Businesses increase R&D

Tuesday April 11, 2017 Julian Williams

Businesses expenditure on research and development (BERD) in 2016 is up $356 million (29 percent) compared with 2014. These results, from the recently published 2016 Research and Development (R&D) Survey of Statistics New Zealand, show a positive outlook for firms because R&D supports innovation, which is a key driver of economic growth.


BERD provides firms with new knowledge and builds workforce expertise. Together with foreign-sourced technology, these enable new goods and services to be developed for demanding local and export markets.


The overall increase in BERD was mainly spread across rises in computer services, up $125 million (40 percent); machinery and equipment manufacturing, up $105 million (37 percent); metal product manufacturing, up $39 million (139 percent); and food manufacturing, up $29 million (36 percent).


BERD in 2016 was 0.54 percent of GDP. This lags many other nations as shown below.



Source: OECD Main Science and Technology Indicators database


International differences in BERD are partly due to different industrial composition, where some nations have a greater concentration of R&D intensive industries. They are also partly due to propensities of firms in the same industries to invest differently in different nations.


Government and tertiary education expenditure on R&D increased $32 million (5 percent) and $143 million (18 percent) respectively. In total, R&D expenditure for the nation increased $531 million (20 percent) from 2014, to $3.2 billion.


Total R&D expenditure in New Zealand was mainly allocated to manufacturing (20 percent); primary industries (17 percent); health (12 percent); information and communication services (10 percent); and environment (10 percent).