Innovation in NZ: 2003
The Innovation Survey 2003 is the first survey of its type to be conducted in NZ. The survey is designed to develop an understanding of the contribution that technological innovation makes to the NZ economy. It does this by looking at the level and characteristics of innovative activity in NZ businesses.
Innovation is defined as: the introduction of a new or significantly improved product or service to the market; or the introduction of a new or significantly improved process within a business. Innovation could be the result of the introduction, adaptation or adoption of new knowledge or technological developments. It could also be the result of the combination of existing technologies in novel ways.
Rate of Innovation
Forty-four percent of NZ businesses reported innovation activity during the last three years. The likelihood of engaging in innovative activities was greater in larger businesses. Fifty-nine percent of businesses with more than 50 employees recorded innovation activity, compared with 50 percent for businesses with 30 to 49 employees and 40 percent for businesses with 10 to 29 employees.
The proportion of those innovative businesses who considered their innovations as being successfully carried out (as opposed to being ongoing or abandoned) was similar across all business sizes (91 percent). There was variation across industries in the proportion of businesses with innovation activity. The highest proportion (57 percent) was recorded in the manufacturing industry, closely followed by finance and insurance (55 percent). The lowest proportion (25 percent) was recorded in the construction industry.
Types of Innovative Activity
Businesses can engage in a number of activities that give rise to innovation, through development or improvement of products, processes or services. These activities can occur within a business, or be acquired from other businesses. Survey results indicate NZ businesses spent $1.8 billion on innovation activities in their last financial year, representing 1.5 percent of total operating expenditure and expenditure on fixed assets over the same period.
The most prevalent type of innovation activity was research and development (R&D) undertaken within the business. Seventy-six percent of all businesses who undertook some sort of innovation activity indicated they carried out internal R&D. Other forms of internal innovation activities used by most businesses included staff training (60 percent), acquiring enabling equipment (59 percent), marketing (54 percent), and other supporting activities (58 percent).
Less common was the acquisition of R&D or other types of enabling knowledge from organisations outside the business. Only 23 percent of businesses indicated that they had acquired R&D externally.
Outcomes of and Barriers to Innovation
The actual outcomes of innovation activities may or may not be the same as the intended results when the innovations were begun. This survey focused on the achieved outcomes of innovations which had been actually put in place, as opposed to those in progress or abandoned.
Eighty percent of businesses which had introduced innovations in the last three years reported an increased range of goods and services as a result. Most businesses also reported increased profitability (79 percent), improved efficiency (75 percent), and new or expanded markets within NZ (64 percent). Thirty percent reported outcomes resulting in new overseas markets, reduced environmental impact (21 percent), or reduced energy consumption (18 percent).
Fifty-six percent of all businesses surveyed rated a lack of management resources as the biggest barrier to innovation, hampering it to a high (18 percent), medium (22 percent) or low (16 percent) degree. Other factors rated by most businesses as hampering innovation were the costs to develop new products, processes or services (53 percent), and lack of appropriate personnel (51 percent). The availability or cost of intellectual property rated as the lowest impediment to innovation, with only 23 percent of businesses identifying this as hampering innovation activity.
Contact for Enquiries
The Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington
Tel: 0800 00 83 33
Fax: +64 4 894 0720
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