Figure 2 shows the two components of research activity on an expenditure-weighted basis from 2008 to 2017. As universities report their enrolments and finances on a calendar year basis, all time series shown in this paper were compiled on a calendar year basis.13 The time series are volume indexes, with the base year set at 2008. Research degree completions have grown significantly faster than research output funded by government and industry, although, as mentioned earlier, the latter component is the major driver of the composite research index (also shown in Figure 2). The strong growth in research completions largely reflects faster growth in higher research degree enrolments of international students. Enrolments of international students for higher research degrees grew 94.3% from 2008 to 2017 compared to 11.9% for domestic students.14 Aggregate research output produced by the university sector (as estimated by the composite index) grew by 40.4% over the timespan.
Figure 2 also shows an index of expenditure on research and development by higher educational institutions based on data from the ABS Survey of Research and Experimental Development, Higher Education Organisations for 2018.15 This series is also expressed in chain volume terms in Figure 2 and grew by 32% over the timespan. The growth in research expenditure tracks closely with the new aggregate experimental estimates of research output which provides a level of validation to the experimental methodology.
Figure 2: Components of research activity
Figure 3 shows the composite research index alongside the expenditure-weighted teaching activity index. The two indexes track fairly closely over time. The composite research index grows by 40.4% over the time span compared to 38.5% in the teaching output index.
Figure 3: Teaching output and total research activity
Figure 4 shows the aggregate university teaching output index based on the experimental methodology in this paper, compared to the current ABS method.16 The experimental methodology in this paper estimates that university output grew by a cumulative 39.5% over this time period, 2.7 percentage points higher than cumulative growth using the current ABS methodology.
The graph shows that the weighted aggregation of the experimental teaching and research indexes has little statistical impact compared to the current method. While the method proposed in this paper implies slightly stronger output growth over the time span than the current method, the overall economic story is broadly similar.
Figure 4: Aggregate university output
Growth in university output from 2008 to 2017 is predominantly driven by universities outside the Group of Eight. As shown in Figure 5, these universities collectively grew by a cumulative 49.7%, compared to Group of Eight universities which grew 27.7%.
Figure 5: Aggregate university output
13 Before inclusion in ABS macroeconomic statistics, the estimates in this paper would need to be converted to a financial year basis.
14 Table 4, Higher education facts and figures 2019. https://www.universitiesaustralia.edu.au/wp-content/uploads/2019/08/190716-Facts-and-Figures-2019-Final-v2.pdf
15 Data from this survey is published in Research and Experimental Development, Higher Education Organisations, Australia, see https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8111.0Explanatory%20Notes12018?OpenDocument
16 The 'current ABS method' in Figure 3 represents a chain volume derivation of output of public universities, sourced from annual supply-use tables and is previously unpublished.