MIL OSI – Source: Statistics New Zealand – Business expenditure on R&D continues to rise

Businesses are spending more on research and development (R&D) and this expenditure is expected to rise again in 2015, Statistics New Zealand said today.

Business expenditure on research and development (BERD) increased by $53 million to $1,246 million in 2014. The greatest increase came from the services industry, partly offset by decreases in R&D expenditure by the primary and manufacturing sectors (down $33 million and $14 million, respectively).

Total expenditure on R&D in New Zealand remained around $2.6 billion in 2014, despite the increase in BERD, as R&D expenditure by the government and higher education (eg universities) sectors fell.

As well as the increase in business expenditure, the 2014 survey also found the number of businesses performing R&D had increased. Fifty-eight more businesses performed R&D in 2014 than in 2012, taking the total to 1,549.

“Computer services is now the biggest spender on R&D of any business type, and has surpassed machinery and equipment manufacturing,” business performance manager Jason Attewell said. “Service industries account for two-thirds of the New Zealand economy, but only some of these businesses have R&D activity.”

Within the services industry, computer services had the largest increase – up from $221 million in 2012 to $311 million in 2014, a 41 percent increase. This includes activities such as hardware and software development, programming, and consulting services.

The Research and Development Survey measures expenditure on R&D based on international definitions. However, it also asks about respondents’ expectations of future R&D expenditure.

“Almost half of businesses in the survey expect to increase their R&D activity in the coming year. A further one-third expect their level of activity to remain the same,” Mr Attewell said.

The Research and Development Survey is conducted every two years. See Research and Development Survey: 2014 for tables with more detailed industry and sector breakdowns.

Selwyn Manning, BCS (Hons.) MCS (Hons.) is an investigative political journalist with 23 years media experience. He specializes in reportage and analysis of socioeconomics, politics, foreign affairs, and security/intelligence issues. Selwyn has extensive experience as a commentator and has provided live political analysis to a wide range of television and radio organizations broadcasting in New Zealand, Australia and globally including the BBC (Five Live, London) and BBC (World Service). He is currently a correspondent to Australia's FiveAA radio, and is a regular live-on-air panelist on Radio New Zealand's The Panel with broadcaster Jim Mora.