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R&D spend main measure of success for Callaghan Innovation, Goldsmith says

Wednesday 7th June 2017

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The government's principal means of evaluating the success of Callaghan Innovation, the agency tasked with accelerating the commercialisation of innovation, is how much businesses are spending on research and development, Science and Innovation Minister Paul Goldsmith told Parliament's education and science select committee. So far, it's falling short of its target.

This year's budget included a $373 million increase in spending for science and innovation in a bid to help diversify the economy support more jobs and higher wages, including a $74.6 million boost for Callaghan Innovation R&D grants.

In response to questions from Labour's research and innovation spokeswoman Megan Woods about the lack of specific success measures for Callaghan, Goldsmith said: "One of the simpler measures of progress is the overall spending by businesses on R&D and we are seeing that go decisively upwards."

He noted that investments in R&D often take years to come to fruition and it can be difficult to “pin down exactly what the payback is.” Still, the government has a “suite of measures” regarding outcomes and objectives, Goldsmith said.

The government's aim has been to “find a way to encourage companies to invest,” he said adding there has been a 29 percent increase over the past two years in business investment in R&D. Among businesses supported by Callaghan, there has been a 46 percent increase.

The overall spend, however, remains light. New Zealand still lags behind its peers with recent government data showing total R&D investment as a proportion of gross domestic product increased to 1.3 percent in 2016 from 1.2 percent in 2014. The OECD average is 2.4 percent. Business investment in R&D was 0.6 percent of GDP in 2016, well short of the government's goal to lift it to 1 percent.

"We are seeing a significant uptick. It's not as fast as we would like but we are on the way," said Goldsmith.

He also noted that while the government is en route to raising its spending on R&D to 0.8 percent of GDP, there is no timeframe to hit that target.

"We are making progress towards that … it is difficult when you have a GDP galloping forward to the extent that we have in this country," he said in response to questions. "We will meet the target when circumstances allow."

(BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation)


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