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46 pct of businesses report innovation

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Fuseworks Media
Fuseworks Media

Wellington, June 30 NZPA - A survey of businesses found 46 percent reported innovation activity in 2009, the same rate as in a survey carried out in 2007.

The innovation rate in the Statistics New Zealand (SNZ) report was defined as the proportion of businesses that undertook any activity in the past two financial years that resulted in the development or introduction of new or significant goods or services, operational processes, organisational or managerial processes, or marketing methods.

Innovation was important as it encouraged growth, knowledge transfer, and entrepreneurship, SNZ said.

Many of the results in the latest survey were similar to those in 2007, suggesting the overall patterns of innovation activities had not changed.

In the 2009 survey the information media and telecommunication services industry reported the highest rate of innovation, at 60 percent.

Industries with rates of more than 50 percent were manufacturing; wholesale trade; electricity, gas, water and waste services; financial and insurance services; administrative and support services; and professional, scientific, and technical services.

This country had a slightly lower innovation rate than Australia, with -- for the same business size and industry coverage -- this country having 48 percent and Australia 52 percent.

Existing staff were reported as being important sources of information to innovating business 74 percent of the time, with customers 61 percent, and new staff 54 percent, the report said.

Fewer than 10 percent of businesses rated either universities or polytechnics, or Crown Research Institutes, other research institutes, or research associations as important sources of information.

Increasing revenue was the most common reason for carrying out innovations, being a factor for 90 percent of innovating businesses, while increased productivity was a factor for 78 percent, increasing responsiveness of customers was 73 percent, reducing costs 72 percent, and increasing market share 72 percent.

Innovating firms reported an increase in sales in 47 percent of cases compared to 35 percent for non-innovators, productivity was higher for 39 percent of innovators and 23 percent of non-innovators, while 34 percent of innovators reported a rise in profitability compared to 29 percent of non-innovators.

Businesses in this country spent almost $2.5 billion on product development and related activities in 2009, equating to 0.5 percent of business' total spending, with manufacturing spending $773m, professional, scientific and technical services $414m, wholesale trade $332m, and retail trade $307m, the report said.

Industries with the highest average spend per business were telecommunications at $830,000, some machinery and equipment at $691,000, finance $666,000, and insurance $603,000.

The survey found that 45 percent of businesses which invested in product development or related activities spent less than $1000 per employee, while the overall average spend per employee was $2115.

The 4 percent of businesses in the survey with 100 or more employees accounted for 50 percent of all employees and 47 percent of all product development expenditure.

Only 8 percent of all businesses did research and development, although for those with 100 or more employees the amount was 20 percent.

Patents, as a form of protection for intellectual activity, were used by 11 percent of innovators and 4 percent of non-innovators, with this country ranked 21st in the OECD for its patent rate at 11.8 per million population.

Costs to develop or introduce innovation hampered 19 percent of businesses' ability to innovate to a high degree and 21 percent to a medium degree, while a lack of management resources hampered 15 percent to a high degree and 20 percent to a medium degree.

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