With the reintroduction of new research and development grants, NZTech chief executive Graeme Muller hopes the Government will be open to the types of R&D that are underpinning one of New Zealand’s fastest growing exports – software
The transition to the R&D tax incentive scheme created unexpected barriers for software and hi-tech R&D as the official tax definitions for R&D often exclude the type of research and development necessary to create successful global digital products.
In the tech world, companies emerge fast and often need to invest rapidly in R&D while growing a global customer base.
These companies don’t have established R&D teams as it is everyone’s job. We really hope that these new grants will be structured in a way that helps to encourage more emerging software companies to invest in rapid R&D to accelerate their global expansion.
The digital technologies sector contributed $7.4 billion to the economy in 2020. Since 2015 it has, on average, grown about 77 percent faster than the general economy thanks to the creation and export of digital products.
The Government announced $250 million of investment over the next four years.
According to StatsNZ, software businesses invested almost $1 billion on R&D in 2021. The R&D tax incentive now has more than 1500 businesses enrolled, with over $118 million of RDTI credits approved. This has supported private sector investment in R&D of over $788 million so far.
