feature of R&D activity in Australia is that the major part of effort is directed towards the early stages of R&D, rather than the later stages, which are more closely linked with commercialisation. Government agencies and universities perform around 60 per cent of Australia's R&D and about 85 per cent of this is concentrated in the research stage, rather than the development stage. As a result of this situation basic research dominates research effort by a ratio of 2:1. A government initiative that has been put in place to address this issue is the Cooperative Research Centres (CRC) Program. The paper provides an overview of the program to date and discusses some empirical evidence from CRCs, which have headquarters in NSW, or substantial research activity in the State. There is evidence presented to support the case for a review of the program, especially where there is good commercialisation prospects for the R&D but no significant evidence of spillovers occurring to other agents.