A half a billion (NZ) dollar increase in business sector R&D spending over the last two years may not sound significant by world standards, but by New Zealand standards it was highly welcome news. Not only does it represent the highest increase in 10 years, it also signals a growing commitment on the part of thousands of local businesses to invest in improving their competitiveness and productivity.
Digging into where this growth came from makes interesting reading. In primary industries, investment increased by just $4m to $100m and manufacturing spending rose by $9m in the same period to $680m.
A whopping 97% of the $548m increase took place in service industries which includes wholesale trade, computer services, scientific research and tech services, and other services (a bundled category that includes professional services, market research, management and consulting).
While current expenditure still lags OECD averages, there is wide recognition that further incentives in the form of R&D tax credits may help boost further investment. Indeed, as of writing, there is legislation on the table that if approved would see the introduction of a 15% tax incentive for businesses conducting R&D. Businesses investing between NZ$50,000 and NZ$120m per annum would be entitled to the tax credit on eligible spend.
This is good news for business owners that are already investing in R&D, as well as those that may wish to boost their R&D activity further.
The question, however, is what should the focus of R&D activity be and how can a business improve its chances of turning that activity into a commercial success and get the best return on that investment?
One approach, is to research existing intellectual property databases, which can provide an enormous amount of industry and competitive intelligence.
Recently, we worked with a manufacturer in the agritech sector to help the business owners determine whether they should continue to invest in developing their top-selling product or in new products. They wanted to benchmark themselves against their primary competitors, determine what technologies others were protecting in the form of patents, and discover any potential gaps in the market where they could hold exclusivity and set themselves apart.
We provided them with a comprehensive series of ‘Innovation Insight’ reports that provided a wealth of information about their industry and the competitive landscape, including existing and emerging competitors, what IP they’re protecting, where they are filing and which markets and jurisdictions they are intending to enter, and specific technology areas of interest. We were also able to identify companies in adjacent markets/areas for the client to potentially partner with.
The value of this kind of research and analysis is that it can provide a wider perspective of where other players in an industry or sector are focusing their R&D efforts, while highlighting competitive threats and opportunities. For example, you might discover that there is increased activity in an emerging technology area that’s related to the market you operate in, but that wasn’t on your radar. Similarly, patent filing strategies can also provide some insight to the export intentions of competitors.
While many New Zealand businesses are investing heavily in R&D, not all that activity will produce commercial benefit. Taking some time to build a body of market intelligence from IP searches and ‘Innovation Insight’ reports, is one way that businesses can make better decisions around how to compete more effectively.
Funding on how to extract business insights from such reports may be available through the Regional Business Partner Network. Contact James & Wells to find out more.
