IBM Research Reveals NZ's innovation performance

New Research from IBM and the University of Auckland Reveals Important Insights Into New Zealand’s Innovation Performance

IBM New Zealand and the University of Auckland have today published the Innovation Index of NewZealand, an inter-industry, multi-indicator study measuring the rate of innovation effort in New Zealand since 1998.

“Innovation performance is widely acknowledged as a key driver of economic
prosperity, particularly in mature economies, and it’s important to
understand our strengths and weaknesses when it comes to this important
driver of growth,” says Jennifer Moxon, Managing Director of IBM New
Zealand.

IBM and the University of Auckland formed a partnership to develop the
Innovation Index of New Zealand in order to fill a gap in innovation
research and provide business leaders, analysts and policy makers with
valuable insights into New Zealand’s innovation performance over time.

The research looks at innovation across the whole of the aggregate New
Zealand economy, as well as within 16 separate industry sectors, spanning
both the commercial and non-commercial sectors.

Seven components of innovation are examined: research and development;
patenting; Plant Variety Rights; trademarking; design registration;
productivity; and organisational, managerial and marketing reforms.
Together, the seven components provide insights into the extent of
innovative activity at each stage of the innovation process.

The research reveals that, while some industry sectors have performed
reasonably well, New Zealand’s overall rate of innovation has remained
virtually flat for almost a decade.

After rising 13 per cent between 1998 and 2000, the overall rate of
innovation in New Zealand remained virtually flat for the next seven years
before dropping sharply in 2008, almost certainly in response to the
then-deepening economic recession.

“Given the critical role that innovation plays in creating wealth and
prosperity, it is concerning that the rate of innovation in this country
has been virtually stagnant for the last decade”, says Ms Moxon.

“For New Zealand to achieve step-change economic growth, we must foster
greater levels of innovation in key industry sectors where there is
significant potential for commercialisation and wealth creation. By
focusing our efforts on market-relevant innovation, we will ensure the
greatest return on the investments we make as a nation,” Ms Moxon adds.

From an industry sector point of view, the strongest innovation performance
came from the Agriculture, Forestry & Fishing Sector, where the sector
index more than doubled between 1998 and 2008. It was the only sector where
innovation activity has consistently increased year on year since the base
year of 1998. In 2008, the rate of innovative activity in this sector was
double the 1998 base rate and almost double the national all-sector
average.

Associate Professor Basil Sharp, one of the principal researchers at the
University of Auckland Business School, says that this finding came as no
surprise to the researchers.

“Given that Agriculture, Forestry & Fishing is responsible for more than
half of New Zealand’s total export income – by far the largest single
export sector – we would expect to see greater than average investments in
innovation in this sector,” says Professor Sharp.
The effects of the economic recession are evident in the 6% decline in the
rate of innovation in 2008. Ten out of the 16 industry sectors declined,
with three sectors hit particularly hard: Construction (down 15%);
Accommodation, Cafes & Restaurants (down 12%); and Property & Business
Services (down 11%).

“An economic recession is the time when you should increase your rate of
innovation, not let it drop off. Continuing to invest in innovation when
times are tough gives you an advantage over your competitors when the
economy picks up again. The decline in innovation intensity seems to
indicate that some organisations in New Zealand view investment in
innovation as a luxury, not a necessity,” Professor Sharp says.

IBM New Zealand’s Chief Technologist Dougal Watt says it is time for New
Zealand to prioritise innovation to secure a brighter economic future.

“Innovation has the power to transform organisations, industries, even our
whole country, but improving New Zealand’s innovation performance will not
be simple or quick. It will require collective investment and long term
commitment from many stakeholders, including industry bodies, research
institutions, universities, business leaders, government policymakers, and
investors. To drive meaningful change, this will have to be a truly
collaborative effort. We at IBM look forward to being part of it,” says Mr
Watt.

ENDS

© Scoop Media