New Zealand investment in research and development half of other leading economies
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Loading... - pederson emilie
- 10 May 2023
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Investing in research and development (R&D) can bring numerous benefits for companies and investors alike. However, in New Zealand, the low level of investment in R&D, compared to other leading economies, poses a risk of stagnation.
Between 2020 and 2022, spending on R&D in New Zealand increased by 11 percent, totaling $5.2 billion. This investment was primarily led by the business sector, with higher education and government following suit. Despite this, New Zealand's R&D spending remains about half of other leading economies. In fact, the average R&D expenditure as a proportion of GDP across OECD countries in 2020 was 2.74 percent, while New Zealand only spent 1.46 percent.
According to Nick Robertson, a senior consultant at economic research consultancy BERL, New Zealand's lack of investment opportunities for local companies compared to its OECD peers could result in stagnation. He believes that incentivizing R&D investment or reducing financial risks could make it a more attractive option. This would help to shift investment away from unproductive assets such as housing, which only drive up prices, towards more productive investments that will improve productivity and lead to greater wellbeing gains.
Although government funding for R&D efforts by businesses is a good start, there is still more work to be done to encourage investment in R&D. By reducing financial risks or increasing rewards for investors and companies, investing in R&D could become a more attractive option and help drive New Zealand's economy forward.
