Business R&D spend to continue in spite of COVID-19

Expectations of future research and development (R&D) activity remain steady, despite economic shocks such as the COVID-19 pandemic, Stats NZ said today.

Forty-one percent of businesses in 2020 planned to increase their R&D expenditure over their next financial year. This is similar to the proportion reported each year since 2010.

YearDecreaseStay the sameIncreaseDo not knowNot specified
2010144034102
201216383771
201413364471
201610414361
201812354661
201911344761
202014374171

The most common reason for businesses to carry out R&D has traditionally been to gain entry into new markets, but COVID-19 has also impacted on businesses’ R&D intentions.

“COVID-19 forced many changes to the ways businesses worked, including what they produce and how they produce it, and their focus for R&D,” business statistics manager Geraldine Duoba said.

Information collected in the Business operations survey 2020 showed that 24 percent of businesses who anticipated their R&D spending would change due to COVID-19, expected R&D spending to increase. The most common reason cited (70 percent) was a change in demand for existing goods and services.

Businesses have followed through with their R&D intentions, with business sector R&D expenditure increasing each year. In 2020, businesses in New Zealand undertook $2.7 billion worth of R&D activity, compared with $2.4 billion in 2019. R&D expenditure for the sector has more than doubled since 2010.

The research and development survey runs every two years, and surveys the business, government, and higher education sectors, but only the business sector is asked about their R&D expectations for the next financial year. The 2020 survey was conducted from August to December 2020. The 2019 R&D survey was conducted for the business sector only. Data on expenditure refers to R&D carried out within the business, as opposed to the business funding another entity to undertake R&D.

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