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Innovation and firms performance - November 2017
The Commission has recently completed its research into innovation and firms performance.
This is a summary of what we have learnt from our research on innovation. It also describes how research can be used to support innovation policy, particularly firm-level interventions aimed at lifting innovation.
This paper looks at the impact of innovation on the performance of New Zealand firms. Results show that innovating firms grew more quickly than non-innovators but did not experience improved productivity outcomes. However, digging into the relationship between innovation and firm performacne reveals that firms in the manufacturing sector improved their productivity performance as a result of innovation. Firms that were younger or had access to international markets also tended to experience highter productivity growth following some types of innovation.
This paper evaluates the impact of R&D grants on the firm performance. Given data constraints, the analysis covers the period 2004 to 2012 which precedes the creation of Callaghan Innovation in 2013. Although the paper does not directly evaluate the performance of Callaghan Innovation's R&D grants programme, it does illustrate the insights that can be gained from firm-level analysis of government interventions. Results show that grant recipients tend to increase innovation, and that this flow through to higher employment and higher output per worker. However, grants tend not to increase multi-factor productivity, which is generally taken to represent a firm's technology.
Family and work tax credits and effective marginal tax rates (EMTRs)
In July 2017, the Commission's Patrick Nolan gave a presentation about modelling family and work tax credits and effective marginal tax rates (EMTRs) at the New Zealand Association of Economists conference.
You can view the presentation as well as look at the data behind some of the graphs.
Recent papers on state sector productivity
This working paper looks at a range of quality adjusted productivity measures and discusses the benefits and risk of different approaches. It includes one series that benchmarks the results in the study with similar work in the UK (by the Office for National Statistics). The focus on the education sector is consistent with the Better Public Services programme and the overall intent to upskill the economy.
This research note explores how the scope for productivity measures in the public sector can vary depending on the nature of the task. While the paper focuses on the social sector, the idea of distinguishing between different types of tasks could potentially be useful for other sectors. It was prepared by a MPP student for the internship component of her degree over summer 2016-17.
Both papers will be useful information for the Commission's inquiry into State sector productivity.
Explaining ethnic disparties in bachelor's qualifications: participation, retention and completion
The Productivity Commission and Auckland University of Technology (AUT) have published joint research that looks at the factors associated with undertaking bachelor’s degree study in New Zealand.
The research is a detailed, comparative analysis of the factors that contribute to ethnic disparities in bachelor’s qualifications in New Zealand.
Achieving New Zealand's productivity potential
The Productivity Commission has just released a paper about why New Zealand has generally struggled to lift productivity over the last four decades and the broad areas of policy reform that would help in turning that around.
Written by Paul Conway, Achieving New Zealand's productivity potential presents a detailed analysis of the issues.
Other recent publications
One of our core roles is to undertake research on, and promote understanding of, productivity-related matters.
16/12/2016 Geographic proximity and productivity convergence within New Zealand
16/12/2016 Servicification of trade
09/05/2016 Subjective wellbeing in New Zealand: Some recent evidence
27/04/2016 What can complexity theory tell us about urban planning?
18/04/2016 Productivity Symposium transcript
12/01/2016 History of tertiary education reforms in New Zealand
We work with other government agencies through the Productivity Hub, which we convene and chair. The Hub plays a coordination role which helps inform the research choices of each participating agency, and advance collaborative research projects. The Hub also engages with a wider research community outside government.
The Commission has requested independent evaluations of our research function.
- 2015/16 research evaluation – by John Yeabsley
- 2014/15 research evaluation – by Viv Hall
- 2013/14 research evaluation – by Howard Fancy
Paul Conway, Director Economics and Research
Paul leads the Commission’s work on understanding the broad drivers of New Zealand’s productivity performance and the role of policy in improving it. He is also Chair of the Productivity Hub, a cross-agency collaboration of productivity researchers in the New Zealand public sector.
Paul is an economist with extensive international experience and has previously worked with the OECD, the World Bank, Westpac and the Reserve Bank of New Zealand. His work has included published studies on the impact of regulation on competition and productivity in New Zealand, China, Russia and India, as well as broader OECD-wide analysis. Much of Paul’s recent work with the Commission has focused on understanding productivity at the level of New Zealand firms.
Paul has a Master of Commerce and Administration (Economics), First Class, from Victoria University and a Bachelor of Commerce (Economics) from Otago University.