Why should small businesses invest in R&D?

R&D is one of the main ways businesses have of gaining and keeping an edge over the competition. R&D leads to innovations that improve business processes and, when commercialised, better products and services.

Why is Callaghan Innovation trying to encourage more R&D?

New Zealand's prosperity relies on economic growth. One of the keys to this is innovation, which will help businesses produce the high-value products needed to expand and diversify our economy - reducing our dependence on unprocessed primary products. By the standards of other advanced economies, our R&D investment is low.


Callaghan Innovation's role is to accelerate the commercialisation of innovation. We offer products and services that increase potential to innovate and help convert that potential into commercial success.

We have a group within Callaghan Innovation with a dedicated focus on supporting the Maori economy. We're seeing increasing interest from Maori firms and corporations in investing in R&D to build on their already-strong primary industries and to develop more high-value products and services for export.

How does a small business without a separate R&D department carry out this function?

For small businesses, R&D-driven innovation is often more about a focused effort to deliver better products and services for customers, rather than establishing an R&D department. Outsourcing R&D can be a good option.

Callaghan Innovation provides businesses with a single point of access to New Zealand's innovation system. We have a national overview of R&D talent and facilities and can direct businesses to the right people - whether at another business, a university, a Crown research institute, a research organisation or our own team of researchers, technologists and engineers. We can also help businesses access training, markets and capital.

What sort of help and guidance is there for companies that receive R&D grants?

We award and administer more than $141 million of business R&D grants every year. Our investment managers, experienced business people, are experts in helping businesses with R&D. This can range from how to run an R&D project, through to finding global experts to help solve challenging problems.

What are some examples of businesses that hit the big time through R&D investment?


Many of New Zealand's biggest and most successful high-tech businesses started small.

When Sir Graeme Douglas couldn't get the products he wanted for his pharmacy, he started making his own. Douglas Pharmaceuticals has grown from producing cough syrup to earning hundreds of millions of dollars and selling products in about 40 countries, thanks in part to investment in R&D, which is around 10 per cent of its annual turnover.

Other top NZ companies that value R&D are Fisher & Paykel Healthcare, Gallagher Group, Methven, Glidepath, Weta Digital and Orion Heath.

Mary Quin is chief executive of Callaghan Innovation.