The government has made considerable investments in boosting leading-edge research and innovation: over a ten year period, 1999-2008, AUD 620 million was spent on the Science, Technology and Innovation Initiative. Their combined knowledge base has a considerable potential for new business formation and attraction of external firms. In 2007 Victorian universities received a total of AUD 653.9 million in external research income. Victoria’s two largest universities, the University of Melbourne and Monash University, accounted for 82% of research income for the region. The main expenditure on research by the universities has been in medical and health sciences. It has contributed to winning competitive national funding and has boosted the knowledge generation in universities.