How innovative is our agriculture sector?

Almost a third of agriculture businesses were innovative during 2008 and 2009, Statistics New Zealand
said today. In addition, over a third of businesses that support agriculture (such as fencing contractors)
were innovative during the same period. However both were below the overall innovation rate for all
industries, which was 46 percent.

These results come from Statistics NZ's Business Operations Survey: 2009, which covers businesses in
all industries with six or more employees. This will exclude many smaller agriculture businesses, but gives a good picture of business practices across the whole New Zealand economy.

The importance of the agriculture sector to New Zealand means it underpins a number of other industries.

The agriculture industry division in the survey represents primary farming or food growing activities, but
the further transformation of this produce into processed or value added products happens in some
manufacturing industries. Food product manufacturing businesses, many of which use primary products
from agriculture as their basis, were more innovative, with an innovation rate of 53 percent.

The two reasons most reported for agriculture businesses to be innovative were to increase revenue and
to increase productivity (90 and 85 percent, respectively). In comparison, the food, beverage, and tobacco
industry was less focused on productivity (87 and 66 percent).

Innovation encompasses a wide range of activities associated with the introduction of new goods,
services, processes, or methods. It also encompasses research and development (R&D). Examples of
innovation include growing fruit using new methods. Other information collected by Statistics NZ
shows R&D targeted at primary industries accounts for almost a fifth of New Zealand’s R&D expenditure.

This was the largest area of focus for R&D, closely followed by the manufacturing sector.

Statistics NZ collects information on innovation and R&D in alternate years. For further information,
see the Business Operations Survey and additional tables on innovation and agriculture.

The Innovation in New Zealand: 2009 report will be released on 30 June 2010, and will provide more
information about business and industry innovation.