Business Expenditure on Research & Development (R&D) grew by 18 per cent to $24.4 billion in 2023-24, according to new data released today by the Australian Bureau of Statistics (ABS). 

Robert Ewing, ABS head of business statistics, said: ‘The strongest growth in R&D was seen in the Information and computing sciences research field. This includes spending on Artificial Intelligence, or AI, which grew by 142 per cent since 2021-2022. 

‘Businesses more than doubled their investment, putting $668.3 million into AI R&D in 2023-24, compared to $276.3 million in 2021-22. This shows how rapidly Australian firms have begun investing in AI.

‘But it was Software engineering that made the largest contribution to the Information and computing sciences research field. This category grew by 26 per cent to $4.9 billion.’

The Professional, scientific and technical services industry made up 38 per cent of R&D expenditure in 2023-24, totalling $9.2 billion. 

This was followed by the Manufacturing industry at 21 per cent, or $5.0 billion. The Financial and insurance services industry was third highest at 14 per cent, or $3.5 billion.  

Business spending on R&D kept pace with the growth of the overall economy, remaining at 0.9 per cent of GDP for 2023-24. 

Today’s figures also showed business R&D spending by its intended purpose or outcome, known as Socio-Economic Objective (SEO). Understanding the SEO categories is important for R&D policy and planning. Information and communication services, Manufacturing, and Health make up 58 per cent of total R&D business expenditure by SEO. 

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R&D spending on Information and communication services is now the leading SEO in Australia, overtaking Manufacturing,’ Mr Ewing said. 

‘Growth in Information and communication services was up 50 per cent to $5.9 billion. Manufacturing dropped 3 per cent to $4.6 billion, continuing a downward trend since 2019-20.’

Today’s release gives governments and researchers information about the level and nature of business spending on R&D. This helps inform policy and strategy decisions to support businesses to improve research outcomes.