In April 2008 the New Zealand government introduced an R&D tax credit scheme to encourage firms to invest more in R&D and increase their productivity and competitiveness. The Ministry of Research, Science and Technology (MoRST) is charged with evaluating the effectiveness of the design and implementation of the R&D tax credit and the impact of the tax credit on the level of R&D undertaken. MoRST has commissioned a series of baseline studies to assess the implementation of the pre-implementation level of business R&D. This report forms one of those baseline studies and will be used to judge the effectiveness of government policy in this area.
Purpose
The specific objective of this study was to better understand participant behaviour of small and medium enterprises (SMEs) as they make decisions about preparing to take up the R&D tax credit.
Key Results
It concludes that: innovation was done by 42% of the firms surveyed; lack of access to capital and qualified staff restricted innovation; firms that engaged in R&D were more likely to report increased turnover; but that those firms engaging in R&D did so in an ad hoc basis, without defining R&D firmly; firms were more likely to keep good records on R&D when it was a major part of their business and when they had received grants for R&D in the past.