Trends in Research, Productivity Growth and Competitiveness in Agriculture in New Zealand and Australia

Investment in R&D has long been regarded as an important source of productivity growth in New Zealand and Australian agriculture. Perhaps because research lags are long, current investment in R&D is monitored closely. In this paper trends in public investment in R&D and in productivity growth are reviewed. Investment in R&D has been flat in both countries although in recent years investment in New Zealand has increased. Nevertheless research intensity in Australia has been significantly higher than that in New Zealand. Productivity growth is also likely to have been higher. Econometric evidence about the sources of productivity growth is rarely clear. We develop some scenarios about the importance of domestic and foreign R&D and other sources of productivity growth and find that returns to investments in domestic research in both countries are likely to have been in the order of 15-20 percent.