The 2019 Productivity Bulletin also warned of weakening productivity growth across the economy — with notable exceptions in professional services, administrative services and the finance and insurance sectors.

Universities Australia Chief Executive Catriona Jackson said the nation’s universities stood ready, willing and able to work with businesses to help arrest this slide through more R&D collaboration.

“This slowdown is troubling for the nation’s productivity and economic growth — and that should concern all Australians,” she said.

“This is because — 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.”

“Australia has some of the world’s best and brightest innovators, researchers and experts in our nation’s universities — and they can help businesses maximise returns from their R&D investment.”

“We urge businesses to take a closer look at what our world-class university system can do to help your firm to innovate and grow.”

Modelling by Cadence Economics commissioned by Universities Australia in 2018 found the 16,000 Australian firms who partner with universities derived $10.6 billion from collaboration.

“By tapping into this university brains trust, business can source new ideas, get the jump on early stage research and cut the time it takes to bring new products to market,” Ms Jackson said.

“And there is a strong return on investment for businesses who direct their R&D spend into collaborative research with a university — $4.50 for every dollar invested.”

Ms Jackson noted the commission found labour productivity was also low.

“At the same time, it is very important that Australia removes the current cap on funding for student places at universities,” she said.

“Educational attainment plays an important role in driving productivity growth – which is needed to grow Australia’s economy and safeguard living standards.”

“Universities need the flexibility and funding to deliver our skilled graduate workforce for the future.”