This article was published on 25 March 2021
One year since the start of the COVID-19 crisis in Aotearoa New Zealand, Callaghan Innovation’s third customer ‘pulse check’ survey shows almost half (49%) of businesses believe they are well-positioned to respond to COVID-19 challenges. Only 40% said the same in the second survey, in May 2020.
Underlining the positive outlook, February’s survey shows almost three in five (59%) respondents are positive about the future of their business. Only one in twelve are feeling pessimistic.
On top of this, 60% of respondents plan to increase their research and development (R&D) spend over the next 12 months - up from 50% in May 2020. Nearly seven out of ten (69%) predict increased revenue in the same period, and 59% increased headcount.
The survey involved 466 business owners, managers or R&D managers who are Callaghan Innovation customers, and took place between 11 and 22 February 2021.
Not out of the woods, yet
Despite the relatively positive outlook, responses show many businesses don’t feel they are out of the woods: 30% say they feel cash constrained, with a short or a non-existent cash runway. This concern is, unsurprisingly, most prevalent among pre-revenue and low-revenue businesses.
Around half of businesses say further lockdowns - specifically, being at Alert Level 4 for three or more weeks - would create significant problems, with one in eight saying they would have to close or would struggle to stay afloat.
The survey also highlights that uncertainty in general is a key concern - including unknowns about the future of conducting business internationally.
“Business is more difficult in general. It is hard to plan when there is no certainty over vaccines and markets etc and travel for business is very difficult. Not being able to be present in the market risks losing projects longer term and relying on agents etc is a step removed and more costly. An increase in nationalism for supply creates increased challenges and the inability to easily travel demonstrates to clients that we are removed,” said one respondent.
Other key findings:
- COVID-19 came as a shock to businesses, but they have now had time to adjust to the implications (new operating regulations, market and supply chain impacts) and the realisation that this was not just a short-lived change
- The short term R&D Loan has been a welcome support with 43% of respondents applying for it to help continue and start their R&D
- Larger companies (50+ employees) are more likely than smaller companies to say they’ll keep spending on R&D at the same level over the next year (38% compared to 25% with less than 50 employees)
- Lower revenue companies are most likely to say they’ll ramp up R&D spending over the next year: 38% of those with $300k or less in revenue have plans to increase spend significantly
- Businesses say they need government agencies like Callaghan Innovation to be well-resourced to match the post-COVID-19 demand for innovation services.
Where to next?
Our customer pulse check surveys are invaluable in helping us understand key business concerns, and what our customers need to sustain operations and, ideally, thrive in the COVID-19 recovery.
We will continue to work with our partner agencies to address these concerns and challenges, and develop suitable support options.
Please click the image below to view key insights - download or view in Google Chrome.