Business R&D spending increases, but costs, resources seen as impediments

New Zealand businesses increased their spending on research and development in 2015, although the actual percentage of firms carrying out R&D remained small while cost and lack of management resources remained as barriers to innovation, a new survey shows.

The BusinessOperations Survey: 2015 shows total R&D spending rose by about $200 million in 2014 to $1.4 billion, with the service sector outpacing manufacturing by $562 million to $494 million. Those two sectors accounted for 75% of the total spend, the Statistics New Zealand survey shows.

By contrast, agriculture, forestry and fishing businesses spent $51.2 million on R&D last year, a 42% gain from 2014. The proportion of businesses that undertook R&D rose to 9% rom 8%.

The survey covers businesses with six or more employees, with the total rising to 39,003 last year from 37,944 in 2014. The gain was led by growth in the number of businesses with six to 19 employees, while those with 100-plus recorded only a slight increase.

Construction added the most new businesses, 354, bringing the total to 4371 while accommodation and food services added 180 to 4974. The total number of businesses fell in mining, manufacturing, education and training, healthcare and social services.

When asked about barriers to innovation, the cost to develop or introduce was rated a high degree of impediment by 17% of those surveyed, down from 19% in 2013. Lack of management resources was second-highest on that basis, with 16% seeing it as a barrier, up from 15% in 2013. Access to intellectual property rights rates the lowest in terms of being a barrier.

The survey gives s snapshot of the makeup of New Zealand businesses. Last year those employing 100 or more workers accounted for 46% of all employees but only 0.4% of businesses. Those with fewer than six employed 11% of workers while the six to 19 employee group made up 7% of businesses and 18% of workers.

The survey shows trade in goods and services to China last year rose 61% from 2011 to $11 billion in 2015, yet only 7.8% of businesses reported any trade to China.

(BusinessDesk)