The benefits of collaboration

Raising productivity growth has proven to be a major challenge for Australia in recent history. There is a growing body of evidence that shows when universities and businesses collaborate effectively, productivity rises with associated benefits for participating firms and the economy more broadly.

To quantify this effect, Cadence Economics working with Universities Australia undertook detailed modelling of formal collaborations between Australian businesses and universities. The latest figures from the Australian Bureau of Statistics show 16,000 companies in Australia are collaborating formally with a university. And countless more have university links that are less formal - including through student work placements and local community ties.

Our analysis found that these collaborations generated an additional $10.6 billion for those participating companies in total, with the total benefits to the economy estimated to be $19.4 billion a year (using our in-house computable general equilibrium model). This additional economic activity was estimated to create an additional 30,000 full time equivalent jobs in the economy.

Looking forward, we also considered the impacts of lifting the number of firms formally collaborating with universities to 24,000 (implying an increase of 9 places, to 18th, in Australia's ranking for collaboration and innovation produced by the World Economic Forum).

If this could be achieved, we estimate an increase in Australia's economic welfare from $19.6 to $30 billion per annum.

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