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.
I have close ties to the research, science & technology world. I need to say the announcement is underwhelming.
Who is Key kidding?
David said:
Beautiful, just beautiful David.
This is the pro-business, pro-technology, pro-innovation, but most importantly pro New Zealand side of Labour that the public have not yet seen enough of.
National is NOT the natural partner of productive enterprise and industry in New Zealand. Labour is.
Time to make NZ rich through the creation and encouragement of advanced industries and advanced services based here in and ready to sell to the world, and then let’s share that wealth with the people and communities of New Zealand.
It’ll be the government choosing “winners” and the chances are that it’ll be large firms that don’t need the subsidy rather than the small entrepreneur that needs it and is more likely to be trying something different. I think the R&D tax credit was a better option here. Although I think those small entrepreneurs need more than that as they need access to lawyers and advice as well as capital.
I’m not against state funded R&D but
1.) I think that money should go to state organisations such as universities and not private companies
2.) Government income from taxes need to be able to cover it which means raising taxes and not cutting them
It’s not always firms that need help. Individuals do as well.
I see the New Zealand Manufacturers and Exporters Association (NZMEA) has said: “Grants and vouchers come hand in hand with dead weight bureaucracy”.
I am perplexed why the Nat Govt is contradicting the approach it has been taking to date with the state sector. It has now gone down the path of not making real impact at the frontline with entrepreneurs but opting to throw money at the back office of bureaucracy.
Mapp pushed out of the limelight ?
Surely not again. he has to be the doormat of National party politics. Even in opposition.
National being nanny state when its handing out ‘grants’ to business. Who would have guessed.
Im sure the lucky companies wont be depending on bureaucrats for their turn lapping at the milk saucer. Most likely Joyce will be holding the milk bottle
@David, agreed.
Worrying that this fund comes at the expense of environmental, health and social science. ESR, which does work in areas like food technology and immunisation, currently faces big budget cuts and scientist redundancies.
No coincidence that national has shut down parliament for the last week.
And whats the bet the budget will be rammed through in record time and the whole lot closed up again
Money already goes to Universities in huge amounts.
I understand that most of this money is intended to go into agriculture and farming projects… I can understand the need to assist this industry but we have to start being more innovative. At the moment the big trend in farming is to make unsuitable land somehow suitable for dairying…short sighted indeed.
Come on Tracey Keys idea of innovation is a cycleway, his idea of negotiation is to tell Tuhoe to go jump in a lake and his idea of research grants for industry is money for F&P to fix their Dishdrawer and make it overseas
Tracey, ghost, always good to read your respective posts.
The only thing I have to add (repeating myself ad nauseaum) is that 1 tonne of milk powder = 8 iPhones, in terms of $ value.
Or put another way, 1kg of mined, raw silicon = $4/kg, 1kg of silicon based microprocessors from AMD or Intel = $40,000.
Now that’s what I call “adding value”.
[Admin - Please delete my comment from the other thread "Solidarity Forever" because that message in there was meant for this thread. I just realized that it was a wrong thread after I pressed the submit button]
So, the government is just picking winners only? I am currently developing & working on 2 start-up software ideas and basically, I do knock on doors of both local & overseas (some are quite prominent) entrepreneurs looking to back me up financially. It is a hard task and I have experienced being shot down (lots) before I even make my pitch. My ideas if I do it the way I have envisioned, then I believe that I am going to be very competitive against various Wall Street incumbents in the same market. Ok, my comment is based on what I have seen so far since I have done my homework of checking out the functionality of those products from incumbents (very big companies). Google started out in a bedroom, and by the time they took off, Microsoft were just playing catch-up and the reality is they’ve never really caught up with Google, despite their billions they have poured into R&Ds over the last decade or so. The first thing when one is pitching ideas is that investors will ask. How are you going to survive, if your competitor/s (e.g., Microsoft, Google) reproduce what you’re doing and therefore killing your product/market? A continual innovation is top on the list of what they want to hear from you. This is where R&D comes in.
