R&D News & Views - December 2005

Welcome to our monthly "R&D News & Views" in which we will keep you updated with news about business, science and technology.

1. Merry Christmas
2. Catalyst Carbon Calculator
3. Predictors of Success for NZ Businesses
4. Crown Research Institutes – how are they going?

1. Merry Christmas

To all our clients and colleagues, as 2005 draws to a close, we trust that you will be taking a break and having a relaxing and happy Christmas with family and friends. Best wishes for the festive season and a safe and prosperous New Year.

2. Catalyst Carbon Calculator

We have recently developed a Carbon Calculator as a tool to help businesses identify their energy use and the possible magnitude of any Carbon tax. We appreciate that the tax is not a certainty and is the subject of significant ongoing debate. With this in mind we believe that it is useful for businesses to be able to quantify how these issues may impact on them. We have made this available on a CD to a number of our clients and have received good feedback and suggestions on how it may be further developed.

Our Associate Justin Ford-Robertson, who has an extensive background in this area, has developed the calculator. If you would like to receive a copy of the calculator please contact Justin, Malcolm or Jane and we will arrange this.

3. HR & Innovation for better businesses

Ever wondered what you need to do well to be successful as a business? Based on no less an authority than Statistics NZ and the Chair of the Reserve Bank Board (Dr Arthur Grimes) we have the answer.

Using an analysis of firms using data from Statistics NZ business practices survey Grimes and research colleague Richard Fabling have come up with answers that while not huge surprises are food for thought.

The two big predictors of success are:

1. The proper management of staff. A package of “high performance HR practices� was found in businesses with rising market share. The standout practices identified were:
   • performance based pay,
   • regular surveys of staff satisfaction and
   • staff training targeted at fostering innovation.
     
     
2. Innovation – which was identified as having three core practices contributing to firm success:
   • Investment in up-to-date core equipment;
   • Investment in marketing of NEW goods and services, and
   • Spend on in-house R&D.

But the research showed very few firms invest in all three innovative practices which contribute to firm performance. Fewer than 3 per cent had adopted all three practices; only 19 per cent had adopted two or more; and 38 per cent had none of the practices.

Continuous in-house R&D is a significant factor in firm success, regardless of the company size. However, firms which had internal R&D capability tended to be among the larger firms, which raises questions for economic development policies This perhaps suggests greater focus on larger firms than on small and medium sized enterprises in lifting New Zealand’s economic growth performance.

4. Crown Research Institutes – how are they going?

Many of you will have close and ongoing relationships with Crown Research Institutes (CRIs) and CRIs are often directly linked to the future prosperity of New Zealand. Accordingly their success is of interest to us all.

Recent information released by Statistics NZ show the following for the CRIs collectively (all results are as at 30 June 2005):

• The surplus of the CRI’s after taxation was $13.3 million unchanged from the previous June year.
• Sales revenue increased by $7 million, or 2.7 percent, to $263.8 million.
• Government revenue received by CRI’s increased by $6 million, or 2.3 percent, to $271.2 million.
• Total operating expenditure increased 2.6 percent or $13.4 million to reach $532.6 million, up from $519.2 million the previous June year.
• Total assets held by CRI’s were $472.1 million, an increase of $5 million or 1.1 percent from 2004.
• Total staff employed 4,230

The following Table shows individual performance (Source: CRI 2004/05 annual reports, Crown Company Monitoring and Advisory Unit (CCMAU) analysis)

(* Scion revenue for 2004/05 includes 50.0% of Ensis’s total revenue for 2004/05)