Executive summary
Innovation is critical in developing new avenues for economic growth and prosperity for Australia.
Innovation can take many different forms and is consequently used and produced by many
different businesses.
In 2013-14, the manufacturing sector accounted for 6.4 per cent of Australian gross domestic
product and 25.7 per cent of Australia’s research and development (R&D) expenditure.1 There is
currently an array of diverse business models and government policies that aim to encourage and
improve innovation for growth now and into the future.
In recent years, the emergence and growing importance of advanced manufacturing has been a
critical part of Australia’s innovation system and economy.2
It is more challenging to define than conventional manufacturing, as it involves not only new ways to manufacture existing products and the manufacture of new products from emerging advanced technologies, but also it denotes the process by which knowledge-intensive value is added in both the pre- and post‑production phase including R&D and distribution. Advanced manufacturing embraces specialised technology from medical devices and pharmaceuticals to precision engineering and electronics. The growing impact of advanced manufacturing makes it important to have a better understanding of its activities.
This report analyses Australian advanced manufacturing through the lens of intellectual property.
This report uses the scale and intensity of patent activity to provide an overview of an important
part of the Australian innovation system.
The study identified 22 265 Patent Cooperation Treaty (PCT) applications related to advanced
manufacturing that originated in Australia between 2000 and 2013. Australia ranked fourteenth in
applications globally, which is comparable to Israel and Finland. This should be viewed positively
given Australia’s fifty-third ranking in population. The growth in Australian PCT applications was 15 per cent (203 PCT applications) over 14 years, which is much lower when compared with the steep
growth of the rest of the world. There were 180 thousand PCT applications globally in 2013 which
is a 102 per cent increase from 2000. Each of the individual Australian technology sectors also
grew much less than its global counterpart.
When comparing the individual technology sectors, the electrical sector, which includes
communication and measurement technologies and electrical components, had the largest number
of applications originating in Australia and globally. This sector was a major focus and accounted
for 43 per cent of global PCT applications and 32 per cent of Australian PCT applications.
Following the electrical sector, the next largest numbers of applications were found in mechanical
engineering, pharmaceuticals and medical devices. This was the same in Australia and globally.
The major difference was that Australia had a strong chemical engineering presence due to mining
technologies, ranking fifth of eight sectors. Globally this sector was eighth.
To identify if Australia has technological specialisations in the eight advanced manufacturing
categories compared to other countries the Relative Specialisation Index (RSI) was used. The RSI
normalises the patenting activity of each technology to identify areas of technological strength that may otherwise go unnoticed. The medical devices sector had the highest comparative ranking
(tenth globally), followed by chemical engineering (thirteenth) and transport (fifteenth). This shows Australia’s strength in these areas.
Research organisations such as CSIRO, universities and medical research institutes were the
major applicants overall, accounting for 10 of the top 15 applicants. They were also prominent in
six of the eight technology sectors, having less of a focus on mechanical engineering and
transport. Major corporate applicants included medical technology companies Cochlear and
ResMed, along with BlueScope Steel and Rio Tinto. They accounted for 10 of the top 15 Australian
advanced manufacturing applicants and were prominent in six technology sectors. Research
institutions had the highest application numbers.
In this study we used multiple applicants as a proxy for collaboration. The proportion of
applications involving collaborations varies with applicant type. Across the advanced
manufacturing technologies overall, 20 per cent of applications from Australian research
institutions are collaborative efforts, followed by large Australian firms at 15 per cent and
international entities at 13 per cent. This proportion drops to less than five per cent when small-tomedium enterprises (SMEs) are involved. The results for individual technology sectors were
similar; where research institutions collaborated most in seven of the eight technology sectors,
while SMEs collaborated least across all sectors.
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