Source: MakeLemonade.nz
Tāmaki Makaurau – In 2022, just eight percent of businesses, across all industries and sizes said that they undertook or funded any research and development (R&D) activity, according to a Berl survey.
Berl is a leading New Zealand economic researcher. Agriculture and the construction sector businesses are the least innovative, according to Berl.
Unsurprisingly, the most innovative businesses tended to be clustered in the tech and services industries.
Computer systems design (38 percent), machinery and equipment manufacturing (35 percent), and telecommunications (33 percent), were the top three industries funding R&D during the year.
Aotearoa’s firms were most likely to be constrained by internal factors such as the costs of introducing new ideas, time and skills of top management and a shortage of appropriate personnel in the organisation.
NZ’s small domestic market and lack of competition in several industries were also factors that reduced the incentives for innovating.
The 2022 survey also asked questions on firms’ wage and price setting decisions over the year.
Forty-three percent of all businesses said that they had increased the frequency of their price changes compared to 2019 pre-covid.
Nearly a quarter said that they reviewed their prices daily, weekly, or monthly. Inflation over the previous year was rapid and broad-based, causing firms to reconsider their prices more frequently than before.
Changes in labour and other input costs were the top two considerations in firms’ price setting decisions.
Although firms in some industries such as banking have seen their profits soar, contrary to the current narrative, most businesses particularly small businesses with many competitors do not have the ability to routinely increase prices without substantially denting demand.
Thirty-nine percent of businesses said that their profit margins had decreased, and an additional 36 percent said they had remained the same, compared to pre-covid levels.
Over the past few months wage inflation has reached unprecedented highs, and annual growth in weekly earnings in the private sector (8.6 percent) surpassed general inflation (7.2 percent). This has been the result of a mix of factors: practically zero migration over the past
The shortage of skills has meant that employees have a higher bargaining power over both wage and non-wage conditions.
In the last two financial years, close to a quarter of firms said that they increased flexibility for employees in terms of location and/or hours of work. Over a fifth said they had increased either annual or discretionary leave entitlements, and/or training opportunities available.
