Sharechat Logo

NZ businesses investing more in R&D and expansion but numbers still low

Tuesday 20th March 2018

Text too small?

New Zealand businesses are investing more in their growth and research and development but while the number of businesses carrying out R&D is at a 10-year high only 11 percent of firms are doing it. 

According to Statistics New Zealand's Business Operations Survey, one in nine businesses with six or more employees undertook research and development in the year to August 2017 versus 7 percent in the year to August 2016 and 9 percent in the year to August 2015. Total R&D expenditure by businesses was $1.8 billion versus $1.6 billion in the prior comparable period. 

Under Labour's coalition agreement with New Zealand First, the government is targeting an increase in total spending on R&D to reach 2 percent of GDP in 10 years and work is currently underway to overhaul New Zealand's R&D regime. Total R&D spending - including both the private and public sector -  is currently around 1.3 percent of GDP, according to 2016 data from Statistics New Zealand. Of that, 0.6 percent is carried out by business, 0.3 percent by the government and 0.4 percent by higher education. 

In terms of barriers to innovation, 18 percent of those surveyed in today's data said the cost to develop or introduce impacted innovation to a high degree and 17 percent cited a lack of management resources.  

Regarding expansion, 33 percent of businesses invested in expansion in the year to August versus 30 percent in the prior year and 29 percent in the year to August 2015.  

Investment in expansion can include purchasing assets (such as land and machinery). It can also include entering into new markets or investing in innovation. 

Over the past decade, the industries with the greatest growth in expansion rates over the past decade were the construction, and information media and telecommunications industries.

According to Stats NZ, in the construction industry, 43 percent of businesses reported investing in their expansion in 2017, compared with 20 percent in 2009 and 24 percent in 2007. 

“The construction industry saw a significant decline in expansion rates in 2009 after the global financial crisis,” business performance manager Laura O'Leary said. “The increased demand for construction work in recent years means businesses need to grow to keep up with the workload.”

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares rise as optimism over US-China trade deal lingers; Fletcher gains
NZD under pressure against Aussie as investors cheered by easing of trade jitters
PFI properties’ valuation rises 5.5% to $1.32 billion
Broader definition of workplace harm in new govt health & safety strategy
MBIE officials grilled on terms of Westland Milk loan
Trade Me suitor Hellman & Friedman drops out
Hydrogen not a short-term option for Huntly - Genesis
Kiwibank says customers have a dwindling need of physical branches
Buying off the plans driving down KiwiBuild cost to govt: HYEFU
Fiscal policy to slow growth over next five years, despite surpluses

IRG See IRG research reports