Five themes every R&D-active business should be watching
- Australia’s innovation ecosystem has matured well beyond early-stage nurturing, with programs like CSIRO’s ON Initiative now having upskilled over 8,500 researchers and helped attract more than $800 million in combined investment and commercialisation grants.
- Cross-sector partnerships in mining, biotech, clean energy, and AI are accelerating the path from lab to market, with major milestones like the world’s largest OEM-agnostic autonomous mine at Roy Hill signalling how fast the pace of applied R&D is moving.
- The Ambitious Australia report, released in March 2026, proposes sweeping R&DTI reforms, including quarterly payments, a higher refundable offset, and a new premium startup stream.
- Australia is negotiating a formal association with Horizon Europe, the world’s largest collaborative R&D funding program at €95.5 billion, opening access from early 2027.
- Cash flow friction remains the single biggest barrier for R&D-driven companies waiting up to 18 months for government rebates, and specialist R&D finance is increasingly filling that gap.
When Cooperative Research Australia brings together researchers, policymakers, and industry leaders at The University Club of Western Australia this May for Collaborate & Innovate 2026, the conversation won’t be about whether Australia can innovate. That question was settled years ago. The real conversation is about what happens next: how the ecosystem scales, who gets funded, and whether the financial infrastructure can keep pace with the ambition.
The timing matters. The conference falls just eight days after the 2026-27 Federal Budget, which is widely expected to respond to the most significant review of Australia’s R&D landscape in a decade. For businesses running clinical trials, scaling deep-tech products, or managing multi-year R&D programs, the themes on the agenda have immediate operational consequences.
An Ecosystem That’s Outgrowing Its Origins
Australia’s R&D infrastructure has undergone a structural shift over the past five years. What was once a collection of disconnected grants, isolated university labs, and fragmented government initiatives has consolidated into something closer to a cohesive, outcomes-driven system where researchers, corporates, and government bodies are actively collaborating to push discoveries toward commercial viability.
The numbers tell part of the story. The Tech Council of Australia reports that the technology sector now contributes $248.5 billion to the economy (8.9% of GDP), hitting its ambitious 2030 target four years ahead of schedule. Tech-related employment has expanded by up to 200,000 positions since 2021, with tech workers contributing an average of $50,000 more per year to the national economy than those in other sectors.
But there’s a tension underneath those headline figures. Business expenditure on R&D reached $24.4 billion in 2023-24, yet as a proportion of GDP it has been stuck at 0.9% since 2017-18, well below the OECD average of roughly 2%. The Australian Industry Group attributes this stagnation to an exceptionally narrow industrial base for R&D, with just three industries accounting for over three-quarters of the national total. Australia has become highly adept at adopting and integrating mature technologies, but the foundational, experimental R&D that generates novel intellectual property remains underfunded relative to peers — a persistent gap in an otherwise maturing R&D landscape.
Cross-Sector Partnerships Are Rewriting the Playbook
The complexity of the problems Australia is trying to solve, from decarbonising heavy industry to deploying AI at scale, has made cross-sector collaboration a necessity rather than a nice-to-have. CSIRO notes that global demand for energy transition minerals doubled between 2019 and 2024 and is projected to double again by 2030, requiring R&D partnerships that span mining, clean energy, and advanced manufacturing simultaneously.
In mining, the results are tangible. Epiroc and Hancock Iron Ore completed the conversion of all 78 haul trucks at Roy Hill from manual to fully autonomous operation in October 2025, creating the world’s largest OEM-agnostic autonomous mine. Deloitte’s Tracking the Trends 2026 report describes the sector as entering a new phase where critical minerals are no longer simply commercial commodities but focal points of national security strategy, and a 63% decline in mining engineering graduates is forcing the industry to lean heavily on AI and robotics to fill the labour gap.
For the life sciences sector, the stakes are equally high. The global biotech market generated an estimated US$1.55 trillion in 2023 and is projected to nearly double by 2030, and Australia has carved out a strong niche as a launchpad for early-stage clinical development. But biotech R&D remains brutally capital-intensive, with Novotech survey data showing that cost (cited by 32% of respondents) and patient recruitment (29%) remain the primary operational challenges in clinical trials globally.
Meanwhile, AI investment in Australia is on track to reach approximately $1.3 billion in R&D spending by the end of FY2026, and NEXTDC’s $7 billion MOU with OpenAI to build a sovereign AI hyperscale campus in Western Sydney signals the kind of foundational infrastructure that will underpin the next wave of deep-tech commercialisation.
Building for Global Markets From Day One
The most consequential international development for Australia’s R&D landscape in 2026 is the formal commencement of treaty negotiations to associate with Horizon Europe, the EU’s €95.5 billion collaborative research and innovation program. Australian organisations are expected to be eligible to apply for Horizon Europe research calls from early 2027.
The strategic value is difficult to overstate. The Group of Eight universities describe the association as establishing “knowledge trade routes” that link research collaboration with trade policy and sovereign defence capability, while Universities Australia argues it will enable economies of scale for Australian R&D that are impossible to achieve in isolation.
These international partnerships sit alongside targeted bilateral accelerators designed to help Australian startups commercialise offshore. CSIRO’s India Australia RISE Accelerator, for example, selected twenty Australian startups with scalable renewable energy solutions and deployed them into the Indian market in late 2025, translating domestic environmental R&D into global commercial traction.
