This article presents an investigation into the Australian public education sector and focuses on the management of research and doctoral education in an increasingly corporatized climate. It is argued that diversity in knowledge creation and production is central to the successful Knowledge Economy. Diversity in doctoral education encompasses: diversity of student; diversity of research approach and type; and diversity of discipline and institution. Government has a key role in maintaining diversity against the background of an increasing tendency in public sector policy towards corporatization and outcomes-based funding. Four key areas of concern are identified: funding allocation for research and doctoral places; resource allocation and competition; selectivity and concentration; and relevance. It is argued that, taken together, these four policy directions could significantly impact the nature of Australian doctoral research and, in many instances, diminish diversity.