In the last five years, research and development (R&D) expenditure by the services industries has more than doubled, whereas it has only risen 12 percent for the manufacturing industry, Stats NZ said today.
| Industry group | Primary | Manufacturing | Services |
| 2016 | 6 | 42 | 52 |
| 2017 | |||
| 2018 | 5 | 32 | 64 |
| 2019 | 4 | 32 | 64 |
| 2020 | 4 | 30 | 66 |
| 2021 | 3 | 26 | 70 |
In 2021, R&D undertaken by the services industries accounted for almost three-quarters ($1,999 million) of total business R&D expenditure, compared to just over one-half ($835 million) in 2016. Conversely, the manufacturing industry accounted for one-quarter ($753 million) in 2021, compared to 42 percent ($671 million) in 2016.
"Since 2016, we have seen a shift in how much R&D is being undertaken across the New Zealand economy, with the services industries becoming more prominent," business performance statistics manager Ricky Ho said.
Services businesses make up a large proportion of the New Zealand economy, and include a wide range of industries, such as construction, wholesale trade, healthcare, and ICT (information and communications technology).
Purpose of research/sector that benefits from the R&D
When a business carries out R&D, it could be for the benefit of its own business, or for that of other businesses, industries, or sectors.
Almost 20 percent ($553 million) of total business expenditure on R&D in 2021 ($2.8 billion) was for the purpose of the information and communication services sector.
"While spending on almost all purposes has increased, some, such as spending on information and communications, has increased more than others," Mr Ho said.
In recent years, the largest proportion of total R&D expenditure was intended to benefit the manufacturing industry. However in 2021, R&D for the benefit of information and communications services overtook manufacturing for the first time.
| Purpose/sector that benefits | 2016 | 2021 |
| Primary Industries | 17 | 12 |
| Industrial and infrastructure development: Energy | 2 | 3 |
| Industrial and infrastructure development: Manufacturing | 30 | 18 |
| Industrial and infrastructure development: Construction | 6 | 5 |
| Industrial and infrastructure development: Transport | 4 | 4 |
| Industrial and infrastructure development: Information and communication services | 16 | 19 |
| Society | 10 | 15 |
| Other | 9 | 11 |
R&D for the purpose of the information and communications industry has increased from 16 percent of the total R&D expenditure in 2016, to 19 percent in 2021. However R&D for the purpose of manufacturing has decreased from 30 percent to 18 percent over the same time period.
"Not only has there been a shift in which sectors are undertaking R&D, there has also been a shift in the sector that will ultimately benefit from that R&D," Mr Ho said.
Business sector R&D continues to rise despite COVID-19
Between 2019 and 2021, total expenditure on R&D by the business sector increased 18 percent, to reach $2.8 billion.
Over the same period, the number of full-time equivalent (FTE) people working on business R&D increased 21 percent, and the number of businesses undertaking R&D increased 11 percent.
"Even during COVID times, R&D expenditure has continued to increase at a faster rate than many inflation measures, so businesses appear to be undertaking more R&D," Mr Ho said.
Information about the survey
The 2021 R&D survey was conducted between August and December 2021, for the business sector only. Businesses were asked to report on the last financial year for which information was available as at August 2021.
The R&D survey usually runs every two years (even years), but in 2019 and 2021, special business sector-only iterations were run. This was to help measure any impacts from the research and development tax incentive, which came into effect for the 2019/20 April tax year. The government and higher-education sectors are surveyed every two years and will be included in the 2022 survey.
Data on expenditure refers to R&D carried out within the business, as opposed to the business funding another entity to undertake R&D.
