Tuesday, November 18, 2014

A low R&D economy

The Herald this morning reports that New Zealand is near the bottom in global R&D spending:

New Zealand's world ranking for research and development spending continues to drop, despite increased incentives for companies to invest, according to a report by Grant Thornton, which puts New Zealand near the bottom of the table.

Paul Kane, spokesman for the global business consultancy, said the number of companies in New Zealand that expected to increase their spending on research and development had dropped significantly, with just 12 per cent of firms expecting to increase their spending in the next year.

"We're really at the bottom of the table, we're fourth from the bottom behind Estonia, Argentina and Russia, and we've been steadily dropping," Kane said.

Economic Development Minister Steven Joyce is in full denial mode, saying that this doesn't reflect what he's seen. From which we can conclude that he did not read his own department's Briefing to the Incoming Minister, which explicitly says (in bold, so the Minister won't miss it) that NZ's level of R&D investment is "low by international standards". Its also very clear about who is at fault:
While New Zealand is spending a lot more on science and innovation, our investment is still very low when compared with the small advanced economies. This is true in both absolute terms (the total that we spend) and in relative terms (the size of our science and innovation investment relative to our GDP). The 1.28 per cent of GDP New Zealand spends on science is well below the OECD average of 2.06 per cent. There are many reasons for our comparatively low science spend, although a significant portion of the disparity is due to our low investment in the business sector.

According to the BIM, the government wants to increase business-sector R&D spending. Perhaps the first stage to doing that is admitting that we have a problem, rather than trying to deny it.