I am not asking for government help and this is the risk that entrepreneurs must take, in that they must rise and fall on their own. Don’t forget that there are investors out there that one can knock on their doors. At least I am out there taking the risks and not sit on the side line like Loota (a government worshipper) who demand that government should put (more unnecessary) regulations for businesses to comply with. Oh, and also demanding that the owners surrender their rights to their properties (businesses) to the workers they hire (who don’t share the burden of carrying the risks in running a business).
Final question to Labour MPs is, what advantages to the taxpayer when the last government (Labour) gave interest free loan (about 10 millions) to Right Hemisphere a few years ago. This was picking winners and I am keen to hear anything good that came out of it.
Why are we picking winners? Is this fair to taxpayers?
Perhaps research money could come from those who pollute most. Perhaps the dairy industry could stump up. Lets call it ummm -how about a Fart Tax? No? (Actually it is the burp not the fart). Oh well the taxpayers should of course stump up for R&D.
F.F. said
Ehhhh messed up the quotes there, sorry.
Loota, do you involve in R&Ds or you’re in marketing & sales? If R&D, then what sort of R&D does your company get involved in? Just curious.
No, you’re not knocking on the doors of “entrepreneurs“, you’re knocking on the doors of capitalists. A capitalist is almost never an entrepreneur as they just don’t have the psychological profile for it.
It’s called a cooperative – a business where everyone shares the success and risks equally. It’s a hell of a lot better than the continual derogation that most people suffer under the capitalist system.
We do provide a net, or sorts for entrepreneurs Falafulu… if you go fail in your endeavours we will alow you to go bankrupt and start again, if your failure is abject we will pay you money to keep you and your family alive and sheltered and fed. I think it is wrong to suggest that entrepreneurs get nothing.
It stands to reason this fund will go to businesses and people already winning or likely to, because the govt doesnt want to have it thrown at it that the money was a waste of time…
INteresting that for NZ businesses to see the benefit of R & D they need a carrot of taxpayer matching to get into it.
Business people here complain often about the cost of running their businesses etc etc and yet they underspend in th emost crucial area, by choice and/or ignorance.
Suddenly a section of society that normally squeals about too much government, and not enough individual responsibility wants us all to pay for their R & D.
F.F: I’m no longer actively involved in that company but their R&D spend was considerable and ongoing. My professional background is on the technical side, and not marketing/finance/sales.
Tracey said…
Falafulu… if you go fail in your endeavours we will allow you to go bankrupt and start again…
I had failed before Tracey. About 7 years ago, I was developing a suite of education software products for high school level. I spent almost a year and a half developing the product but then failed at marketing it. I finally sold the product & IPs to an education company in the US which specializes in delivering online courses for secondary schools in US market and that was about 4 years ago. It was a big loss (to me personally), since the price it was sold for, was a tiny tiny fraction of the cost it took me (& 2 others) to develop the product. But then, as some of our local entrepreneurs say, you learn from your previous mistakes, then pick up again and have another go.
Tracey said…
Suddenly a section of society that normally squeals about too much government, and not enough individual responsibility wants us all to pay for their R & D.
That’s crony capitalism Tracey. You never see that from us Libertarians/free market advocates who believe in true capitalism (and personal risk taking), because we stick to our principles. In fact, I am against government doling out taxpayer money to private industries, such as the R&D package that Key announced today. Giving money out to Right Hemisphere (a private company) is not going to help a wage earner like cleaners at McDonald Restaurant for example (my brother is one). In fact, his pay is around $14/hr today which has been going up in increment of 50 cents from 10-50/hr over the last 5 years. He worked his ass off to get ahead when he was being paid 10-50/hr 5 years ago, and Labour (and National in the past) just gifted a free interest loan from his tax dollar to Right Hemisphere that is not going to give him any benefit whatsoever. Well folks, this is crony capitalism as TV presenter John Stossel is talking about (6 part series – a must watch for anyone who is misguided about capitalism).
T Bastard said…
No, you’re not knocking on the doors of “entrepreneurs”, you’re knocking on the doors of capitalists. A capitalist is almost never an entrepreneur as they just don’t have the psychological profile for it.
