R&D spending – international comparisons show up our big companies
A follow up on the last two posts regarding who’s not pulling their weight in research and development spending.
The graph below shows, by comparison with Finland, Denmark, Australia and Ireland:
a) the relatively strong commitment to R&D spending of our smaller businesses and in particular those with less than 50 employees
b) the shocking under investment by our largest companies.
LEVEL OF BUSINESS EXPENDITURE ON R&D BY FIRM SIZE
Sources: Statistics NZ and OECD surveys (Finland, Australia and Ireland data 2006, Denmark 2005 and NZ estimated from 1999 – 2005 trend)
Re the huge difference in R&D spend by larger NZ companies – one factor that you don’t seem to have touched on is company ownership. As I understand it the situation 75% of the companies in the NZSX are owned by offshore interests. My gut feeling is that these companies are more likely to spend their R&D money at Head Office.
Re your comments elsewhere about R&D – I had two small companies that developed some marvellous ideas during the 1980s and 1990s. We had to watch as bigger companies with people more able to fill out the forms and spend time and money going to/from Wellington walked away with government dollars for (IMHO) inferior ideas.
We came to the conclusion that the people who run the till think that only big companies are able to transform economies. And of course it has got way worse with the recent policy shifts by the National Government – for both R&D and Export. Doh…
Noel Ferguson, June 11, 2010 at 3:45 pm