The innovation sector is set for a boost, with the government announcing new tax incentives for research and development.
It's hoped a tax break will encourage more companies to invest in the area which critics say has been underfunded for decades.
“One of the reasons we're struggling now to pay for infrastructure and core social services is that we didn't invest in research and development (R and D) twenty years ago,” says science commentator Shaun Hendy.
In a survey by MYOB, close to a quarter of medium sized businesses said they spent less than one per cent on R and D and a further 29 per cent didn't budget for it at all.
The new Science and Innovation Minister Megan Woods wants to motivate those groups by introducing a 12.5 per cent tax credit.
“Currently New Zealand’s gross expenditure on R and D is 1.28 per cent of GDP – much lower than the OECD average of 2.38 per cent. We need new ideas, new innovations and new ways of looking at the world if we are to build a sustainable and productive economy that delivers for all New Zealanders,” Ms Woods says.
Nelson biotech company Supreme Health is being held up as an example of how more funding in research and development could bring greater benefits to the economy. The business is at the forefront of new technology, growing a strain of algae at Cawthron Institute to create new health products with the antioxidant astaxanthin.
“This is just emerging as a new area, the next generation of natural health products for the world,” Supreme Health chief executive Kerry Paul told 1 NEWS.
Supreme Health has recently partnered with a major Israeli biotech firm which could let it tap into a growing multi-billion dollar industry.
“Then we have the opportunity of transferring the technology from Israel back to New Zealand. We'll finish up, jumping 20 years.” Mr Paul says.
Shaun Hendy says more firms should follow suit, “reaching out to the best science overseas, the best technologies overseas”.
Businesses have until June to give feedback on the government’s plan.