TB, are you trying to be a professor of entrepreneurship like Prof. Michael Cusumano of MIT or what? Your comment above indirectly implied that you are. Also your comment is, well, umm, useless & irrelevant. Anyway, if you want to listen to academic experts in entrepreneurship, then check out Prof. Cusumano’s next visit to the Auckland Business school next time, because you can learn directly from the man himself. I have attended 2 of his free public lecturers at University of Auckland over the last few years.
T Bastard said…
It’s called a cooperative – a business where everyone shares the success and risks equally.
Yep, that’s up to the rightful owner of the business and not up to busybody meddlers to decide. Get this over your head; the owner carries all the risks and not the workers. How hard for you to understand that undeniable fact. There are some business owners who don’t treat their workers with respect that they deserve, but that’s a minority. The majority treat their staffs like members of their own family.
Loota, are you consulting to your industry these days or retired? I still do consulting work (wide ranges of technologies) on the sides to get some earnings while working on my start-up ideas.
F.F. – I’ve moved on from tech; after working there for years (as an insider, project manager, consultant, etc.) I thought it a good time to walk away.
Fundamentally I can’t agree with many of your positions. Especially when I look at countries like Singapore, Hong Kong, South Korea and Japan. In each of those countries – and not just Asian countries, look at the UK throughout the 19th and early 20th centuries – Governments which got involved created the conditions for their nation’s trade and enterprise to thrive, from going from agricultural/horticultural economies to high value high tech ones.
And then there is the example of the United States govt, which effectively subsidises every single year the development of both high tech hardware and software – commercial and top secret – to the tune of billions upon billions of tax payer dollars, whether it be through NASA, through DoD spending or whatever.
Basically, NO country which has become great technologically and economically has used the free market libertarian philosophy that you are advocating on itself (they may have pushed it on others though) to do so.
Also the example of China. 15 years ago “Made in China” was a bad quality joke. Now, everything is made in China, from Sony TVs to Apple Macbooks.
Just another in a long list of hands on approaches delivering technological and economic results for a country.
FF said:
No, I don’t think so. If the owner screws up, chooses the wrong strategy, doesn’t get the financing right, the workers are just as likely to lose their livelihoods, then their houses, their means of keeping their family fed.
Don’t spiel on that the owner is the only player with skin in the game and the only one who benefits if the company succeeds. Or suffers if it fails.
As you were making a basic mistake and what I posted was the correction of that mistake it was incredibly relevant.
As Loota said, no they don’t. Actually, from what I’ve seen over the last couple of years – the “owners” carry very little risk. The workers are the ones who are paying while the owners are still raking it in. What the owners do is deny the responsibility that everyone else has and so decrease them.
And Draco, lets casually remind ourselves of the “risks” that the multi-millionaire finance company owners took vis a vis their thousands of now truly ******-over clients and former employees.
Makes the lie of the free-market neo liberal posture even more obvious and self serving.
T Bastard said…
The workers are the ones who are paying while the owners are still raking it in.
The workers don’t pay for building of new plants or hiring of new workers, etc. All those expenses are on the shoulder of the owner. It is the owner who goes to the bank and begs his bank manager for a loan (securing it with his house, etc,…). The worker didn’t chip in for starting up the business that he/she finds employment in the first place. The worker is not the one that goes begging with his/her 2 hands to the bank manager for a loan. It is the owner that carries all these risks. It is he/she who is trying to raise funds to do R&Ds or a new project. If the business doesn’t perform, then it is he/she is the one who is going to lose everything.
Let me ask you. What risks that you’ve encountered & suffered in your whole working life from working for someone else? List them here, because I still see that you still don’t get it and it is unbelievable. Go on, list them here.
Loota said…
The “risks” that the multi-millionaire finance company owners took vis a vis their thousands of now truly ******-over clients and former employees.
The owners (including their shareholders) were the losers and not the employees. Guys, you still don’t get it do you? Besides, there is failure in capitalism and that’s its nature. Failure must be allowed to take place.
