Quick Dips

Dismal R&D Figures

Over the last decade, real expenditure on research and development in New Zealand has declined by 27%, whereas spending in other OECD countries has increased by 52%.

If New Zealand's R&D effort had kept pace with other OECD countries, we should have spent something like NZ$1.4 billion in 1989. The actual figure, however, was half that, at NZ$634 million.

These are amongst some of the key statistics in a report recently released by the Ministry of Research, Science and Technology. It draws on OECD statistics to compare R&D spending in New Zealand with spending in other industrialised nations.

In order to provide an appropriate basis of comparison, a group of six reference countries was chosen: Australia, Denmark, Finland, Ireland, Norway and Sweden. These reference countries more closely approximate New Zealand conditions than do other OECD countries.

Looking at the level of R&D expertise in the workforce, the report found that New Zealand had 3.2 research scientists and engineers (RSE) for every 1,000 people in the labour force. This was only two-thirds the level of other OECD countries, with only Spain, Portugal, Greece and Turkey having lower proportions of research scientists and engineers than New Zealand. However, these four countries have been increasing this proportion at between 5% and 10% a year over the last few years, and will soon surpass New Zealand if this trend continues.

Government R&D expenditure in New Zealand fell from 0.84% of GDP in 1981 to 0.57% in 1989, a decline of 24% in real terms, though recent figures indicate that this decline has hopefully been arrested. The reference countries, on average, spend 0.73%

The figures for New Zealand business R&D expenditure are even worse. This has fallen from 0.52% of GDP to 0.29% over the same time span. Other OECD countries spend four times this proportion. In addition, New Zealand spends a relatively small proportion of its business R&D on high technology industries.

Considered as a proportion of sales, New Zealand's industrial R&D fares just as badly. Even when figures are adjusted to take into account the differences that exist in industry structure, this country still spends only a third of the amount that other OECD countries do.