Comments

David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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30/3/15

Broader R&D strategy needed


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The Research and Development Survey released last week by Statistics New Zealand showed some good news but falling R&D expenditure as a proportion of GDP is of concern – a broader R&D strategy is needed from Government to improve this, say the New Zealand Manufacturers and Exporters Association (NZMEA).

NZMEA Chief Executive John Walley says, “Total R&D as a percentage of GDP fell from 1.25% in 2012, to 1.13% in 2014. To put this in perspective, the OECD average increased from 2.33% in 2012, to 2.4% in 2014. On the positive side total business R&D increased $53m (4%) from 2012 to 2014, however Government R&D expenditure fell $40m (7%) in the same time period.”

“Investing less than comparable countries in R&D as a percentage of GDP is a negative leading indicator – R&D drives complexity, capability and innovation in our economy, all things we need to play a competitive game in the future.”

“In a modern economy products and services increasingly rely on R&D and intellectual property to continually improve and innovate, this is particularly true for the high tech and elaborate sectors.”

“Manufacturing plays a disproportionately important part in our overall R&D expenditure (contributing 20% of total R&D); although manufacturing R&D spending fell $14m (3%) between 2012 and 2014. In recent years many have deferred investment of out necessity; due to lower returns from an unfavourable policy environment driving an overvalued currency, and global market conditions - a necessary deferral but it does risk future competitiveness.”

“A broader, more inclusive R&D strategy from Government, such as R&D tax credits would better encourage more businesses to invest more in R&D – with positive flow on effects to growth, incomes and employment. Such policies to encourage R&D are common place around the world, and we need to ensure New Zealand has a level playing field for our producers on the world stage.”

“The current grant system works for those who are able to win funding, but not for those who can’t for a variety of reasons; it has long been recognised that the reach of grant systems is limited. Some recent changes around how early stage companies can claim tax back early for R&D expenditure is a good step forward for some, but more needs to be done to support R&D in later stage companies that are paying tax.”

“A broader approach that does not need to pick winners could be far more effective in improving R&D spending, and consequently complexity, innovation and living standards. Investment in R&D now greatly increases our future ability to add-value to products and services” says John Walley.



tags: r&d, research, development, innovation, tax, tax credits, complexity, investment

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