Loota said…
Makes the lie of the free-market neo liberal posture even more obvious and self serving.
There is no lie at all, besides you keep bringing up free-market, fully knowing that there is no such thing exist. You’re blaming today’s disaster as the failure of free market but you’re clearly misguided. Did you watch the John Stossel’s series on crony capitalism that I linked to above? What part of that talk show series that you don’t understand? There is no free market today. There is indeed countries with mixed economy including NZ. How can you keep saying that free market failed when in fact you know well (I assume that you know the difference) that there is no free market anywhere in the world. I think that you’re being disingenuous here, because I’ve already pointed out to you in one of the threads in the past that free-market doesn’t exist in the real world and here you are bringing it up here again.
The fact is nations which provide R and D tax credits get more investment and this investment creates high paid jobs. And those in high paid jobs then afford more services (even at high prices resulting from rising minimum wage policies).
Businesses reliant on loans to finance R and D are higher risk – thus struggle to attract venture capital. Whereas in nations where R and D is supported, venture capital is more forthcoming, which reduces the need for costly bank finance.
Reducing business risk, also changes bank lending practice – as there is less need for home mortgage security (which limits access to finance).
The idea that making it harder for business by not providing R and D support is somehow a more realistic approach is so wrong it’s hard to imagine from what other planet some people draw their ecoenomic model.
Maybe NZ should keep doing what we always do – put capital into developing houses. Trying to innovate and invest in technology and high tech enterprises to create a rich, advanced economy? Too hard basket.
At least we can be certain that we will keep a few more tradesmen and landscapers busy if we keep going with the property development route (as long as we don’t start eating into productive farmland). Bonus.
Does this from the OECD show that NACT have lied consistently over their one big policy = tax http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10644470
Once NZ gains one last position and becomes the lowest income tax burden country in the OECD, every wealthy person will choose to flood into this country to invest in new businesses, new industries. No more will kiwis choose to migrate to Oz for economic reasons. In fact, they will all come back, and bring the Aussies with them. Its obvious that is what will happen.
Wait – how come we don’t have the second richest economy in the OECD if our income tax burden is already the second lowest???
Whoops, I guess that’s the NACT economic “plan” out the window.
I have an idea, 0% company tax rate for a decade for Green industries, we are at Hubbard’s peak now and we only get one chance at alternatives…
Not bad Jeremy, however since these Green industries are not going to make a profit for quite a few years, a 0% company profits tax rate is not going to help very much initially…I suggest 100% local govt rates relief as an option, and with companies who are compliant with top occ health standards, having the Govt pick up 100% of the ACC levy.
Its late just randomly shooting ideas now.
Of course the employer takes risks, I am not sure anyone is disputing that. And many employers worked hard to ensure they didnt have to lay off employees in hard times. For most employees it’s hard to work harder than they currently do.
Workers are not fools falafulu, they know when the business has hit hard times, and they lose sleep over their job, will I lose it, will I be able to get another, can I pay the mortgage now I am down to a 9 day working week… what they dont have is any sense of control over this. While the employer is going to the bank, cutting costs, pushing harder on sales and so on… their is a sense of control, of being able to change the situation. That is not to be underestimated. MOST workers are unskilled, they are very susceptible to recessionary times and the associated risk/worry.
As for capitalism, you are correct and it defeats unskilled workers too because its various mechanisms, including education, demand a large unskilled workforce to achieve the “success” of the few high level “capitalists”.
The risks, and sleepless nights are caused by different factors as between workers and employers. In the good times the worker still gets the minimum wage, what does the employer get?
A “large unskilled workforce” can’t buy or produce much, but capitalists “demand” one?
SPC said…
Whereas in nations where R and D is supported, venture capital is more forthcoming, which reduces the need for costly bank finance.
