New Zealand

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New Zealand is an export-oriented economy that relies heavily on the primary sector. Its economy contracted sharply during the 2008-09 crisis when global demand collapsed, and substantial fiscal consolidation is under way to reduce public debt. After the 2010 Christchurch earthquake, investment in housing and public infrastructure boosted the recovery.The economy has subsequently grown strongly and is expected to continue to do so. Economic growth is a top priority, with science and innovation recognised as key drivers. This is reflected in a 60% increase in public investment in science and innovation since 2007-08.The government seeks a more diversified economy that combines growth in the primary sector with further investment in high-value manufacturing and services sectors. In spite of its small research system (GERD was only 1.27% of GDP in 2012), New Zealand has strengthened its technology advantage in bio- and nano-technologies, which is above both the OECD and the EU28 (Panel 3). The 2012 Business Growth Agenda focuses on export markets, innovation, infrastructure, skilled and safe workplaces, natural resources and capital markets.

Hot Issues

Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.

Encouraging innovation in firms and supporting entrepreneurship and SMEs

Firms carry out very little R&D by OECD standards (Panel 1d). New Zealand faces special challenges for raising BERD (0.57% of GDP in 2011): an industrial structure that is not R&D-intensive, a business landscape characterised by a lack of large firms (SMEs performed 80% of BERD in 2009), a lack of large corporate R&D investors (Panel 1e), and difficult market prospects owing to New Zealand’s small and scattered domestic markets and remote geographic location. The government is committed to creating the right business environment and incentives to encourage firms to double their R&D expenditure to above 1% of GDP. Callaghan Innovation, a new one-stop shop focused on supporting innovation, has USD 100 million (NZD 145 million) to support business R&D through three grants:<br /> <br /> - R&D Growth Grants to increase R&D investment in businesses with a strong track record for R&D spending in New Zealand.<br /> <br /> - R&D Project Grants to support greater investment in R&D in businesses with less established R&D programmes.<br /> <br /> - R&D Student Grants to support undergraduate and postgraduate students to develop skills in a commercial research environment.

Strengthening public R&D capacity and infrastructures

New Zealand’s public science system is based on universities and sectorally focused Crown Research Institutes (CRIs). In spite of relatively modest public expenditure on R&D (Panel 1a), the public research sector performs quite well, with five out of theworld’s top 500 universities and a strong ratio of scientific publications to GDP (Panel 1b, c). The National Science Challenges initiative, introduced in 2013, aims to strategically align and focus public research on large and complex issues by drawing scientists together across different institutions and disciplines. New investments have been made in large-scale research infrastructures, including advanced networks, genomics and high performance computing.

Improving returns and impact of science

While industry and science maintain close ties through research contracts and co-operative R&D, commercialisation of public research results could be improved (Panel 1o, p). The government is committed to increasing the value New Zealand gains from its investments in public research, with commercialisation a major focus. The recently formed Ministry of Business, Innovation and Employment funds two tools to support commercialisation: the Pre-Seed Accelerator Fund (PSAF) which supports early-stage commercialisation activities and the Commercialisation Partner Network (CPN), which operates alongside the PSAF to turn science findings into commercially viable products. In addition, Callaghan Innovation aims to accelerate the commercialisation of innovation by firms in New Zealand.

Reforming and improving public research system (including university research)

The government has recently made a number of significant investments in public science and research, including USD 91.4 million (NZD 133.5 million) over four years from 2013 for the National Science Challenges, and an additional USD 38.6 million (NZD 56.8 million) for contestable science funding for three years from 2015. The government recently released a draft National Statement of Science Investments (NSSI) for public consultation, which will help identify future priorities to improve the value and effectiveness of the government’s investment in science.

Improving the framework conditions for innovation (including competitiveness)

The Business Growth Agenda aims to improve the intellectual property (IP) regime in New Zealand and to increase the creation and use of IP. The 2013 Patents Act, which aligns national IP arrangements with international best practices, is the most extensive reform of IPR since 1953. The creation of a single patent-examination regime with Australia will help simplify patent applications as well.

Country Charts

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Selected Highlights

STI policy governance

In 2013 the Ministry of Science and Innovation was merged into the newly formed Ministry of Business, Innovation and Employment. The Ministry of Science and Innovation advised the government on science and innovation and policy, oversaw its investment in science and innovation (including research infrastructure), and was responsible for supporting commercialisation and technology transfer. These core functions are now carried out by the MBIE’s Science, Skills and Innovation Group. Callaghan Innovation was established in 2013 to accelerate the commercialisation of innovation by New Zealand firms. It provides several business innovation and support schemes within a single entity, and by providing a focal point for business R&D needs, helps to streamline STI policy delivery. Organisational changes have had an impact on STI policy evaluation, slowing the frequency of evaluations, increasing demand for impact-oriented evaluations and encouraging New Zealand to rebuild its evaluation system. More attention is being given to outcomes and a trend towards smaller and quicker evaluation exercises has been reinforced. Evaluation arrangements have been revised as well. New methods and data sources, e.g. public administrative data, are being introduced. Performance frameworks have been adapted to new funding mechanisms. Evaluation practices have been further institutionalised with the creation of an independent unit within the MBIE in charge of monitoring STI performance and STI evaluation.

Innovative entrepreneurship

New Zealand’s administrative and regulatory framework is very favourable to entrepreneurship (Panel 1j). While it has a strong angel investment market, its venture capital industry is relatively weak (Panel 1h). The New Zealand Venture Investment Fund (NZVIF) was introduced in 2002 to help build a venture capital market. While the progress of NZVIF in catalysing venture capital markets has been promising, it was adversely affected in the mid-2000s by the global financial crisis. Recently, further efforts have been made to stimulate innovative entrepreneurship. The 2013 Technology Incubator Programme offers new repayable grants of up to USD 307 000 (NZD 450 000) to assist technology start-up companies and pre-incubation grants of up to USD 24 000 (NZD 35 000) to help prospective start-ups establish the commercial viability of their innovative ideas. Other activities include the Pre-Seed Accelerator Fund and Commercialisation Partner Network that support early-stage technology commercialisation activities.

Clusters and regional policies

New Zealand’s economy is continuing to broaden beyond its traditional base in primary industries. The government-industry Primary Growth Partnership, set up in 2012, drives the development of primary industries through market-driven science and innovation programmes along the value chain. The New Zealand Food Innovation Network supports the development of the food and beverage industry by providing S&T facilities and expertise. Other recent initiatives include the establishment of technology- and innovation- focused precincts in Auckland and Christchurch, and the Lincoln Hub, a specialist land-based innovation hub near Christchurch.


New Zealand is less integrated in global science and innovation networks than would be expected for a small, English-speaking country, as reflected in international co-authorship and co-patenting data (Panel 1q, r). The government is committed to building international linkages and strengthening international science and innovation relationships, with initiatives to identify and capitalise on mutually beneficial research and innovation opportunities with international partners.

Skills for innovation

New Zealand has a sound skills base, a large pool of university graduates, good student performance in science and a fair share of doctoral graduates in science and engineering (Panel 1t, v, w). The government’s emphasis on increasing business R&D raises the issue of ensuring an appropriate innovation workforce. Science, engineering, and research-led learning has received USD 18 million (NZD 27 million) in funding and tuition subsidies have been raised. The Science and Society programme is a joint education-science plan to lift the profile of science, improve science literacy in society, and increase engagement in S&T, engineering and mathematics fields.