More money spent on product research

Press, 8 May 1985, Page 39

More money spent on product research

PA Wellington Manufacturers are ploughing more money into research and development of new and better products, a new survey says. The survey by the Manufacturers' Federation and the D.S.I.R. shows that $135 million was spent on research and development in the manufacturing industry in 1983-84. Earlier estimates had been as low as $4O million. If New Zealand manufacturing is to match the efforts of overseas competitors, the Manufacturers’ Federation says this amount is not enough. The survey was released today, two days before the Science and Technology for Development Conference being held at Parliament tomorrow to Thursday. The level of private' sector research will be a key topic at the conference, the main aim of which is to encourage business to become more technology conscious.

Business has been criticised by some scientists for not carrying its share of national research effort.

The survey covered 500 manufacturing companies, 109 of them large and 400 medium to small.

Of the $135 million invested in research and development $BO million was spent by about 25 ner cent

of surveyed companies.

One of the difficulties of collecting information was that only 40 per cent of companies had systems of account identifying research spending. Many companies put research spending under a repairs and maintenance heading.

The economic rewards of companies doing research can be great. The survey showed that 20 per cent of companies which are exporting consider that 80 per cent of their exports came from their own research and development.

New Zealand manufacturers’ reliance on overseas technology is shown in the flow of royalty payments. Manufacturers paid $3O million in royalties on licence agreements in 198384 but received only $6 million from New Zealand technology. Most companies in the survey indicated that they

would do more research and development if the Government improved tax and financial incentives. This is likely to be one of the key issues at the conference, particularly in light of the Australian Government’s intention to increase tax incentives. Some businessmen fear New Zealand companies will prefer to do their research in Australia in future because of the tax advantages. The president of the Manufacturers’ Federation, Mr Earl Richardson, said New Zealand incentives were equal to only about half those offered by the Australian Government without taking into account extra incentives offered by individual states.

Technology was vital, particularly for exports and employment if local manufacturing was to keep up its spectacular growth of the last decade, he said.