Yo, that’s crony capitalism. When venture capitals see that the government’s dollar is involved, they think to themselves, umm, lets get involved here because some (or most) of the risks is carried by the taxpayers. It is natural that you would do that (i.e., waiting for someone else to move first before you get to be involved). One of the reason here is that when Venture capitalists see that the government is keen to get involved, they’re ready to jump in and invest, since the risk is being socialized i.e., being distributed to everyone else (i.e., funded by taxpayer dollars), but if the business is doing or will do well (i.e., acquired or publicly listed) then the profit is being privatized. Where is the advantage here to the cleaners, the road workers, the burger flippers, there? It wouldn’t change their pay scale that much.
The other point is there is no one stopping anyone from doing R&D using their own pocket. The issue is that the taxpayer (from government supported R&D) will carry the risks but if the business is doing well, then the benefits go to only a few. If the business goes belly up then the taxpayers lose their tax dollars. I mean tax dollars that some taxpayers wished that they’re being returned to them via tax cut for their hard work. This is what’s wrong with crony capitalism. Stop picking winners. Suffer the loss & the consequence if you made bad decisions or just being incompetent in running your business (I did) like everyone else. Reap the benefits of your hard work like everyone else.
I see that Fisher & Paykel welcomed the news of the R&D funding package, i.e., they love crony capitalism.
Why not give businesses give them a decent tax break as David Shearer suggested on this blog post? Besides, it their (businesses) money that being taken away by the taxman in the first place. Give them back some of what is rightfully theirs?
So, hands up those here that would be happy to put their hard earned dollars to invest in an R&D fund if the government sets up one? It is time that government worshippers here do exactly what they’re advocating for. Lobby for the government to establish some R&D fund, where taxpayers can participate voluntarily. This fund should be use for funding of R&Ds for businesses. See, when one manages his/her own money, they’re very careful, but when other people or someone else’s does (e.g., the government), they’re not. In other words, government worshippers here aren’t willing to stump up the cash themselves if they see business opportunities in investing in such R&D fund company (set up by the government), but they themselves are happy to see the tax dollars of the low wage earners being taken away to fund R&D for businesses of which they had no say at all in those decisions.
C’mon folks, start-up an R&D fund Management Company. If you think that it’s going to give you good ROI, then what’s holding you back?
F.F., Singapore, Japan, South Korea, Taiwan all completely disagree with your model for R&D activity. And as I have pointed out before (and probably will do so again), the US Govt subsidises advanced applied research and tech development in their country through tens of billions of dollars of DoD, DoE and NASA spending.
NO COUNTRY, NONE AT ALL, ZIP of any technological or scientific standing has achieved that status using the funding models that you are proposing.
Loota said…
US Govt subsidises advanced applied research and tech development in their country through tens of billions of dollars of DoD, DoE and NASA spending.
You don’t have to tell me that. I already know that, since I read lots of technical peer review engineering/scientific publications (just about every journal – since to be an industry consultant, you have to be an expert or know more than everyone else) and I frequently see where the source of funding came from which enabled that research work to be conducted thus leading to a publication. But here is what I can tell you. With or without Uncle Sam subsidising or funding R&Ds in some US industries, capital ventures will still stump up with the cash to fund the industries that they’re willing to make a bet on, e.g., Sun Micros system was privately funded and so as Google (plus thousands of others).
What else that spilled from Uncle Sam’s R&D subsidies into the wider industries? Well, nothing much. Most of the US military R&Ds are being kept secret and so the wider industries & outsiders cannot get access to them in order, to be used in commercial developments/productions. Microsoft doesn’t get taxpayer dollar for its R&Ds and so as IBM, Intel, Google (and others). So, your example is at best a misunderstanding on your part or perhaps you didn’t know. If you dispute of what I say, here, then go on and list the technologies that were originated from Govt R&D subsidies which spilled to the wider industries?
The reason for US phenomenal technological growth over the last century, is that because their past pioneers & entrepreneurs had planted the seeds for a winning culture from long time ago (early last century onwards). Prof Cusumano, which I linked to above, mentioned that very point in his first free public lecture that was held at Auck Uni business school about 3 years ago.
US govt subsidies do help in advancing knowledge/technology, but remember they’re just one part in a network of components that made up an economic system. If one component fails to fire (ie, no Uncle Sam subsidies), others (private) will still fire, thus keeping the system alive.
