Incentives for firms to invest in innovation are welcome.
The government announced $80 million increase in funding for Growth Grants announced on April 14, 2015. This funding will provide more incentives for companies to increase their research and development,
The Growth Grants, administered by Callaghan Innovation, are allocated to firms that spend at least $300,000 per year, and 1.5% of their revenue on Research & Development for two years.
I believe that the funding is well targeted.
Given budgetary constraints faced by the government, it is positive that the choice has been made to allocate funding where it can be most effective – in prompting innovation by New Zealand companies.
Innovation in goods and services is the best way for New Zealand firms to compete in world markets, and to counteract the effects on exporters of the strong dollar.
Funding premised on R&D investment by firms themselves is sound policy, which will be welcomed by the many New Zealand firms seeking to innovate and upgrade.
Phil O’Reilly is Chief Executive of BusinessNZ based in Wellington.