Key announced the budget’s R&D package today. The fact that it was done a week out and Mapp was pushed out of the limelight signals that this is the good news of the budget. If this is the good news it doesn’t give us much hope for what’s coming.
The bottom line: there is $56 million a year in new money for science and R&D. On the face of it good news and I welcome any support we can give to our scientists and innovators.
But the 15% tax credit that National axed when it came into office gave double the money in today’s announcement. And, we’ve been waiting 18 months and will probably wait another 6 months before the various schemes are actually implemented. That’s two years when our companies could have beefed up their R&D during the recession and rocked out of it. Time wasted.
Most of the new money will be given to companies to do R&D in the form of grants and vouchers. That means they’ll have to apply to some bureaucrat who will decide which company gets money – and which one misses out.
I happen to believe if our most innovative firms put their brains and their butts on the line doing R&D then we should give them a decent tax break. Not ask some risk-averse bureaucrat to make the call. Let’s trust our entrepreneurs. (By the way, Australia just announced 45% tax credits to its most innovative companies).
Our private R&D spend is one-third the OECD average. Today’s package simply ups state spending. Grants for just three years encourage companies to depend on the state. Tax credits encourage companies to invest in R&D and change their investment culture.
Add to that the Government’s axing of the Fast Forward Fund and replacing it with the ‘Primary Growth Partnership’ – a scheme that has yet to pay out one dollar – and it’s pretty clear that today’s fanfare is a small step that won’t even catch up to where we were a few months ago.
Good news? No, sad.
Falafulu Fisi
It depends what you want firstly then look at it accordingly.
Private enterprise – it has its place but that is a dominant one at a cost.
Research and new knowledge for mankind – hmmm.
Russia put up the first Sputnik in 1957 that weighed a ton. No private enterprise there.
It took US ages after that to put their first satellite up and it was tiny. Who is NASSA.
When research institutes are dismantled then how can they compete to prove their worth.
Often the measure of Science is in very narrow commercial terms.
Your comments aren’t logical FF. They seem to be no more than dressing in order to return back to your central premise: tax cuts, tax cuts and more tax cuts.
You said:
In detail, what you are saying is the reverse of what is actually happening in the real world. The US Govt is not giving less money for tech R&D than 30 or 60 years ago it is giving far more (DoE, DoD, NASA, etc.).
Compare the development and amortization cost of an F-22 versus an F-16.
When ARPANET was founded ~50 years ago, no one knew that it would be the foundation of Google, Yahoo!, Amazon, etc. half a century later. And you don’t know what miscellaneous obscure bit of Government funded tech today is going to create the next boom industry and future corporate giants in 50 years time. Guess what, you can it now and you will never know.
You cannot rely soley on private industry to carry the risks because private industry either cannot get certain things done, cannot be trusted to get them done and indeed often would not be interested in getting certain things done.
The first atomic weapon, the Apollo project, ARPANET, the Hubble telescope etc. would all be prime examples.
Real fundamental tech takes at least 10-20 years to mature into true money spinners and private industry is just not interested in payback periods which are that long.
For an engineer/tech guy you seem to have a painfully short term perspective.
FTW the bulk of photonics research is conducted at institutions which owe their existance or at least continued operations to at least some government funding e.g. NASA, MIT, IBM, Stanford.
Bottom line: Government and private industry need to co-operate closely for the best results in science and technology. Just look at the examples of South Korea, Singapore, Japan, Taiwan, the US and others.
Loota said…
The US Govt is not giving less money for tech R&D than 30 or 60 years ago it is giving far more (DoE, DoD, NASA, etc.)
I think that our differences is that I am arguing to stop Govt R&D handouts because the various funds/grants they gifted away to private industries don’t belong to Govt reps (who made those decisions) in which they can play Russian roulette with. It belongs to the taxpayer, and the taxpayer had no say at all in how their tax dollar is being spent. But you say (indirectly), that the Govt knows best. If that is the case, then all MPs who are in parliament representing us today, would have been multimillionaires and perhaps the reason that they quit being entrepreneurs (business wo/men) is that they felt that their skills they have gained in the real world of business ( risk-taking) may be put to good use in order to help the country. But hey, MPs are not self-made at all (except Mr Key I suppose), but why would they dabble in being an MP while they could be self-made millionaires outside parliament & in the real-world if they think that they know best? Taxpayers don’t want to pay more (to be gifted away to private industries as R&D funding) than their fair share. If individuals wanted to fund some industries, then it is their personal choice. They can pool their financial resources together and fund those companies in exchange for equities. They do this, fully aware of the risks involved, where their investment could disappear in any day, because that’s the nature of it.