FF said
To answer your question, think about where Bell Labs received its funding and who invented the first transistor. And what that transitor led on to in terms of ICs and VLSICs. And now modern microprocessors.
Or how the roots of the internet arose in the 1980’s – which Google, Yahoo! and others have all been founded upon.
You should also look at how many engineering departments at US unis receive funds, scholarships, chairs, etc from the DoD, DoE, NASA etc, then how many of those grads get employed doing military tech work, top secret work etc, then leave, lose their clearance and then take their expertise to work for MS, Google, Intel, IBM, AMD, Texas Instruments, etc.
The last para of your post confirms to me that you understand very clearly the US situation is not just about monies, but also a huge network of human resources, experience and skills that US Govt spending produces as part of its interaction with and support of the private tech sector.
This statement:
I definitely like and largely agree with, but as above, I would also argue its certainly not the sole reason.
I shouldn’t even go on about how IBM was almost entirely sustained by US Govt mainframe and supercomputer contracts for decades…the company which went on to give us the modern PC, and gave MS (via DOS) and Intel (the 8088) their leg up.
Very good chances that without Govt support of IBM, Intel and MS would not be where they are today.
ghostwhowalksnz said…
… his idea of research grants for industry is money for F&P to fix their Dishdrawer and make it overseas
To be fair here to F&P, they co-sponsored with others some of the conferences for Mathematics in Industry Study Group (MISG) that was held at Auckland & Massey University (Albany Campus), in the past few years of which I had attended. It was Hon Dr Michael Cullen (Deputy PM) who was the guest speaker for the MISG event of 2006. I am pretty much sure that Dr. Maharey was the opening speaker at the same event because I wasn’t there at the start. I was late by 10 minutes, in which I walked right in during Dr. Cullen’s speech. So, this means that F&P was willing to spend money on sponsorship in order to solve a product design problem of theirs.
F&P went to MISG (& other participant companies) to see if top mathematicians in the country could solve a design problem for their new type of washing machines. What they found out, that at certain spin frequencies (not the entire spectrum), the washing machine suspended drum started to wobble, which caused a lot of noise and not only that it made the whole operation of the washing machine unstable. They were seeking a mathematical physics model that could lead to a design which would have eliminated the wobble at all spin frequencies. We know that a washing machine that wobbles, will not sell. Here was F&P’s problem short summary.
Problem Background:
Observations and the industry partner’s experience suggest that eccentricity is relatively small during the low speeds of the wash cycle (say below 30rpm) and during the high speeds reached towards the end of the spin cycle (above 300rpm and up to approximately 1,000rpm) but that there are two speed ranges (traversed during the spin cycle) where the eccentricity can become large. The first occurs typically between 30 and 60rpm and across a narrow speed range (for any given configuration and load). At such low speeds the drive motor has abundant torque and the undesirable eccentric motion can be avoided by rapidly accelerating through the speed range where it would occur. The second speed range occurs typically between 150 and 300rpm and (for any given configuration and load) prevails over a wider
speed range. This wide speed range combined with reduced motor drive torque available at these higher speeds mean that it is not possible to simply rapidly accelerate through the speed range and careful attention needs to be paid to the design of the suspension and the balance rings to achieve acceptable behaviour.
The full paper is available if any engineer is interested in how or what academics can do to help them in their product development (provided that they pay for or fund the R&D themselves).
DEVELOPING AN UNDERSTANDING OF WASHING MACHINE DYNAMICS
There has to be a mix of private and public R&D spend. But when we look at other like-sized countries – Finland, Denmark, Norway, Singapore, we find that R&D spend is at least twice ours and the biggest gap is the private sector investment in R&D.
What angers (I’m being polite here)me is that of course companies will welcome a grant, but it doesn’t encourage a change in R&D culture in our private sector, but instead more state dependence. Aren’t we trying to crawl out from that and just make it easier for business that generate our growth?
