Innovation Leads to Increased Profitability

Innovation Leads to Increased Profitability

Of the 44 percent of New Zealand businesses reporting innovation activity during the last three years, 80 percent report increased profitability as a result, according to Statistics New Zealand.

Results from the Innovation Survey 2003 show that New Zealand businesses spent $1.8 billion (or 1.5 percent of total expenditure) on innovation activities in their last financial year. Around 80 percent of innovating businesses also reported an increased range of goods and services. Over 90 percent of the innovations were successfully implemented.

Rates of innovation varied with business characteristics. Nearly 60 percent of larger businesses reported innovation activity, compared with 40 percent of smaller businesses. Manufacturing, and finance and insurance industries each reported a greater than 50 percent rate of innovation.

Businesses reported a number of barriers to innovation. The three main obstacles were: a lack of management resources (56 percent), cost of development (53 percent), and lack of appropriate personnel (51 percent).

An innovation is defined as the introduction of a new or significantly improved product or service to the market, or process within a business. The Innovation Survey was developed by Statistics New Zealand in collaboration with the Ministry of Research, Science and Technology (MoRST), and will enable comparison with similar international surveys. Statistics New Zealand will publish a detailed report from this survey in July 2004.

Brian Pink

Government Statistician

© Scoop Media