Over the past few years, we've spoken with hundreds of manufacturers across New Zealand. One thing is clear: Kiwi manufacturers are continuing to innovate, but many aren't making full use of the innovation funding incentives designed to support those investments.
The reasons vary. Some businesses aren't aware the programmes exist. Others assume they're not eligible, or don't have the time to navigate an increasingly complex funding landscape.
While we'll always advocate for greater investment in innovation, one of the biggest opportunities right now is helping more businesses make use of the support that's already available. Greater awareness leads to greater uptake, more investment in innovation and better outcomes for Kiwi manufacturers.
In this article, we shine a light on five innovation funding opportunities that we hope inspire more Kiwi manufacturers to explore what's available.
1. The R&D Tax Incentive (RDTI)
If there's one innovation funding initiative every Kiwi manufacturer should understand, it's the R&D Tax Incentive (RDTI).
At Swell, helping innovative businesses access the RDTI is what we do, and we've seen first-hand the impact it can have for manufacturers.
Unlike many one-off funding programmes, the RDTI rewards ongoing investment in research and development by providing a 15% tax credit on eligible R&D expenditure. For many businesses, this can mean cash flowing back into the business every year to be reinvested into future innovation.
Despite the opportunity it presents, the RDTI remains underutilised. In a survey we conducted with 100 New Zealand manufacturers, 61% weren't currently accessing the scheme. Limited awareness, uncertainty around eligibility and the complexity of the application process emerged as the biggest barriers.
For manufacturers investing in innovation, that's a significant missed opportunity.
An independent five-year evaluation of the RDTI found that for every $1 of tax credit received, businesses invested an additional $1.40 in R&D. Rather than simply helping businesses recover the cost of innovation, the RDTI encourages them to invest even more.
In practice, that additional investment often goes towards:
- Accelerating new product development
- Investing in new manufacturing processes and automation
- Purchasing specialised equipment and testing capability
- Growing engineering and technical teams
- Expanding prototyping, testing and product validation
- Bringing forward innovation projects that may otherwise have been delayed
One of the biggest misconceptions we encounter is that R&D only happens in laboratories or involves scientists in white lab coats.
For manufacturers, eligible R&D is often happening on the factory floor. It could include:
- Developing a new product or significantly improving an existing one
- Designing or testing new manufacturing processes
- Trialling new materials or production methods
- Solving complex engineering or technical challenges
- Designing, building and testing prototypes where the technical outcome is uncertain.
- Improving product performance, quality or production efficiency through systematic experimentation
If this sounds like your business, there's a good chance you're already undertaking eligible R&D. If that's the case, don't leave money on the table.
2. New to R&D Grant
The New to R&D Grant plays a specific role within New Zealand's innovation funding landscape. It's designed to help businesses take their first steps into structured research and development, with the ultimate goal of preparing them to transition onto the R&D Tax Incentive (RDTI).
Unlike the RDTI, this isn't an ongoing funding mechanism. It's intended for businesses that are new to government innovation funding and have not previously received the RDTI or other government R&D or innovation support.
For manufacturers beginning to formalise their innovation activities, the grant can help build the capability, systems and confidence needed to undertake sustained R&D. From there, the expectation is that businesses progress to the RDTI as their long-term innovation funding mechanism.
Why it's worth knowing about
Even if this grant isn't right for your business, it highlights an important point. New Zealand's innovation funding programmes are designed to work together. For businesses at the beginning of their R&D journey, the New to R&D Grant provides a pathway into the RDTI, which remains the cornerstone of ongoing innovation support.
3. Investment Boost
Strictly speaking, Investment Boost isn't an innovation funding programme. It's a broader business investment incentive. However, for manufacturers investing in innovation, it's well worth understanding because it can significantly reduce the cost of investing in the assets that make innovation possible.
Introduced in Budget 2025, Investment Boost allows businesses to claim an immediate 20% tax deduction on the cost of eligible new assets, in addition to normal depreciation on the remaining value. For manufacturers, this could include investments in machinery, automation, production equipment, commercial buildings and digital technologies that improve capability and productivity.
While Investment Boost and the R&D Tax Incentive serve different purposes, they can work well together. Investment Boost helps reduce the upfront cost of investing in the equipment and infrastructure that enables innovation, while the RDTI rewards the research and development activities that follow.
Why it's worth knowing about
For manufacturers investing in new equipment, Investment Boost can significantly reduce the upfront cost of capital investment. Combined with the R&D Tax Incentive, businesses can lower the cost of both the assets that enable innovation and the R&D activities themselves, freeing up more capital to reinvest in growth.
4. R&D Experience Grant
If Investment Boost is about investing in the equipment that enables innovation, the R&D Experience Grant is about investing in the people behind it.
The grant helps businesses access emerging talent by funding a 10-week internship for a tertiary student to work on an eligible R&D project. For manufacturers, it's an opportunity to bring fresh ideas into the business, increase R&D capacity and expose future engineers, scientists and technical specialists to real-world innovation.
For students, it's equally valuable. The programme provides hands-on industry experience, helping develop the next generation of New Zealand's innovation workforce.
Why it's worth knowing about
Finding skilled technical talent remains a challenge for many manufacturers. The R&D Experience Grant provides a practical, low-risk way to introduce new capability into the business while building relationships with future talent.
5. R&D Careers Grant
For some businesses, an internship is just the beginning.
The R&D Career Grant helps manufacturers take the next step by supporting the employment of a Master's or PhD graduate in a research and development role for six months. The programme is designed to strengthen in-house R&D capability while creating meaningful career opportunities for highly skilled graduates.
For manufacturers looking to build long-term innovation capability, it's an opportunity to bring specialist expertise into the business, accelerate R&D projects and invest in the people who will drive future growth.
Why it's worth knowing about
Building innovation capability doesn't happen overnight. The R&D Career Grant helps manufacturers attract highly skilled talent, develop internal expertise and strengthen their ability to deliver ongoing research and development.
Bringing it all together
New Zealand has a broader range of innovation support available than many manufacturers realise. The right incentive will depend on your business, your stage of growth and the type of innovation you're undertaking.
This article isn't to suggest every manufacturer should pursue every opportunity. Rather, it's about understanding what's available and making informed decisions about which incentives can support your business.
For us, the R&D Tax Incentive stands apart. It's one of the few initiatives designed to reward ongoing investment in innovation, returning cash to eligible businesses year after year and creating a cycle of reinvestment and growth.
If you're developing new products, improving manufacturing processes or solving complex technical challenges, it's worth understanding whether you're eligible.
That's where we come in. At Swell, we help Kiwi manufacturers identify eligible R&D, navigate the claim process and maximise the value of the R&D Tax Incentive. If you're investing in innovation, we'd love to have a conversation.
Get in touch with our team for a no-obligation call.