Computer services lead R&D spend

BUSINESS spending on research and development (R&D) last year was up almost 30% to $1.6 billion and computer services and machinery manufacturing firms showed the greatest increase.

Despite the rise, New Zealand still lags behind the average for the Organisation for Economic Cooperation and Development (OECD).

Statistics New Zealand data showed businesses spent $1.6 billion on R&D in 2016, up $356 million, or 29%, from 2014, SNZ business performance senior manager Daria Kwon said in a statement.

‘‘While higher R&D spending is a key driver of economic growth according to some studies, it is not a guarantee that a business will be more creative or profitable,’’ she said.

The total R&D spend as a proportion of gross domestic product rose from 1.2% in 2014 to 1.3% in 2016. The OECD average was 2.4%.

Total 2016 spending on R&D by businesses, the Government and higher education was $3.2 billion, up $531 million (20%) from 2014.

By sector, R&D spending rose in the higher education, university sector and government R&D had a modest rise, but the bulk of the overall increase was from business spending.

The computer services sector had the biggest dollarvalue increase within the business sector, up $125 million (40%) to $436 million.

‘‘Computer services firms include New Zealand businesses providing services such as producing and distributing software and web design,’’ Ms Kwon said.

The secondlargest increase in businessrelated R&D spending was in machinery and equipment manufacturing, up $105 million (37%) to $392 million.

Those firms included hightech manufacturing companies developing new products and services for sale here and overseas.