It also seems it will disadvantage the smaller, smart companies with ‘out there’ ideas – who might have at least been helped by a tax break. F&P Healthcare are saying thanks we’ll take $2.4m if we can get it, but the guys on the edge miss out.
Check out Phil’s speech yesterday if you haven’t already. The R&D stuff is there, but so is some initial thinking about monetary reform, savings (Andy West came out swinging for it in today’s Herald) etc. All good stuff. Increasing our prosperity is about getting behind the people who make it – the exporters. We all get the benefit from that.
G
FF!!!!
@David, it is very strange that on this policy Labour is for essentially massive tax cuts and National is for large state intervention…
National’s R & D policy of envy..?
Or a secondary thought, could it be having received massive state support from his childhood (school, housing, benefits, university) to attain great heights, Key recognises it’s potential benefit..?
Loota I think there’s a difference between IBM winning government contracts and being ’supported’ (subsidised in various ways).
Loota said…
To answer your question, think about where Bell Labs received its funding and who invented the first transistor.
The first (primitive) workable transistor was invented by physicist Julius Lilienfeld and he patented it in the mid 1920s. Another early pioneer in the development of transistors was Oskar Heil from Germany. Both their work predated the work of physicists (Bardeen, Shockley and Brattain) who did researches on transistors at Bell in the late 1940s, 1950s which lead to its invention/development.
The difference here was that Lilienfeld’s model had severe limitations, because he used classical physics theories (Maxwell laws, Kirchoff’s, etc…) in his design. Quantum mechanics or QM for short (Matrix Mechanics as it was called then) was just being born at the time (i.e., early 1920s), pioneered by Heisenberg, Born, Dirac (and others). QM solved lots of technical difficulties that classical physics posed. The 3 Physics Nobel Prize winners (Bardeen, Shockley and Brattain) for their invention of modern transistors used QM rather than classical mechanics, which was superior to what Dr. Lilienfeld had invented in the mid 1920s (remember QM theory was just being born at the time). Had Lilienfeld invented his transistor from anytime in the mid 1930s onward in which QM theory would have been well developed & advanced by that stage, he would have been the one to have had won that Physics Nobel Prize and not the 3 Bell Lab physicists mentioned above. Again, as I said before, that US subsidies helped, but with or without it, inventors would still popped up all over the US.
There is another technology that is pervasive everywhere today in our lives is the laser. Einstein first theorised its existence in a paper he published in 1916, titled “On the Quantum Theory of Radiation” that appeared in German physics journal called, Annalen Der Physiks. In the 1950s, American physicist Charles Townes first developed the laser technology (he started with MASER at the time – which is microwave rather than light) at Columbia University (which is private). Townes went on to win a Physics Nobel Prize for his inventions.
Loota said…
IBM was almost entirely sustained by US Govt mainframe and supercomputer contracts.
Yes, but had any other private organisation paid IBM at the time to develop them the technology for their own use, then what’s the difference? The technology would have materialized anyway, with or without government help and that’s a fact. Here is something for you to ponder about.
The next revolution in modern electronics is the field of photonics. I am aware that Intel and other private companies are racing to see who developed the first fully functional and workable photonic chip. I am not aware of any US government funding or involvement in the development of this next generation type of chip. The semiconductor based chip & devices will disappear (or to be precise – a thing of the past), because they have almost reached their physical limitations (electrical wise and size wise) imposed by the laws of quantum mechanics. If you haven’t seen what a photonic chip looks like, then see the following link (signal flow animation).
photonic chip
Here is an article that summarizes the technology.
Photonic chip chases terabit processing
The size of the chip is about a square centimetre. I saw this prototype chip first hand during a presentation by an Aussie professor (Ben Eggleton) at a symposium for the opening of the Dodd/Wall Centre for Photonics at Auckland University Physics Department in 2006 of which I attended. The chip was passed around in the lecture theatre during the presentation. Eggleton said in his presentation that it will probably take another 4 to 6 years before any commercialization appears in the market. He said that Intel (including various players in the microelectronic industry) is doing its own R&D into developing photonic chip technologies.
