It provides an opportunity to assess the TMT sector’s performance in R&D and its role in the Australian innovation landscape.
As Australia’s economy evolves, understanding the TMT sector’s role in innovation is crucial for businesses looking to capitalise on government incentives and stay ahead of the curve. But one thing's for sure – the data shows that TMT is playing a key role in driving the nation’s future growth.
A shifting economic landscape
Australia’s historical reliance on the resources sector is undergoing a significant transformation. The latest data reveals a dramatic 71 per cent decline in R&D expenditure within the Mining sector since 2012-13. Alongside this, while maintaining the second-highest number of R&D registrations, the Manufacturing industry also saw a 35 per cent decline in its share of the program.
This shift points to a more diversified economy, highlighting the role sectors such as TMT will play in propelling future growth.
With government current prioritising emerging technologies such as artificial intelligence (AI), cybersecurity, quantum computing, and telecommunications, we anticipate an uptick in R&D investment in these areas, which should be reflected in next year’s data.
Is TMT getting its fair share?
In 2021-22, the Information, Media, and Telecommunications sector ranked third in the total number of R&D registrations, reflecting ongoing engagement in R&D activities. However, the question remains: is the sector truly maximising its access to available incentives, especially considering the government's emphasis on fostering innovation?
While several technology companies featured prominently in the top 10 largest R&D claims, the report shows a wide disparity in spend across entities, with amounts ranging from less than $20,000 to over $200m. The average R&D expenditure recorded was just below $1m, while the median was slightly above $300,000. This suggests that smaller companies are actively participating in the program alongside larger entities, but the gap suggests there’s potential for broader engagement and further growth.
Key takeaways
Several insights from the report underscore TMT's key role in driving innovation and highlight practical opportunities for businesses to access government support:
- Strong engagement: The demand for increased investment in innovation and R&D is clear, and the TMT sector’s strong presence in the R&D Tax Incentive program is key for driving Australia’s innovation agenda.
- Alignment with government policy: The current focus on emerging technologies and infrastructure places the TMT sector in a favourable position for ongoing support and future growth.
- Claims compliance: The ATO’s report underscores the importance of robust compliance and governance frameworks. Businesses must ensure proper documentation and processes to support any RDTI claims effectively. For the TMT sector, understanding these dynamics is crucial for maximising available incentives and contributing to Australia's innovation agenda.
- Guidance material: AusIndustry’s efforts to understand software development within the sector through initiatives like pilot Advance Finding programs and periodic updates to guidance material reflects a commitment to fostering innovation.
We’re here to help
As the TMT sector navigates this evolving landscape, now is the time to ensure you’re optimising your R&D strategies. If you’re unsure about your eligibility or need help navigating the complexities of R&D claims, our Innovation Incentives team is here to provide tailored support.
Learn more about how our Technology, Media & Telecommunications services can help you
