February 21, 2024

We are creating some awesome events for you. Kindly bear with us.

Investing on R&D will reap rewards for NZ businesses

Credit: Callaghan Innovation

Callaghan Innovation, New Zealand’s Innovation Agency, stressed the virtues of investing in research and development (R&D), highlighting the emergence of billion-dollar Kiwi companies in the last decade.

As reported, commitment to cutting-edge R&D is the common factor among the country’s biggest, newest and promising companies.

Throughout the OECD, the average business expenditure on R&D is about 2.4% of GDP.

Newly released figures from Statistics NZ have shown that Kiwi businesses spent more than NZ $2.1 billion on R&D last year, which showed an increase of more than half a billion dollars in just two years.

It is the biggest increase in a decade, and at this rate, puts the R&D spending on track to hit the Government’s 2% of GDP target within the next decade.

Whether big or small, the evidence suggests companies that prioritise investment in R&D reap the rewards.

Private returns for R&D are around 20% – 30%, much higher than the return on investment (ROI) on physical capital.

What is R&D?

R&D at its most basic level is the investigation on how to be more innovative.

This means applying the type of disruptive technologies such as machine learning, automation, cloud computing, big data, and the genetic revolution to the businesses.

Many businesses still look at R&D as something that they would love to do, but cannot afford to do so. But the truth is they cannot afford not to.

R&D for Survival

Businesses should think about the product innovations that would allow them to take things to the next level, in terms of value of the business and its export-earning potential.

R&D is also critical in preparing for an increasingly uncertain future.

The country has an aging population that is growing old in a warming world, which faces monumental environmental challenges.

The core industries are being questioned by a new generation of consumers. And technology is changing so rapidly that there is a need to run faster in order to keep up.

Addressing these would require established businesses and start-ups to focus on solutions for global problems.

This can be done by harnessing the great science and research going on in the country to go after high-value international markets.

But despite investor enthusiasm for new, innovative companies, many of them still struggle to get all the funding they need.

This happens particularly as they reach their second phase of growth and seek to raise funding between NZ$ 2 million and NZ$ 20 million.

Latest data shows that many businesses have gotten the message.

R&D in the services industries has increased by 64%. Add to that the significant increase in spending in the ICT as well as in commercial and tourism services sectors.

There is still a lot of catching up to do, however, to match global competitors and own aspirations, especially in the primary and manufacturing sectors.

What now?

The Government is preparing to implement a 15% R&D tax credit, which will act as a further incentive for businesses to invest in the innovations that will drive their future growth.

Eligible businesses should now start preparing for the tax credit covering the 2019/2020 income year.

Within the next few months, a new initiative will be launched to help supercharge innovation in New Zealand.

Scale-Up NZ is a free online platform that will make it faster and easier for local people and organisations to find and connect with the people, capital and other help they need to innovate and grow, both here and offshore.

While the country does not yet match its peers internationally, the gap is starting to close.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

PARTNER

CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

PARTNER

Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

Send this to a friend