Research and Development Survey 2006
The Research and Development Survey 2006 (R&D Survey 2006) was a joint survey with the Ministry of Research, Science and Technology (MoRST). The R&D Survey measures the level of research and development activity, employment and expenditure by business sector enterprises, government departments, government-owned trading entities, and universities.
The R&D Survey is carried out biennially by Statistics New Zealand. A more detailed report on the results of the 2006 survey will be published by Statistics NZ in September 2007.
Guide to interpreting the data
The following summary highlights the main points to consider when analysing the R&D Survey 2006 results. A full technical description is contained in the Technical notes.
Definition of R&D
Statistics NZ uses the following definition of R&D which is based on international best practice: “Research and experimental development comprises creative work undertaken on a systematic basis in order to increase the stock of knowledge. Any activity classified as R&D is characterised by originality. Investigation is a primary objective.”
Reference period for the survey
The reference period for the business and government sector is for the last financial year that falls between 1 October 2005 and 30 September 2006. The predominant financial year for the business sector is the year ended 31 March 2006, while for the government sector it is the year ended 30 June 2006.
The financial year for universities is the year ended 31 December. In the previous R&D Survey 2004, data was collected for the financial year ended December 2004. The university sector reference period for the R&D Survey 2006 has been set back to the year ended December 2005. Because of this change, there is only a one year difference between the two reference periods for the university sector in this publication. This should be taken into account when analysing the change between the two reference periods for total R&D expenditure, as it is not a full two-year period for all three sectors. See the Technical notes for more explanation.
Published industries
This publication uses the same published industries as in the Research and Development in New Zealand 2004 report which is based on the classification and frameworks recommended by the Organisation for Economic Co-operation and Development's (OECD) Frascati Manual 2002. This allows for international comparability with other OECD member countries' surveys. For more information on this change, and sector and industry breakdowns, see the Technical notes.
R&D expenditure by sector
Total R&D expenditure in the 2006 reference period was $1,826 million. This represents an increase of 10.0 percent or $166 million from the 2004 reference period.
Survey results show that total R&D expenditure by the business sector was $763 million. Compared to 2004, this is a 12.7 percent increase. The manufacturing and services industries contributed to this growth, increasing 18.5 and 19.6 percent, respectively.
Government sector R&D expenditure was $469 million, an increase of 1.8 percent from 2004. The smaller increase compared with the business sector can be explained by the privatisation of a Crown Research Institute division and less R&D being undertaken by government agencies.
Due to the change in the reference period for the universities (detailed in the Technical notes), there is only a one year difference between the two reference periods for the university sector. Despite this, the university sector experienced strong growth, with expenditure increasing 13.6 percent to $593 million. The main driver of this growth was increased government funding.
R&D as a proportion of gross domestic product
Total R&D expenditure represented 1.17 percent of New Zealand’s gross domestic product (GDP) in 2006. This is similar to the 1.19 percent of 2004. Between the 2004 and 2006 March years, New Zealand’s GDP current price expenditure measure increased 11.9 percent. It should also be noted that the change in the reference period for the university sector in 2006 is likely to have slightly under-estimated the overall growth of R&D as a proportion of GDP between the two years.
Research and development expenditure within the university and business sectors kept up with the overall growth in the New Zealand economy between the 2004 and 2006 reference periods, remaining at 0.38 and 0.49 percent of GDP, respectively. Government sector R&D decreased as a proportion of GDP during the same period, from 0.33 percent down to 0.30 percent.
New Zealand’s total R&D expenditure continues to be relatively low when compared with other countries in the OECD. Australia reported R&D expenditure as 1.76 percent of GDP in 2004, and the OECD average was 2.21 for the same period. International figures for the 2006 reference period were not available when this publication went to print.
Source of funds for R&D
New Zealand's central and local government remains the largest funder of R&D, funding a total of $785 million or 43.0 percent of all R&D undertaken in 2006. This is an 8.0 percent increase on the 2004 figure of $727 million. New Zealand businesses are fast approaching the level of central and local government funding, accounting for 41.2 percent of total R&D expenditure for the 2006 reference year. In total, the business sector funded $753 million worth of R&D, an increase of 18.6 percent from 2004. The proportion of R&D expenditure funded by New Zealand universities and overseas funding sources in 2006 was 8.9 and 5.2 percent, respectively.
R&D by purpose of research
Research and development expenditure can be broken down by purpose to highlight the main socio-economic objectives that New Zealand R&D is directed towards. The most significant purpose of New Zealand’s R&D expenditure in 2006 was industrial development (at $360 million), with the business sector the major contributor. Expenditure on primary industry purposes, namely agriculture, forestry and fishing, was the second largest purpose of research and increased 1.3 percent between the 2004 and 2006 reference periods to reach $333 million. Over the same period, total R&D expenditure directed towards health increased 21.9 percent to $269 million.
Type of research and development activity
There are three main types of research and development activity identified in this release.
Basic research is carried out to pursue a planned search for new knowledge with either a broad underpinning reference, or no reference, to a likely application.
Applied research is investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective and determines possible uses of basic research.
Experimental development is systematic work, drawing on knowledge gained from research and practical experience that is directed at producing new materials, products and devices; installing new processes, systems and services; or improving substantially those already produced or installed.
Of the total expenditure on R&D in 2006 ($1,826 million), $551 million was attributed to basic research, $647 million to applied research, and the remaining $628 million to experimental development.
The majority of research conducted in the business sector was in the experimental development stage, with 57.2 percent in this category. A further 32.7 percent was applied research and 10.0 percent was basic research.
The most significant type of R&D for the government sector was applied research at 44.2 percent, while only 15.5 percent of the government sector R&D was experimental development. Basic research made up 48.1 percent of the university sector’s R&D, while 31.9 percent was applied.
For technical information contact:
Dan Martin or Hamish Hill
Wellington 04 931 4600
Email: info@stats.govt.nz