NZ lags global R&D spend
New Zealand is ranked just one place behind the United States for supporting and enabling "dynamic growing businesses" according to an international report.
New Zealand ranks 11th in the Grant Thornton Global Dynamism Index [GDI] while the US ranks 10th, Australia comes in at sixth and Singapore takes the top spot.
The index takes into account basic GDP data as well as information from the Economist Intelligence Unit (EIU), the World Bank, Thomson Financial, UNESCO, and a survey of 406 senior executives in 50 countries about the environmental factors affecting the growth of their businesses.
However the study reveals New Zealand ranks just 33rd in the "economics and growth driver" category, showing that this country lags behind in its number of dynamic growth companies.
Grant Thornton New Zealand's national technical director Mark Hucklesby said the ratings provided comfort on New Zealand's ability to support growth out of the financial doldrums.
"New Zealand performed best in the labour and human capital driver where we were ranked fifth in the world," Hucklesby said.
"We were seventh in financing and environment, ninth in business operating environment, but 26th in science and technology and 33rd in economics and growth.
"We only spend 1.3 per cent of total GDP on research and development compared with an OECD average of 2.4 per cent and upwards of 5 per cent for some Scandinavian countries.
"The knock on effect of New Zealand's very poor record in R&D is that our growth prospects have suffered."
Hucklesby said Grant Thornton had identified five key drivers to an economy's dynamism: business operating environment, science and technology, labour and human capital, economics and growth, and the financing environment.
The Government has put aside $166 million over the next four years to establish a new Advanced Technology Institute for the manufacturing and services centre was a start, he said.
"We actually need a paradigm shift in the way we deal with many of our exported products.
"It is a topic that has been discussed in New Zealand for decades, but we still send a large proportion of primary goods overseas with little or no value added."
Globally the top 10 economies in the GDI report represent a diverse set of economic and political conditions, with a common factor being their level of industrialisation.
The report considered Singapore as being "well-placed to act as a gateway for dynamic businesses from mature markets seeking the greater returns on offer in the high-growth markets of Asia".
Its economy comes top for financing environment globally, and sits no lower than 11th in any of the five categories.
Singapore leads the world with an overall index rating of 72.1, followed by Finland 70.5, Sweden 69.6, Israel 69.3, Austria 66.1, Australia 65.6, Switzerland 65.1, South Korea 64.6, Germany 64.8, United Stated 64.1 and New Zealand 63.9.