You’re arguing for a full support of handouts on the basis that it is for the greater economic good, since if the Govt won’t stump up the cash, then technology will not materialize sooner. As I have stated in a previous message that was then (the last 60 years). The technology did materialize earlier (as you have pointed out), but so what? Did it prevent Vietnam? No. How about Pol Pot murderous regime? No. May be the chaos in Somalia? No. The acceleration of technology inventions with the help of Govt R&D didn’t bring peace to certain regions of the planet. It brought miseries to certain people. Those cutting edge technologies that you cited would have been materialized anyway even if it was delayed (by years/decades) because Govt didn’t give handouts to private industries.
The funding of NASA, DoD, NASA and other government agencies are not handouts. They are legitimate government spending. The primary role of the government is defence to protect its citizens’ rights against external threats, law & order, judiciary. So, I think that you have mingled together legitimate government spending and illegitimate government spending as the same thing. I am against funding of private industries by taxpayers, that’s where my stand is.
Loota said…
You cannot rely solely on private industry to carry the risks because private industry either cannot get certain things done, cannot be trusted to get them done and indeed often would not be interested in getting certain things done.
That’s what personal responsibility is. Carry the risks yourself. Let me ask you this. What certain things that you want the govt to deliver today? I mean state a specific technology that citizens need, in which only Govt can deliver? I would be interested to see some of those, certain things, you’ve hinted above.
Loota said…
The first atomic weapon
If Hitler wasn’t anti-Jews, then the Germans would have got to the atom bomb first. It was Physics Nobel laureates Marie Curie and Otto Hahn who first discovered radioactivity in about mid 1930s. Maria intentionally refrained from patenting the radium-isolation process, so that the scientific community could do research unhindered. Their discovery was then communicated (by Nazi & SS agents) to the head of German’s weapon research program, Physics Nobel laureate, Dr. Werner Heisenberg. Here is an interesting quote from Wikipedia:
After Adolf Hitler came to power in 1933, Heisenberg was attacked in the press as a “White Jew”[33] by elements of the deutsche Physik (German Physics) movement for his insistence on teaching about the roles of Jewish scientists. As a result, he came under investigation by the SS. This was over an attempt to appoint Heisenberg as successor to Arnold Sommerfeld at the University of Munich. The issue was resolved in 1938 by Heinrich Himmler, head of the SS. While Heisenberg was not chosen as Sommerfeld’s successor, he was rehabilitated to the physics community during the Third Reich. Nevertheless, supporters of deutsche Physik launched vicious attacks against leading theoretical physicists, including Arnold Sommerfeld and Heisenberg. On 29 June 1936, a National Socialist Party newspaper published a column attacking Heisenberg. On 15 July 1937, he was attacked in a journal of the SS. This was the beginning of what is called the Heisenberg Affair
Some Historians have stated as a matter of fact, that because of his (Heisenberg) attack (initially) from the Nazi party officials, he set out deliberately to slow down German’s atomic weapon research program, thus giving time to the West to accelerate their atomic weapon development. Some other historians have disagreed with this, but there was mounting indirect evidence that Heisenberg did. His view at the time was that if Germany got to the atom bomb first, then humanity would be in dire straights. So, he thought that it would be better for the West to get there first rather than Germany. (There are some books out there on these historical accounts that one may like to check them out).
Loota said…
<ARPANET, the Hubble telescope etc. would all be prime examples.
Do we need a time-machine? If not then why not? Well if we think that Hubble must exist, just to prove out physics theories in Cosmology & relativity, then why not build a time-machine using Govt R&D funds, since general relativity theory predicts that it is possible. It is not a good reason, is it? Just stump up the money to conduct scientific research for no purpose other than curiosity. Again, if you ask taxpayers if they want to fund such R&D project for the purpose of curiosity, I bet you 100% will say, NO. But do (taxpayer) have a say in how their tax dollars are being spent? No. The Govt can spend it on science fiction program such as time-machine construction, without taxpayers having a say, since the Govt always knows the best.
Loota said…
Apollo project
The Apollo project wouldn’t have been a success without the sophisticated embedded control system that was developed into it for its guidance. The control algorithm that was developed into the Apollo’s guidance system, the Kalman Filter (KF), which was the result of research work of Dr. Rudolf Kalman both at Research Institute for Advanced Studies (a private enterprise) and Columbia University (private institute). KF is the foundation of modern control system design of today, from satellite navigation/telecommunication system, missile guidance, airline auto-pilot, robotics, etc,… It has found applications in economics (time-series analysis), even our NZ Reserve Bank have used it in their analytical work (see their discussion papers on their website on the use of Kalman). Kalman is just one example of a piece of technology that went into Appllo program that were not invented by Govt funding research.
Loota said…
at least continued operations to at least some government funding e.g. NASA, MIT, IBM, Stanford.
Yes, that’s true, but the majority of cutting-edge researches today (based on what I’ve seen in the literatures) come from private funding (as those that are being published from MIT, Stanford, Cal Tech, Columbia, IBM and so forth). This means that the Govt, is wasting its money in funding research work that are being inferior or being outdone by researches that come from private funding.
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