Key Findings from the Economic Impact Assessment of the CRC Programme 13 December 2005

2 First a thanks and an apology… Thanks to everyone for providing so much input for the study. Your efforts in the short time available were much appreciated. Apologies to those whose material didn’t make its way into the case studies in the report - this was simply a product of the need to keep the report length manageable for the target audience.

3 Key findings from the study This study is unique in that it measures only the quantified and verified (by end users) delivered net benefits of a major Government R&D funding program in Australia. Even with the exclusion of a number of significant but unquantifiable benefits generated by the CRC Programme, the study shows that the CRC Programme has delivered a clear net economic benefit for Australia. There are significant lead times involved between the establishment of a CRC and the delivery of measurable economic impacts. Over time the CRC Programme’s performance, especially in relation to industry engagement, has been improving and the pipeline of future potential benefits from the CRC Programme looks strong.

4 Even with the strict inclusion criteria used in the study, the CRC Programme is shown to have delivered a clear net economic benefit to Australia $1 allocated to general Government expenditure $X of GDP $Y of Real consumption $Z Real Investment $1 instead allocated to the CRC Programme $X + 60c of GDP $Y + 40c of Real consumption $Z + 22c of Real Investment Benefits have primarily been delivered through the application of research by industry to reduce costs and increase productivity and through the sale of new products (by existing or new companies) that are based on CRC research.

5 The time lag between the commencement of a CRC and the achievement of a quantifiable economic impact is considerable

6 Over time the CRC Programme’s performance, especially in relation to industry engagement, has been improving Industry researchers participating in CRCs: 1992 to 2005 Industry contribution to R&D expenditure in CRCs and Universities: 1992 to 2005 % CRCs Universities Source: DEST Science and Innovation data and data collected through survey of past and present CRCs * * Spike due to a high level of industry investment in the Australia Photonics CRC relating to the establishment of a number of spin-off companies.

7 Impact in the area of postgraduate student training is also strong The number of postgraduate students involved in CRCs has risen steadily over the life of the Programme There is evidence of positive outcomes associated with the CRC training environment, including: Higher student satisfaction with faculty quality Higher student satisfaction with equipment quality More positive views of career prospects A stronger interest in pursuing a research career in industry More investigation into student outcomes would help build the case for the Programme even further.

8 The study has several implications for the future of the CRC Programme The Programme is meeting “third stream” objectives and the prima facie case for its continuation is clear. The Programme’s performance appears to be improving over time with the majority of benefits from past investment still to be delivered. To improve Programme evaluation in the future, there needs to be a stronger focus on tracking of final outcomes achieved by CRCs. This is a particularly difficult challenge for CRCs where the benefits are widely diffused.

9 Implications for R&D impact assessment more broadly Given the long lead times to the generation of delivered benefits, many R&D funding program reviews will continue to rely on making forward estimates of likely benefits that are based on consideration of early outcome indicators. Issues that CRC applications should address in the forward looking economic impact statements that accompany their applications include: The opportunity cost associated with investment into the project. The extent to which a final economic benefit will be attributable to a project. The costs incurred by end users in adopting or applying research. The time lags involved between commencement of research and achievement of a final economic benefit. The plausible quantification of future benefits that may be delivered. The risk that a project will not succeed in delivering some or all of its intended outcomes. The conversion of future economic impacts to net present value terms.