Kiwi R&D spend rising, but still below OECD average

The Rakon factory in Mt Wellington, Auckland. Kiwi businesses spent $1.2 billion on research and development last year. Photo / Natalie Slade

New Zealand's research and development spend rose to $2.6 billion last year but remains far below many other OECD countries as a proportion of gross domestic product.

Statistics New Zealand data out today showed government, business and university spending directed towards innovation has increased by 9 per cent since 2010.

While the business sector lifted its research and development (R&D) expenditure by 23 per cent to $1.2 billion last year, government spending fell by 5 per cent to $596 million.

Universities in the higher education sector increased their R&D spend by 4 per cent to $836 million in 2012.

Statistics NZ spokesperson Hamish Hill said R&D included a range of activities from 'blue-sky' research through to development of new consumer products, or more efficient ways to produce them.

"R&D is seen internationally as a key driver of economic growth," he said.

"Even during tougher economic times investment in R&D has been sustained in most Organisation for Economic Co-operation and Development (OECD) countries"

New Zealand's R&D spend as a proportion of gross domestic product (GDP) has been static since 2010, representing 1.27 per cent of GDP, Hill said.

That puts us lower than many other countries in the OECD which are of similar size or with which New Zealand is often compared.

Across the OECD, the benchmark for R&D spending is 2.38 per cent of GDP.

Australia, Singapore and the US spend a little over 2 per cent of GDP, with Israel above the 4 per cent mark.

Hill said one "noteworthy" figure in the latest statistics was the jump in business R&D spending, something which could be seen across almost all industries.

Government funding of R&D in the business sector has increased about 70 per cent, to $146 million, up from $82 million in 2010.

Most of the government's own R&D work is carried out by Crown research institutes.

The Research and Development Survey 2012 was conducted jointly by Statistics NZ and the Ministry of Business, Innovation and Employment.