Research, Science and Innovation Minister Megan Woods has welcomed news that total R&D spending across New Zealand grew by $758 million to $3.9 billion, or 1.37 percent of GDP.
The Research and Development Survey 2018, released by Statistics New Zealand, shows business expenditure on R&D drove the growth, increasing by more than half a billion dollars over the past two years.
- total research and development (R&D) expenditure increased 24 percent from 2016, to $3.9 billion
- R&D expenditure by businesses reached over $2.1 billion, accounting for 55 percent of total R&D expenditure
- R&D expenditure by service industries increased $534 million (64 percent) from 2016
- R&D expenditure as a proportion of GDP was 1.37 percent.
“It’s great to see business innovation growing, and I’m particularly pleased to see business R&D spending increasing by $548 million,” says Megan Woods.
A key Government priority is to raise the level of R&D spending to 2% of GDP over the next 10 years. Increasing business R&D expenditure plays a vital role in meeting this target.
But while R&D spending has increased to 1.37% of GDP, Dr Woods said there is still work to be done to reach the Government’s 2% target.
To support this it will be introducing the R&D Tax Incentive next month, enabling more businesses to undertake R&D.
The incentive will have a broad reach across our economy – from start-ups to established R&D performers – to encourage businesses of all sizes and scales to undertake R&D, Dr Woods said.
“Lifting the amount NZ businesses are spending on R&D will help diversify our economy by encouraging new industries and companies to innovate, move further up the value chain and deliver higher wages for Kiwis.
“Businesses spending a minimum of $50,000 on eligible R&D will receive a 15% tax credit. An estimated 2,000 to 3,000 businesses will be able to benefit from the new R&D tax incentive.
“The Tax Incentive is part of a wider economic strategy to help improve the well-being and living standards of New Zealanders through better productivity, sustainability and inclusive growth.”
Callaghan Innovation will continue to work with its customers on Growth Grants to transition them smoothly on to the R&D Tax Incentive, as well as encouraging uptake of the scheme to all businesses, Dr Woods said.
Source: Minister of Science, Research and Innovation