Published on the 29/05/2013 | Written by Newsdesk
New Zealand continued to innovate in a challenging global financial environment but more needs to be done, particularly in bringing new products to market…
IBM today released its 2013 IBM Innovation Index of New Zealand showing that New Zealand’s overall innovation rate increased three per cent in the four years to 2011.
The IBM Innovation Index is a multi-indicator study that tracks the shape and rate of local innovation, combining official data on Research and Development (R&D), Business Innovation and Intellectual Property to present a detailed view of innovation performance by industry.
For New Zealand the Index shows that local R&D expenditure grew strongly between 2007 and 2011 at an average rate of 7.6 percent per annum, largely driven by the public sector. The equivalent of 4600 full-time R&D jobs were created during this period. However, when the economy started to recover during 2011-12, the growth in R&D expenditure slowed to an average of 3.7 percent per annum. As a result, New Zealand’s R&D intensity (the proportion of GDP spent on R&D) remains low compared to other Organisation for Economic Co-operation and Development (OECD) economies.
“Increasing investment in R&D during the global recession buoyed our overall innovation rate, but we are yet to catch up to comparable nations’ innovation intensity. Seeing business spend more on R&D is a positive sign, and extra collaboration across New Zealand’s domestic and international innovation ecosystems is required to take this research to market,” says Dougal Watt, IBM New Zealand’s chief technology officer.
Public sector investment drove R&D growth during the global financial crisis (GFC) but since 2010 most of the growth is due to private sector spending, especially from manufacturing companies. Nearly a third of private sector R&D expenditure is directed towards improving manufacturing, followed by ICT second and primary industries third.
Although private sector R&D spending increased after 2010, the overall rate of Business Innovation reported by companies remains flat. Business Innovation reflects improvements in goods and services, business operations, organisational strategy and marketing. Of these, only the marketing measure showed a positive change as more companies introduced new and improved methods to increase the appeal of goods and services.
“Overall Business Innovation remained consistent, however it would be preferable for this to also increase as transforming areas like supply chain processes, or creating new goods and services are necessary to commercialise the results of R&D,” concluded Watt.
By using the IBM Innovation Index data visualisation tool available at www.innovationindex.co.nz/#allindustries you can ‘drill down’ into 18 industries to see what is driving changes in innovation over time. Choose your industry at the top of the pie chart and click on the various segments for more information.
