R&D: A Worthy Investment for New Zealand Businesses
New Zealand’s Innovation Agency, Callaghan Innovation, has stressed the positives of investing in R&D. Commitment to R&D has shown that within the last decade there has been more and more billion – dollar Kiwi companies.
The average business expenditure on R&D is approximately 2.4% of the GDP. New statistics from Statistics NZ shows that New Zealand businesses spent over $2.1 billion on R&D alone. This is an increase of over half a billion dollars within a two year period.
It is predicted that R&D spending will hit the Government 2% of GDP within the next decade. Likewise, private returns for R&D are 20% – 30% higher than the return on investment on physical capital.
R&D can be seen as a survival tool for many businesses as product innovation would allow them to increase its export-earning potentials. Many more industries are now targeting a global audiences and a new generation of consumers. With an ever-changing global environment and technology changing so rapidly there is no surprise R&D is a massive asset to any business.
The government is not preparing to implement a 15% R&D tax credit, which will act as a further aid to help businesses grow. Eligible business should not start preparing for the next financial year.
For more information on whether your company is eligible for the R&D tax credit click here