Science and Innovation Minister Paul Goldsmith has already announced an additional $74.6 million in funding for Callaghan Innovation's Research and Development Growth Grants, but industry commentators say more needs to be done.

Former Science and Innovation Minister Steven Joyce, now Finance Minister, will deliver his first Budget tomorrow and had previously said his goal was to increase R&D funding to 1 per cent of GDP.

Science Media Centre director Peter Griffin said funding was at about 0.7 per cent of GDP
and reaching 1 per cent would not happen in tomorrow's Budget.

"It's been pretty quiet around what people are expecting [from the Budget], I don't think people are expecting much with the change in minister," Griffin said.


"But the Government is really keen to get to 1 per cent of GDP for business R&D and it's slower than they had anticipated so they're trying to stimulate that further with the extra $75 million into Callaghan," he said.

"It's not happening quickly enough."

Griffin said having Joyce as Finance Minister could help as, having worked closely with the sector for a number of years, he understood the benefits funding could make to economic development.

Goldsmith, who took over from Joyce in December, said the $74.6m boost in funding through the Innovative New Zealand programme meant a total of $657.2m was available over four years through the Growth Grants programme.

"Encouraging business R&D helps high-tech, innovative Kiwi companies to bring products and ideas to the market sooner, which has significant benefit for export revenues," Goldsmith said.

Andy Hamilton, chief executive of business growth hub Icehouse, said the government needed to focus its funding on the development rather than research side of R&D.

Hamilton said it was universally agreed and accepted that New Zealand needed to be more innovative and R&D focused, but the question was how best to do this.

"I think putting more money into research without regard to the development can be very challenging," he said.


"The economy is going really well but we don't necessarily seem to be progressing as well as we try and convince ourselves we are."

"The productivity of New Zealand firms has not necessarily improved that significantly so there is something wrong there."

Hamilton said he would like to see a stronger focus in the Budget on the country's medium-sized businesses.

There were a lot of great Kiwi start-ups getting funding but $5m to $20m companies were missing out, he said.

BusinessNZ said it also wanted to see investment in innovation.

"New Zealand companies will compete more effectively by innovating products, services and processes and through rapid commercialisation of new ideas," it said.

"BusinessNZ supports Budget investment in support of business research and development through Callaghan Innovation co-funding arrangements."