Australia¡¯s universities said that a downbeat assessment by the nation¡¯s productivity watchdog demonstrated the need for the government to uncap higher education funding, and for more businesses to start ¡°tapping into the university brains trust¡±.

Universities Australia said its members were the antidote to a ¡°troubling¡± slowdown highlighted in the latest?, a report card compiled more or less annually by the Productivity Commission.

The report shows that investment in research and development fell last financial year, reversing a slight gain registered the previous year following a three-year slump. Spending has declined to around 13 per cent below a 2012 peak and is only about 4 per cent above 2006 investment levels, the report suggests. ?

¡°This slowdown is troubling for the nation¡¯s economic growth,¡± said Universities Australia chief executive Catriona Jackson. ¡°As the Productivity Commission notes, private sector R&D investment is often in new technologies, which complement skill development and innovation in the labour force.

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¡°We urge businesses to take a closer look at what our university system can do to help your firm innovate and grow. Researchers and experts in our nation¡¯s universities can help businesses maximise returns from their R&D investment.¡±

Ms Jackson cited Universities Australia-commissioned??released last year, which suggested that university-business collaborations generated a 450 per cent return on investment. The modelling found that the 16,000 Australian businesses in formal partnerships with universities had earned A$10.6 billion (?5.8 billion) through these relationships.

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The Productivity Commission report, released on the same day that Australia¡¯s Reserve Bank cut interest rates to a historic low of 1.25 per cent, says that the share of businesses that are innovators ¡°is no longer growing¡±. It says Australia has relatively high productivity, and slowdowns have been ¡°more persistent and extreme in many other countries¡±. Nevertheless, Australia¡¯s levels ¡°remain below the best performers¡±.

It blames mediocre investment for a labour productivity rate well below the ¡°long-run trend¡±. Ms Jackson said this underlined the need to remove the cap on funding for student places at universities ¨C something most commentators think is highly unlikely following the Coalition government¡¯s May election win.

¡°Educational attainment plays an important role in driving productivity growth,¡± Ms Jackson said. ¡°Universities need flexibility and funding to deliver our skilled graduate workforce.¡±

john.ross@timeshighereducation.com