Leveraging R&D investment for the Australian built environment

This paper discusses a current research project building new understandings and knowledge relevant to R&D funding strategies in Australia. Building on a retrospective analysis of R&D trends and industry outcomes, an industry roadmap will be developed to inform R&D policies more attuned to future industry needs to improve research investment effectiveness. The project will also include analysis of research team formation and management (involving end users from public and private sectors together with research and knowledge institutions), and dissemination of outcomes and uptake in the Australian building and construction industry. The project will build on previous research extending open innovation system theory and network analysis and procurement, focused on R&D. Through the application of dynamic capabilities and strategic foresighting theory, an industry roadmap for future research investment will be developed, providing a stronger foundation for more targeted policy recommendations. This research will contribute to more effective construction processes in the future through more targeted research funding and more effective research partnerships between industry and researchers.

Ethics and Socially Responsible Investment : A Philosophical Approach

This volume breaks new ground by approaching Socially Responsible Investment (SRI) as an explicitly ethical practice in financial markets. The work explains the philosophical and practical shortcomings of ‘long term shareholder value’ and the origins and conceptual structure of SRI, and links its pursuit to both its deeper philosophical foundations and the broader, multi-dimensional global movement towards greater social responsibility in global markets. Interviews with fund managers in the Australian SRI sector generate recommendations for better integrating ethics into SRI practice via ethically informed engagement with invested companies, and an in-depth discussion of the central practical SRI issue of fiduciary responsibility strengthens the case in favour of SRI. The practical and ethical theoretical perspectives are then brought together to sketch out an achievable ideal for SRI worldwide, in which those who are involved in investment and business decisions become part of an ‘ethical chain’ of decision makers linking the ultimate owners of capital with the business executives who frame, advocate and implement business strategies. In between there are investment advisors, fund managers, business analysts and boards. The problem lies in the fact that the ultimate owners are discouraged from considering their own values, or even their own long term interests, whilst the others often look only to short term interests. The solution lies in the latter recognising themselves as links in the ethical chain.

Framework for assessing financial literacy and superannuation investment choice decisions

There is a worldwide trend towards rapidly growing defined contribution pension funds in terms of assets and membership, and the choices available to individuals. This has shifted the decisionmaking responsibility to fund members for managing the investment of their retirement savings. This change has given rise to a phenomenon where most superannuation fund members are responsible for either actively choosing or passively relying on their funds’ default investment options. Prior research identifies that deficiencies in financial literacy is one of the causes of inertia in financial decision-making and findings from international and Australian studies show that financial illiteracy is wide-spread. Given the potential significant economic and social consequences of poor financial decision-making in superannuation matters, this paper proposes a framework by which the various demographic, social and contextual factors that influence fund members’ financial literacy and its association with investment choice decisions are explored. Enhanced theoretical and empirical understanding of the factors that are associated with active/passive investment choice decisions would enable development of well-targeted financial education programs.

Financial literacy and pension investment decisions

The call for enhanced financial literacy amongst consumers is a global phenomenon, driven by the growing complexity of financial markets and products, and government concerns about the affordability of supporting an ageing population. Worldwide, defined benefit pensions are giving way to the risk and uncertainty of defined contribution superannuation/pension funds where fund members now make choices and decisions that were once made on their behalf. An important prerequisite for informed financial decision-making is adequate financial knowledge and skills to make competent investment decisions. This paper reports the findings of an online survey of the members of a large Australian public sector-based superannuation fund and shows that although respondents generally understand basic financial matters, on average, their understanding of investments concepts, such as the relationship between risk and returns, is inadequate. These results highlight the need for education programs focusing specifically on developing fund members’ investment knowledge and skills to facilitate informed retirement savings decisions.

The role of institutional rural property in diversified investment portfolios in NSW, Australia

The food and fuel crisis experienced in 2006 to 2008 has highlighted the importance of agricultural commodity production throughout developing and developed economies and has placed greater awareness and importance on rural property and rural property markets. These factors have led to an increased interest from major property investment institutions and property companies in the role of rural property in a mixed asset or mixed property investment portfolio. This paper will analyse rural property sales in New South Wales for the period 1990-2008, and will compare total return performance across a number of rural property sectors based on geographic location and land use type. These results show that the inclusion of rural property in an investment portfolio has benefits in relation to return and risk.

Retrospective evaluation and prospective value-add : a review of R&D investment in Australia

This paper describes a lead project currently underway through Australia’s Sustainable Built Environment National Research Centre evaluating diffusion mechanisms and impacts of R&D investment in the Australian built environment. Through a retrospective analysis of R&D investment trends and industry outcomes, and a prospective assessment of industry futures using strategic foresighting, a future-focussed industry R&D roadmap and pursuant policy guidelines will be developed. This research aims to build new understandings and knowledge relevant to R&D funding strategies, research team formation and management, dissemination of outcomes and industry uptake. Each of these issues are critical due to: the disaggregated nature of the built environment industry; intense competition; limited R&D investment; and new challenges (e.g. IT, increased environmental expectations). This paper details the context within which this project is being undertaken and the research design. Findings of the retrospective analysis of past R&D investment in Australia will be presented at this conference.

Property investment, construction and economic growth : the case of Malaysia

It is generally accepted that there is a close relationship between property investment and construction activity. The construction sector plays a crucial role in economic development, especially for a developing nation such as Malaysia. However, the volume of new properties added to the property market is only a fraction of the total volume of the property market. Is the conventional assumption of the relationship between property investment and construction supported by empirical data? This paper revisits the tripartite relationships between economic growths, property investment and construction activities with official Malaysian 2000Q1-2010Q4 quarterly time series data. The Granger causality tests are used to establish the causality runs from the GDP to the value of property transactions, and the growth of construction activities to GDP growth. The result is expected to be useful for policymakers and industrial practitioners in formulating industrial policies and corporate strategies.

Assessing the real value in residential property investment

One of the major fall outs from the Global Financial Crisis has been the decline in residential property construction, home lending and residential property prices. This has lead to some extent to a reduction in the number of small investors willing to commit funds to an investment market that is not seen to perform as well as other investment assets, particularly in relation to income return.With a decreasing supply of rental accommodation in the housing markets, less public housing being constructed by both State and Commonwealth Governments, there is the potential for the residential property market to provide more substantial returns than previous years.This paper will analyse the current residential housing market in Brisbane, Australia to determine if there are sectors in this market that are outperforming the average income and total return for residential investment property and the variation in investment performance across the various housing sub-markets. The results show that property investment in residential property provides opportunities to maximize returns based on geographic location and socio-economic economic status, with lower value areas showing the highest income returns and higher value suburbs showing greater capital returns