The venture capital environment supports this outward posture. Australian startups raised $5.48 billion across 390 deals in 2025, a 31% increase on the prior year, though deal count dropped 20%, signalling that investors are concentrating capital on fewer, higher-conviction bets as the R&D landscape matures.
What the Ambitious Australia Reforms Mean for R&D
The Ambitious Australia report, released on 17 March 2026 as the final output of the Strategic Examination of Research and Development (SERD), proposes the most significant restructuring of the R&D Tax Incentive since the program’s inception. For any business currently claiming (or planning to claim) the R&DTI, these 20 recommendations deserve close attention.
The key proposals
The report recommends moving from a single-rate R&DTI to a tiered system explicitly linked to company size, growth stage, and alignment with national priorities. Among the headline changes: raising the minimum eligible R&D expenditure threshold from $20,000 to $150,000, introducing a premium startup stream assessed through a 100-point eligibility test (covering IP holdings, VC investment, and accelerator participation), and increasing the refundable offset from the current tax rate plus 18.5% to tax rate plus 23.5% for qualifying startups.
The most operationally significant proposal for cash flow is the shift to quarterly R&DTI payments aligned with BAS lodgments, replacing the current annual retrospective refund. If implemented, this would transform how R&D-active companies plan their capital.
What the industry is saying
The Tech Council of Australia has welcomed the review, arguing that modernising the R&DTI is essential to keeping high-growth companies headquartered in Australia rather than forcing them offshore. However, advisory firms including BDO and RSM have flagged concerns about the complexity of a tiered system with on-ramps and off-ramps tied to revenue growth, sector carve-outs, and a new “deemed rate” for supporting activities.
The government’s response is expected in the 2026-27 Federal Budget on 12 May, just before the Collaborate & Innovate conference opens.
How R&D Finance Fits Into This Picture
Even if the proposed quarterly R&DTI payments are legislated, they won’t arrive overnight. In the current system, a company can wait 10 to 18 months between incurring eligible R&D expenditure and receiving the corresponding refund. For businesses running capital-intensive programs like clinical trials, that cash flow gap isn’t an inconvenience. It’s a threat to project continuity.
This is where Rocking Horse Group comes in. We’re a specialist R&D finance lender based in Sydney, and we exist to solve one specific problem: the timing gap between spending on eligible R&D and receiving the government rebate. We lend against the R&D expenditure your business has already incurred, so you can access the cash value of your R&D Tax Incentive months before the ATO processes it.
How it works
We provide funding from $50K to $5M, up to 80% of your accrued year-to-date eligible R&D spend. Funding typically lands within two weeks of approval. When the ATO pays out your refund, the loan is settled in a single payment. No monthly repayments, no personal guarantees, no equity dilution, and no restrictions on how you use the funds.
We’re not an R&D tax advisor or consultant. We don’t assess eligibility or lodge claims. That’s your R&D advisor’s role, and you’ll need a comfort letter from one confirming your eligible expenditure. If you don’t have an advisor yet, we can connect you with a trusted one in our network.
Locking in for the long term
For businesses with R&D programs spanning multiple financial years, our three-year Multi-Facility Agreement keeps your rate 1% lower than the standard single-year rate, with lower exit fees too. Whether you’re a startup navigating your first clinical trial or a growing business running multi-year R&D cycles, the facility is structured to scale alongside you. Check how much you could access with our calculator, or assess your R&D financing eligibility today.
FAQs
What is Collaborate & Innovate 2026?
Collaborate & Innovate 2026 is an annual conference convened by Cooperative Research Australia, taking place 20-22 May 2026 at The University Club of Western Australia in Perth. It brings together researchers, industry leaders, and policymakers to discuss the themes shaping Australia’s R&D ecosystem, with a particular focus on cross-sector collaboration, commercialisation pathways, and the implications of the Ambitious Australia R&DTI review.
What is the Ambitious Australia report?
The Ambitious Australia report is the final output of the Strategic Examination of Research and Development (SERD), released on 17 March 2026. It contains 20 recommendations for restructuring the R&D Tax Incentive, including quarterly payments, a higher refundable offset for qualifying startups, and a new minimum expenditure threshold. The government is expected to respond in the 2026-27 Federal Budget.
How does Australia’s R&D spending compare internationally?
Business expenditure on R&D in Australia was $24.4 billion in 2023-24, representing 0.9% of GDP. This figure has been flat since 2017-18 and sits well below the OECD average of approximately 2%. The Ambitious Australia report identifies closing this gap as a central priority.
What is R&D finance, and how does it help R&D-active businesses?
R&D finance is a short-term loan secured against the R&D Tax Incentive rebate a business is entitled to, based on eligible expenditure already incurred. It bridges the timing gap between spending on R&D and receiving the government refund, allowing businesses to maintain project momentum, retain staff, and continue investing in innovation without giving up equity or taking on traditional debt with restrictive covenants and personal guarantees.
Will the proposed quarterly R&DTI payments replace the need for R&D finance?
Not in the near term. The quarterly payment proposal is one of 20 recommendations that the government has yet to formally accept, and even if legislated, implementation would take time. In the meantime, the current system still involves annual retrospective refunds with processing timelines that can stretch well beyond 12 months. R&D finance addresses this gap right now, providing capital based on expenditure already incurred rather than waiting for policy changes to take effect.