SummaryThe role of universities in economic and social development is widely recognised. Governments invest significant resources into higher education for both teaching and research, but increasingly seek broader economic gains through commercialisation of university outcomes. Internationally, increased need for accountability in both allocation and expenditure of public funds has been accompanied by an emphasis on evaluation of research. Evaluation, particularly when used to allocate funds, can be a powerful driver of policy. Australian higher education research is characterised by several unique factors. First, it represents a major portion of the country’s overall R&D system, with Higher Education Expenditure on R&D as a higher proportion of GDP than the OECD average (and higher than the UK or US). Second, a very significant proportion of funding for university research is allocated on the basis of performance through three separate indices (Institutional Grants Scheme; Research Training Scheme; and the Research Infrastructure Block Funds). These indices include performance in attracting research income, publications, higher degree research enrolments and completions.This paper raises a number of issues relating the changing shape of university research in Australia. The data profiled indicate a clear decrease in the proportion of basic research and an increase in the proportion of applied research conducted in Australian universities. This trend is also noticeable in the G08, the group of research-intensive universities that conduct over 70% of the Australia’s higher education research. However, the institutional profiles show varying emphases on basic, strategic basic, applied research and experimental development, with all universities reflecting the overall shift from basic to applied research. Together, these findings and those from the total Australian, G08 and institutional graphs raise a number of questions for further research.