Although government and higher education R&D expenditure are on the up, and Australia generated almost 50 per cent more scientific and technical articles in 2003 than in 1999, the number of US patents granted to Australia has fallen, a government report has revealed.

The 2004-05 Innovation Report: Real Results Real Jobs - released yesterday by the federal department of education science and training, calculates that 53 patents per million of population were granted in 2003 as compared to 54 patents per million in 2001. This represents only 50 per cent of the OECD average, the report said.

Spending by the business sector on R&D has marked time, increasing marginally from 0.72 per cent of GDP in 2000-01 to 0.79 per cent of GDP in 2002-03. This is over 40 per cent lower than average OECD spending.

Public spending on R&D rose to 0.78 per cent in 2002-03, around 20 per cent above the OECD average.

Venture capital investment also increased from 0.12 per cent of GDP in 2000 to 0.20 per cent in 2001, bringing spending into line with the OECD average.