"This country has got a major productivity challenge … we are a high-wage nation with very, very low levels of economic complexity," he said.
"We are great at growing things, and we are great at taking things out of the ground and generating wealth for the country … but beyond that, we've got a problem.
"The way to improve economic complexity is to actually have some sovereign capability around research and development."
The fund was the government's response to a report by the SA Productivity Commission, which was tasked with finding ways to advance productivity within the state's private sector.
The government would consult broadly with business on the fund's design, with a view to introducing legislation into the parliament before the end of 2026.
It would support targeted, high-impact research programs aligned with the state's strategic priorities strength.
"The reason why we're legislating it is we're going to protect it … so that it's there for the long term," Mr Malinauskas said.
"This thing will only yield a dividend for the future of our state and its economy if it's allowed to work over the long term."
The funding is allocated across four years, eventually rising to indexed annual funding of $50 million.
The Productivity Commission estimated that every $1 spent on the initiative across the next decade would generate economic output of $3.70.
While Australia was in the top five for wages, it ranked 105th in the world for economic complexity, between Botswana and the Ivory Coast, the premier said.
And Australia spent only 1.86 per cent of its GDP on research and development, which was one of the lowest percentages in the OECD.
The SA government wanted to show it was serious about setting up the economy in a way that is sustainable and long term, the premier said.
"Because if we don't do this right, we're all going to regret it," Mr Malinauskas said.
He acknowledged the announcement "has zero votes in it".
"And when I say zero votes, tragically, I'm being literal," he said.
"It's not guaranteed (to be) a success, but it's worth a crack."
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