NEWSROOM
New Zealand’s innovation challenge: bridging the gap to global leadership
16 January 2024
Opinion: The latest Global Innovation Index shows how New Zealand needs to close the gap between its innovation inputs and outputs, writes Professor Rod McNaughton – Academic Director of the University of Auckland Business School’s Centre for Innovation and Entrepreneurship (CIE)
New Zealand’s ranking of 27th in the Global Innovation Index 2023 is a significant marker of our nation’s capabilities and potential areas for growth. While showcasing our robust education and governance systems, this position underscores the urgent need to elevate our technological prowess and market development.
New Zealand shines in institutions and human capital, securing the 12th and 21st spots, indicating our strong foundation. However, the path ahead is not without its challenges. Ranking 39th in knowledge and technology outputs and 31st in market sophistication is a clear call to action.
Looking at our counterparts, Australia stands at 24th, while other small economies like Finland (6th), Denmark (9th), and Ireland (22nd) rank significantly higher.
Switzerland sets the gold standard, consistently topping the ranking for the past 13 years. With a GDP almost three times larger than New Zealand’s, despite having a population only 1.5 times larger, Switzerland exemplifies the economic potential of a robust innovation ecosystem. If New Zealand matched Switzerland’s GDP per capita, it would mean an additional $178 billion to our economy.
New Zealand ranks 24th in innovation inputs and 31st in innovation outputs, suggesting a gap in converting inputs into tangible outputs. This inefficiency is a crucial area for improvement.
Additionally, many of our largest companies and trading sectors are not heavily invested in R&D. New Zealand’s top R&D investor is Xero, with an R&D intensity of 31%. But the next two largest are Fisher & Paykel (9%) and Fonterra (1%). This discrepancy starkly illustrates the difference between high-tech and primary sector innovation investment.
New Zealand needs to leverage its educational and research strengths while addressing its gaps to improve. We need to look at how to:
- Enhance collaboration, especially between industries and universities.
- Boost the start-up ecosystem and develop more entrepreneurially minded graduates.
- Ramp up R&D Investments focusing on high-tech sectors.
- Attract investment from domestic and foreign investors, particularly in IP-focused sectors.
With our strong education and research base, New Zealand is well-positioned to grow its innovation ecosystem. By addressing our gaps and learning from nations like Switzerland and other small economies that rank higher, we can translate more of our inputs into successful outputs and improve our economy and well-being.
The Global Innovation Index, published by the World Intellectual Property Organization (WIPO), a specialised agency of the United Nations, offers a comprehensive view of countries’ innovation capabilities and performance. It’s an invaluable tool for governments to benchmark and strategize their path forward in the innovation sphere.
Professor Rod McNaughton
Professor Rod McNaughton
16 January 2024
Opinion: The latest Global Innovation Index shows how New Zealand needs to close the gap between its innovation inputs and outputs, writes Professor Rod McNaughton – Academic Director of the University of Auckland Business School’s Centre for Innovation and Entrepreneurship (CIE)
New Zealand’s ranking of 27th in the Global Innovation Index 2023 is a significant marker of our nation’s capabilities and potential areas for growth. While showcasing our robust education and governance systems, this position underscores the urgent need to elevate our technological prowess and market development.
New Zealand shines in institutions and human capital, securing the 12th and 21st spots, indicating our strong foundation. However, the path ahead is not without its challenges. Ranking 39th in knowledge and technology outputs and 31st in market sophistication is a clear call to action.
Looking at our counterparts, Australia stands at 24th, while other small economies like Finland (6th), Denmark (9th), and Ireland (22nd) rank significantly higher.
Switzerland sets the gold standard, consistently topping the ranking for the past 13 years. With a GDP almost three times larger than New Zealand’s, despite having a population only 1.5 times larger, Switzerland exemplifies the economic potential of a robust innovation ecosystem. If New Zealand matched Switzerland’s GDP per capita, it would mean an additional $178 billion to our economy.
New Zealand ranks 24th in innovation inputs and 31st in innovation outputs, suggesting a gap in converting inputs into tangible outputs. This inefficiency is a crucial area for improvement.
Additionally, many of our largest companies and trading sectors are not heavily invested in R&D. New Zealand’s top R&D investor is Xero, with an R&D intensity of 31%. But the next two largest are Fisher & Paykel (9%) and Fonterra (1%). This discrepancy starkly illustrates the difference between high-tech and primary sector innovation investment.
New Zealand needs to leverage its educational and research strengths while addressing its gaps to improve. We need to look at how to:
- Enhance collaboration, especially between industries and universities.
- Boost the start-up ecosystem and develop more entrepreneurially minded graduates.
- Ramp up R&D Investments focusing on high-tech sectors.
- Attract investment from domestic and foreign investors, particularly in IP-focused sectors.
With our strong education and research base, New Zealand is well-positioned to grow its innovation ecosystem. By addressing our gaps and learning from nations like Switzerland and other small economies that rank higher, we can translate more of our inputs into successful outputs and improve our economy and well-being.
The Global Innovation Index, published by the World Intellectual Property Organization (WIPO), a specialised agency of the United Nations, offers a comprehensive view of countries’ innovation capabilities and performance. It’s an invaluable tool for governments to benchmark and strategize their path forward in the innovation sphere.
EMAIL
CIE@AUCKLAND.AC.NZ
POSTAL ADDRESS
THE UNIVERSITY OF AUCKLAND BUSINESS SCHOOL
PRIVATE BAG 92019, AUCKLAND
