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The most commonly used indicator for comparison purposes is the ratio of expenditure on R&D to Gross Domestic Product (GDP). As table 25.3 shows, in 1998-99 Australia's R&D expenditure was 1.50% of its GDP, ranking it below Japan (3.04%), Finland (2.89%), the United States (2.60%), Korea (2.55%), Germany (2.31%), France (2.18%), Iceland (2.04%), Netherlands (1.95%), the United Kingdom (1.83%) and Canada (1.71%).

In terms of business enterprise R&D, Australia's ratio of R&D expenditure to GDP (0.68%) is again below the ratios for the industrialised countries referred to earlier, and is also below the rate for the Czech Republic.

For government sector R&D as a percentage of GDP, Australia ranks higher. An R&D to GDP ratio of 0.35% places it fifth in the group of OECD member countries for which data are available, behind only Iceland (0.76%), Korea (0.45%), France (0.41%) and Finland (0.36%). Government sector R&D as a percentage of GDP is much higher for Australia than for the United States and Canada.

For the higher education sector, Australia also ranks highly. With an R&D to GDP ratio of 0.44%, Australia ranks behind only Finland (0.57%), Netherlands (0.53%), Iceland (0.51%), Japan (0.45%) and Canada (0.45%) among OECD countries.