Seeding success

A promising indicator of the way this will unfold is the name of the new entity overseeing this sphere of activity, the Ministry of Science and Innovation. Its new title clearly underscores the important role research and development plays in boosting our competitiveness on the world stage and so lifting our standard of living at home.

Fortunately it also rejects the recent suggestion by Don Brash’s 2025 Taskforce, established to seek ways to close the gap with Australia, that the Government should spend less rather than more on R&D. Their report recommended no increase in public spending on R&D, and even questioned the value of locally based R&D in innovation.

However, it is clear from numerous analyses that it is the small countries with significantly higher levels of both public and private R&D spending than ours, such as Finland and Singapore, who have effected successful economic transformation.
 
That being the case, IRL applauds the government’s approach to business assistance, in the form of $200 million in new funding for initiatives to support business spending on R&D, including technology development grants and a technology transfer voucher scheme.

The latter, which commits $20 million over four years, matches government and private sector funding, and looks set to be heavily oversubscribed. We can only hope this sends the message that it should be extended beyond that period.

The first voucher has been awarded to Auckland produce company Fresh Direct, who will use it to access IRL’s considerable expertise in the field of automation in order to increase productivity and reduce wastage on the farm (see Fresh, First, Funded).

In further support of this scheme, IRL has launched its own dollar for dollar co-investment programme, aimed at lowering costs associated with getting innovative products to market (see A Boost for Business).

To compete on the world stage, it is obvious that small countries like ours require the maintenance of a strong R&D infrastructure that can be accessed by industry.

Singapore, for example, with a population similar to New Zealand, achieved vast economic growth as a result of heavy public investment in R&D infrastructure, which encouraged the private sector to follow suit.

The NZ government’s recent announcement of a $17.25 million wool research consortium is another promising sign that a coordinated approach to R&D is being applied to important sectors.

Fortunately, New Zealand’s manufacturing industry and associated sectors already have a dedicated research arm, in the form of IRL.

This is highlighted in a recent MoRST study, which illustrates the benefits to industry of maintaining a strong national R&D capability.

It cites the example of premier New Zealand marine electronics company Electronic Navigation Ltd, which leveraged IRL’s world-leading research into novel sonar transducers to develop a product that generated substantial export revenue. Not only that, but it enabled them to change their strategic direction and focus from an importer and onseller of foreign technology to that of a developer and exporter of technology.

Far from abandoning the development of a robust public R&D infrastructure in the attempt to catch up with our cousins across the ditch, as the 2025 Taskforce mistakenly suggests, 2011 should be the year government and industry boost their collaboration in pursuit of factors proven to be crucial to economic success for small, dynamic nations – higher levels of both public and private sector R&D spending.

Shaun Coffey
Chief Executive