Enhancements to the New to R&D Grant: A boon for start-ups in New Zealand

In an effort to stimulate innovation and promote long-term economic growth, the New Zealand government has revamped the New to R&D Grant, with significant changes aimed at providing greater support to start-up companies. These changes, recently announced by Callaghan Innovation (New Zealand’s Innovation Agency), are designed to encourage businesses to engage in research and development (R&D) activities, ultimately propelling their journey towards innovation. For start-up companies, this means more opportunities, increased funding, and invaluable support to kickstart their R&D initiatives.

New to R&D Grant doubles co-funding to 40% and introduces Capability Development activities

The most substantial change in the New to R&D Grant is the significant increase in co-funding for eligible costs. Previously, businesses could expect 20% co-funding for R&D expenses. However, the new iteration of the grant will raise the co-funding rate to 40% for all eligible costs to a maximum total of $400,000.

There is a requirement to undertake two Capability Development activities, which are also funded at 40%. These activities are intended to help companies develop their in-house R&D capability, to help companies become long-term R&D performers. Capability Development is delivered by approved external parties and is available in the following areas:

• Understanding and using customer input
• Intellectual Property
• Regulatory and Compliance
• Lean R&D
• Project Management
• R&D Information Management
• Understanding the R&D Tax Incentive.

How does the New to R&D Grant support start-ups?

The New to R&D Grant has been specifically designed to help companies become long-term R&D performers. The Grant is not intended for one-off projects. Instead, its primary purpose is to assist companies in establishing a foundation for long-term R&D performance.

These changes offer a host of benefits for start-up companies. First and foremost, the increased co-funding of eligible costs significantly reduces the financial burden associated with R&D activities. This makes innovation more accessible, allowing start-ups to pursue ambitious projects they might have considered too costly before. With 40% co-funding available, they can now allocate more resources to crucial R&D endeavors.

The increased co-funding for eligible costs, the flexibility in allocating co-funding, and the focus on long-term R&D performance all combine to create an environment ripe for innovation and growth.

If you are a start-up company, or if you've been contemplating venturing into the world of R&D, this grant could be the catalyst you need to embark on an exciting journey of innovation and secure your place as a leading player in your industry.

Details on how to apply for the grant are available here.