Getting a government research and development grant almost doubles the likelihood a company will introduce a world-first innovation, but there is also evidence Kiwi firms are not good at commercialising clever ideas, a study shows.
The Government's Business Growth Agenda targets increasing business expenditure on R&D, which is low by OECD standards, to 1 per cent of gross domestic product by 2018. The ultimate goal is to lift productivity and for Kiwi companies to make more profits.
However, the research shows that while more Kiwi firms are engaging in R&D activity, fewer are introducing new goods and services and they are also earning a smaller share of their revenue from innovative products.
"We have a lot of good ideas, but our weakness is when it comes to turning those ideas into commercial products," said Productivity Commission director of economics and research Paul Conway.
One of two research papers released yesterday by the commission, Motu Economic and Public Policy Research used Statistics New Zealand's Longitudinal Business Database to measure innovative activity. The other studied innovation levels among firms that get taxpayer-funded subsidies compared with those that don't.
