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NZ's R&D future 'stark': Cunliffe

NZ NewswireNZ Newswire 7/04/2016 Fiona Rotherham
David Cunliffe © Getty Images David Cunliffe

New Zealand businesses spent more on research and development in 2015 but the number of firms doing so has been static for some years and R&D spend as a percentage of overall innovation actually fell, a new survey shows.

The Business Operations Survey: 2015 shows total R&D spending rose by 15 per cent to $1.4 billion from 2014 and the "Innovation Rate" increased for the first time since 2009 to 49 per cent, up 3 per cent.

However the R&D spend within the total amount spent on product development dropped to 52 per cent, 4 per cent down on 2013. Product development expenditure also fell.

Labour's Science, Innovation, Research and Development spokesman David Cunliffe said the overall rise in R&D expenditure is just a drop in the bucket when the big picture is considered.

"In essence, not much has improved and for me the big picture is very stark," he said.

He points to the timing of the survey release on Wednesday after 180 Fisher & Paykel Appliance workers had been told they had lost their jobs, with manufacturing now being carried out mainly in Thailand.

New Zealand business R&D still ranks in the bottom quarter of the OECD and far below leading small countries, he said. New Zealand business expenditure on R&D (BERD) is 0.54 per cent of GDP, a third of the OECD average of 1.62 per cent which places New Zealand in the bottom quarter of the OECD.

However, the figures Cunliffe is quoting - the latest available - are from 2014.

While other OECD countries have updated their figures to 2015 and do so annually, New Zealand only provides BERD figures every two years and won't update them until next year, so they don't yet reflect whether the latest expenditure rise has significantly shifted the dial.

Science and Innovation Minister Steven Joyce said New Zealand has historically had low levels of R&D conducted by businesses compared with most other OECD countries, but the latest survey confirms that is now changing.

The annual Business Operations Survey is conducted on 7,500 companies nationwide as a representative sample of the 39,000 companies employing six employees or more.

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