Case Studies By Service Area
Financial and Economic Services
Encouraging business innovation through research & development
The Scope
During 2006 and 2007, then Principal Advisor, Nick Davis, was contracted by the Ministry of Economic Development (MED) to work with the Growth and Innovation Framework Team on the National Innovation System Project. This project encompassed work on a number of innovation system “modules”, one of which focussed on business research and development (R&D), innovation and economic growth.
Our Involvement
Nick was asked to lead research and policy analysis work on business R&D including overseeing two other MED analysts. This work involved identifying key policy questions, undertaking a review of the literature, analysing data on business R&D in New Zealand, assessing current policy settings, and formulating policy recommendations. This result of this work was published as a Ministry of Economic Development occasional paper, authored by Nick, which can be found here.
MED asked Nick to present this analysis to senior Ministers, which led to the proposal’s inclusion in the 2006 business tax review. Nick was also subsequently asked by MED to input into detailed policy development, requiring him to work closely with officials from MED, the Treasury, Inland Revenue Department, and the Ministry of Research, Science and Technology.
The Outcome
Tax credits for R&D were first proposed as part of the 2006 business tax review. In May 2007, the government confirmed that a 15% tax credit for business R&D expenditure would be introduced with effect from the 2008/2009 income year.
The MartinJenkins Difference
This project required a sound understanding of innovation policy, strong economic policy analysis skills, and highly developed skills in the delivery of effective policy advice to Ministers. It also drew on Nick’s experience in managing and participating in inter-agency policy processes. The outcome is testament, in part, to Nick’s ability to deliver evidence-based policy advice in a clear and concise manner.
