Research and development

Laboratory workers

New South Wales has a globally competitive research sector with a strong infrastructure base. NSW research institutions provide associations and businesses with access to expertise and cutting edge research and development (R&D) infrastructure including large-scale facilities for testing and prototyping, supporting the state's culture of innovation.

The state's R&D regime is also supported by a highly competitive national tax incentive program which provides a 45% refundable tax offset (equivalent to a deduction of 150%) to entities with an aggregated turnover of less than A$20 million per annum undertaking eligible R&D activities, and a 40% non-refundable offset (equivalent to a deduction of 133%) to all other eligible entities.

NSW attracted 35% of Australian businesses' total spending on R&D in 2011-12. The state was the location for almost half of national business R&D expenditure in services, including 76% of financial and insurance services R&D expenditure, 58% of wholesale trade R&D expenditure, 52% of information media and telecommunications R&D expenditure, and 50% of health care and social assistance R&D expenditure. Additionally, 44% of machinery and equipment manufacturing businesses' R&D expenditure took place in NSW in 2011-12.

Business research and development expenditure by industry, 2011-12

Industry NSW
NSW as %
of Australia
Primary Industries 389.2 4,293.9 9.1
  Agriculture, forestry and fishing 34.8 189.7 18.4
  Mining 354.3 4,104.1 8.6
Manufacturing 1,286.8 4,473.9 28.8
Services2 4,706.7 9,553.6 49.3
  Financial and insurance services 2,260.3 2,985.2 75.7
  Professional, scientific and technical services 1,012.0 2,831.7 35.7
  Wholesale trade 412.5 715.8 57.6
  Information media and telecommunications 364.0 701.2 51.9
  Construction 214.6 819.5 26.2
  Administrative and support services 123.8 308.7 40.1
  Electricity, gas, water and waste services 64.9 378.1 17.2
  Transport, postal and warehousing 56.2 292.9 19.2
  Rental, hiring and real estate services 48.7 92.1 52.9
  Health care and social assistance 47.3 94.4 50.1
  Retail trade 45.5 146.0 31.1
Total 6,382.7 18,321.3 34.8


1. Includes R&D performed overseas but controlled by an Australian business
2. Total includes public administration and safety,  accommodation and food services, education and training, arts and recreation  services and other services, which are not shown separately.

Source: ABS Cat. No. 8104.0, Research and Experimental Development, Businesses, Australia, 2011-12