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​R&D spend tops $1.4 billion with half of Kiwi businesses embracing innovation

​R&D spend tops $1.4 billion with half of Kiwi businesses embracing innovation

"Companies up and down New Zealand are continuing to develop high quality goods and services which they can successfully sell on the world stage."

Science and Innovation Minister Steven Joyce

Science and Innovation Minister Steven Joyce

More businesses across New Zealand are creating better goods and services through greater spending on research and development in 2015, with half of the country already embarking on a path of innovation.

Latest Statistics New Zealand findings reports that total Research and Development spending in 2015 was up almost $200 million on 2014, to $1.4 billion.

While the Business Operations Survey represents just one measure of estimated R&D spending, the largest growth in spending was for medium-sized firms - those with 20 to 99 staff.

According to findings, within this space R&D spending grew 19 percent (to $434.6 million) compared with 2014.

Meanwhile, larger Kiwi firms (with more than 100 employees) invested almost $800 million in R&D, up 15 percent from 2014.

“The percentage of firms aiming to come up with better goods and services rose significantly - to a 49 percent 'innovation rate' in 2015,” says Stuart Jones, Senior Manager, Statistics New Zealand.

“This means that almost 1 in 2 firms spent on improving products and processes, research and development (R&D), design, and new ways of marketing.”

Jones says the survey also showed that experienced managers and high-quality goods and services were the keys to exporting for firms.

“Technical know-how, economies of scale, and lower input costs were seen as the least important factors,” Jones adds.

At present, and perhaps unsurprisingly, Australia remained a key market for many New Zealand firms.

The top three destinations for firms selling goods and services overseas remained Australia (21.1 percent of New Zealand businesses), the United States (10.7 percent), and the United Kingdom (8.7 percent).

Only 7.8 percent of business reported trading with China in 2015, despite a 60 percent lift in exports of goods and services to China since 2011 (to $10.9 billion in 2015).

Government approval

Science and Innovation Minister Steven Joyce has welcomed the news that New Zealand companies are investing more in research and development.

“These are very encouraging numbers,” he says.

“They show that the work the Government is doing through Callaghan Innovation and the R&D Grants programme is helping have the desired effect of growing New Zealand’s Business R&D activity.

“Research and Development activity is crucial for creating a strong and diversified economy, and moving into higher value products and services that provide a premium for exporters and higher wages for Kiwi workers.

“New Zealand has historically had very low levels of R&D conducted by businesses compared with most OECD countries, but these numbers confirm that is now changing.”

For Joyce, the figures all tell an “encouraging story” for New Zealand’s manufacturing, ICT and service industries.

“Taken together with our latest export figures, they show that companies up and down New Zealand are continuing to develop high quality goods and services which they can successfully sell on the world stage,” he adds.

“We will continue to work with them through the Government’s Business Growth Agenda, to encourage more R&D, and more product innovation, so that our talented exporters can compete and win on the world stage.”

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