Chipmaker Nvidia’s breakneck growth is yet another “massive missed opportunity” and a reminder of the failures of an Australian R&D and advanced manufacturing ecosystem that, one science leader has warned, “urgently needs bold investment in ideas and innovation.”
That particular opportunity, president of Science and Technology Australia (STA) Professor Sharath Sriram told the National Press Club, came 25 years ago when the Victorian Government invested millions in a Chip Skills program designed to build a domestic industry for microprocessor design.
With the support of RMIT University – where Sriram leads the Functional Materials and Microsystems Research Group – and international partners in Korea, Japan, Germany and elsewhere, the program grew from 30 students to over 200 per year and was poised to make Melbourne a world leader in chip development.
Yet despite government rhetoric and industry hopes, Australia – which was caught in the death throes of domestic computer manufacturing – failed to back its skills investment with domestic chip manufacturing capabilities.
The engineers it trained were lured offshore by international partners, who backed out of Australia within a decade – turning instead to more progressive countries where billions in early investment have fostered thriving semiconductor ecosystems that have become national industrial and economic assets.
The recent explosion in value of Nvidia – the American chipmaker whose shares have more than doubled since January as it barnstorms the emerging market for infrastructure to enable compute-heavy artificial intelligence (AI) systems – highlights just how badly Australia squandered what Sriram called a “massive missed opportunity”.
“Microchips are at the heart of every advance our country is prioritising and investing in”, he said, “including quantum computing, AI, digital health, advanced manufacturing, and clean energy.”
Noting OpenAI’s plan to raise $US7 trillion for AI chip manufacturing, India’s recent approval of three new semiconductor facilities worth $23 billion (US$15.2 billion) and Singapore’s announcement this month that it will invest $1.13 billion (S$1 billion) in AI infrastructure over five years as it seeks to become the Silicon Valley of Asia – Srirath said “this is what Australia has missed out on.”
“Imagine what we could have been doing if we were making microchips here and supplying the world.”
Australian innovators jumping ship
Sriram joins a chorus of academics, business, research and technology leaders who believe Australia has consistently mismanaged its R&D spending and priorities – underfunding growth areas, reversing investments made by earlier governments, and avoiding the long-term commitments necessary to thrive in fiercely competitive global markets.
With many policies focused on building skills pipelines and letting the industry take care of the rest –the new National AI Centre, for example, has been criticised for the government’s minimal investment – entrepreneurs continue to abandon Australia, with Canva’s founders recently saying they will list on US sharemarkets because Australian investors “don’t understand tech as well.”
It's a story that Sriram – a research translation expert who specialises in finding commercial applications for fundamental research discoveries in fields such as electronics, communications, and biomedicine – has heard time and again.
He cited the example of Melbourne innovator Sleeptite – which worked with RMIT University to develop printable sensors that could be embedded into rubber, and attached to sheets to monitor aged care residents – as yet another victim of Australia’s misaligned research and manufacturing priorities.
While Melbourne researchers spent over two years advancing their technology from concept to product, Sriram said, when it came time to manufacture Sleeptite prototypes, the company had no choice but to look overseas.
“There was a lack of prototyping facilities locally,” he said, so “we had to send it overseas and risked valuable intellectual property by sharing it – and it was not a secret anymore.”
With Australia’s R&D spend just 1.68 per cent of GDP – barely half the OECD average of 2.7 per cent and “a country mile” behind “top performers” like South Korea (4.9 per cent) and the US (3.5 per cent) – Sriram said “we cannot escape the fact that woefully low investment in R&D is holding our country back, leading to our best ideas going overseas to our international competitors.”
Noting that our undiversified economy is still based on digging demand-sensitive commodities out of the ground, Sriram echoed recurring industry concerns that despite being the world’s ninth richest country, lack of ambition, and inadequate investment vision had left Australia’s economy ranked 93 out of 133 countries – becoming “less complex” over the past decade as other countries leaped ahead.
While many countries “realised the value of science” through the COVID-19 pandemic and invested in sovereign capabilities to buffer themselves from global supply-chain risks, Sriram said, “Australia did not – and as a consequence we fell further behind.”
But can we right the ship in time?
If Australia was investing 3 per cent of GDP in R&D right now, he said, “the economy would be $100 billion better off, with an additional 42,000 high-value jobs [that] would transform Australia’s economy.”
But Australia is now so far behind, he said, that it “urgently needs deep investment, bold investment in ideas and innovation, and… to talk about the cost of failing to use our potential, and the damage it will do to our future prosperity.”
Scientists “embody humanity’s timeless curiosity” and are continuing to find innovative opportunities for economic growth – but without a “deep, long term and sustained funding strategy with boldness,” he said, Australia’s intellectual property “will slip through our hands…. We can’t let history keep repeating.”
“Ideas are precious,” Sriram continued. “They are the source of future jobs and growth.
“They really are our national inheritance – but all the research done here is creating enormous companies, billionaires, and thousands upon thousands of jobs elsewhere.
“And when we give up our ideas, they’re never coming back.”
