June 13th, 2024

New Zealand's business sector R&D investment hits record $3.7 billion

A significant $540 million increase in research and development spending highlights growth in New Zealand’s business sector, led by services industries.

In terms of employment, the R&D sector saw wages and salaries account for 60% of the total expenditure. (Stock photo: Chokniti Khongchum via Pexels)".
In terms of employment, the R&D sector saw wages and salaries account for 60% of the total expenditure. (Stock photo: Chokniti Khongchum via Pexels)".

Research and development (R&D) spending in New Zealand's business sector surged to a new high of $3.7 billion in 2023, marking the largest annual increase since consistent records began in 2018, according to the latest data from Stats NZ.

The $540 million increase (17%) from 2022 was predominantly driven by the services industries, which themselves saw a $331 million (15%) rise. Notably, sectors such as computer services, wholesale trade, and scientific research were key contributors to this growth. Out of 13 surveyed industries, 12 reported higher R&D spending compared to the previous year.

Despite a 2.3% decline in the number of businesses conducting R&D, dropping to 2,286 in 2023, the average R&D expenditure per business escalated significantly from $1.3 million in 2022 to $1.6 million in 2023 — a 20% increase.

Ricky Ho, Business Performance Manager at Stats NZ, said: “We are seeing continuous growth in R&D expenditure, and the number of businesses doing R&D has remained fairly stable over the last three years. This suggests that businesses who are doing R&D are investing more.”

In terms of employment, the R&D sector saw wages and salaries account for 60% of the total expenditure, amounting to approximately $2.2 billion, an increase from $2.0 billion in the previous year. The number of full-time equivalent (FTE) staff involved in R&D remained stable, but the composition shifted towards more research-focused roles. The number of researchers soared by 23% to 14,000 FTEs.