The demand for workers (employers, self-employed people and employees) having research training extends beyond the researcher workforce itself and is increasing. The research workforce is not uniform but segmented according to disciplines and the economic and sectoral contexts in which researchers work. The growth of cross-disciplinary and multi-disciplinary research places additional demands upon the size and skills of the research workforce. To maintain the supply of students capable of and wishing to undertake research training, the strategy must improve the attractiveness of career options and pathways, especially at the early and mid-career stages. The importance of tapping into the potential supply of high quality international research students and academics cannot be underestimated. Australia must be seen as a welcoming and high performing research destination if it is to be able to build research capacity quickly and effectively in a highly competitive global environment. A world class research training environment requires excellence, scale and diversity. Australia's incremental approach to policy development is no longer adequate to the task of creating such an environment; a radical overhaul of the policy and financing framework for research and research training is essential. What is needed is a framework that provides for: full cost funding of research and research training; the allocation of research block grants based on Excellence in Research for Australia (ERA) and other research quality assessments; the full funding of indirect costs using a unique rate for each university; incentives for "hub and spoke" approaches to research collaboration; and the development of coherent international research collaboration strategies. (Contains 2 figures.)