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25
MAY 11

Misunderstanding R&D Incentives




A recent editorial in the Herald demonstrates a narrow and misinformed view of what research and development really means. See:

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10727600

The context specific nature of the endeavour to find or apply new and different things is often overlooked by those only peripherally involved with the activity.
 

Centralised R&D suits systems that have common needs and applications, agriculture for example; where R&D needs and applications are fundamentally desperate another approach – say R&D tax credits – is necessary.  Other jurisdictions seem to understand this basic point.  See:

http://www.johnwalley.co.nz/153-statistics_maybe_lies_maybe_no.aspx

Given that intervention in this domain the competitive dimension is clear, firms in Australia (say) get more support from their government for this specific activity they sit in a better competitive position in all markets.  Conversely without it NZ firms are at a competitive disadvantage.  The link has much to say in this regard.
 


tags: r&d tax credits, herald editorial, competitive advantage
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