Computer services key as NZ businesses cash in on extra R&D spend

“Computer services is now the biggest spender on R&D of any business type, and has surpassed machinery and equipment manufacturing."

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

Reports show that 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,” says Jason Attewell, Business Performance Manager, Statistics New Zealand.

“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," Attwell adds.

"A further one-third expect their level of activity to remain the same."

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