My overall point here is that technologies will emerge with or without government R&D handouts. There are lots of technologies that I can quote, but I think that I’ve already given enough examples here.
Yes they will eventually, but in the examples you cited, if the Govt had not had a hand, emergence would have been delayed for several (possibly many) years.
And technology is not just about the tech, it is about the timeliness of the tech, especially when international competitors also have their eye on the prize.
The development of the first nuclear weapon is another example of a time crucial technology in which the US govt played THE central role.
Re: Photonics – I’m not up to speed with this area, but, much of the performance of a photonic system for the next one or two decades is still going to be gaited by the switching frequency it is possible to achieve with electrons in silicon, not with photons.
Again, IBM is one of the leaders in this field. And they would not be here except for what you term “Government handouts”.
That’s my understanding from an outsider’s perspective anyhows – photonics is not my area.
Loota said…
but in the examples you cited, if the Govt had not had a hand, emergence would have been delayed for several (possibly many) years.
Ok, let’s say we agree that the Govt handouts in those days brought forward those inventions into the market sooner. But that was then (decades ago), where there were not many venture capitalists available. In today’s environment, Govt funded R&D projects haven’t had much impact (as leading) or the domination it once had 60 years or so ago (e.g. : birth of Silicon Valley, Space Exploration age, etc…).
Private industries today have overtaken, in just about every field of technological development & commercialization, from software to hardware, so I can’t see the point of why the government doesn’t just give taxpayers a tax cut. They don’t have to dish out free money for R&D projects in the private sectors, since there are more venture capitalists today than they were 60 years ago, who are willing to bet their money on entrepreneurs out there. Let the private industries carry the risks themselves and not burden the taxpayers by keep taxing them to the neck in order to act like a Santa Claus to private industries.
Loota said…
switching frequency it is possible to achieve with electrons in silicon…
There are a number of technological problems here in electron conduction when switching frequency increases, i.e., high-speed (or ultra-fast) and one of them is the dramatic increase in the level of quantum noise (QN) from electron conduction at high-frequency switching. QN is a different beast altogether from classical Gaussian (probability distribution) noise (GN), which is found (i.e., GN) in most modern day microelectronic devices. GN can be minimized (via digital filtering or via signal conditioning), but QN is very difficult (at current technology), so this is one limiting factor in trying to design faster & smaller semiconductor devices, because their quantum limit wouldn’t allow anything to go faster than a certain cut-off frequency or even go smaller than a certain cut-off size because quantum effect dominates. QN contains bursts (from uncertainty principles) from both signal amplitude & phase.
This severe limitation of semiconductor devices will be solved by photonic devices. The main reason here is that the QN (quantum noise) in the light/photon can be minimized by quantum squeezing (QS), which is something that you can’t do with electrons. QS technology is still primitive at this stage but it is improving, and private industries are spearheading its development. Here is a good summary of QS:
Squeezed Light
Physicist Roy Glauber shared the Physics Nobel Prize in 2005 for his contribution in this field (Quantum Optics). Most physicists think that had our own late Prof. Daniel Walls from the Physics Department at Auckland University is still with us today, then he should have shared the 2005 Physics Nobel Prize with Roy Glauber (his PhD supervisor), because late Prof. Walls was a pioneer in the development of the quantum squeezed states theory. I often hear about this from others at conferences that I have attended.
The US Government hasn’t lead in the technological revolution of the last decade or 2, because private industries have overtaken. Its time that they (government) should give taxpayers tax cuts and let private industries stand on their own 2 feet.
NZ had a think tank once which attracted many of the brightest scientist in NZ and largely kept them here developing a massive support for industry.
Roger Douglas helped dismantle that and National pushed it over the edge.
The best science and development comes from work outside of the restraints of commercial gain.
We do not have a body like CSIRO but we had one once.
The selective handouts to manufacturers for low level R & D is a squib.
The shuffling of funds to create a headline is also about nurturing some well known firms not innovation of ideas and new horizons.
Who employs a top mathematician – I would suggest hardly F & P.