This is a great presentation. Watch it all. Or just skip to 7.47 to look at why we go backwards if the focus of the leader of the national party is all on tourism.
Archive for the ‘science’ Category
This is a great presentation. Watch it all. Or just skip to 7.47 to look at why we go backwards if the focus of the leader of the national party is all on tourism.
There’s an interesting contrast in today’s NZ Herald between its rather muddled editorial that appears to poo-poo the R&D tax credit and what our two largest and most innovative companies, F&P Healthcare and F&P Appliances, are saying in the business pages. Both companies speak of the research benefits they gained from labour’s previous tax credit scheme.
I’ve yet to come across a high-tech company – and I’ve visited a lot – that doesn’t believe tax credits are a great thing. The top 100 of these companies generate $6.5 billion and high value jobs. Inevitable perhaps they would say that because they benefit, but with those sorts of numbers, it’s not rocket science to work out that we all win.
Bringing in tax credits for R&D is the first part of Labour’s package to put NZ back on the path of growing the economy. Its key aim is to incentivise our exporting companies to invest more in new research, lift skills and build the clean, green and clever society.
National’s decision to axe the R&D tax credits in 2008 to pay for personal tax cuts, when the scheme was already in operation, was incredibly shortsighted. It highlighted Bill English as a bookeeper not a leader of the economy. But it ignored what is seen as international best practice. Only a handful of OECD countries don’t offer their private sector tax credits on R&D.
Ironically, Australia has lifted our tax credit policy brought in by the Labour Government and is currently passing through their Senate now.
Tax credits incentivise business to do more R&D. They boost our private sector R&D spend – currently languishing at about one-third of the OECD average. And, at 12.5% if the full budgeted amount exempted tax is reached, the R&D spend by our companies will lift to more than $2 billion.
All the literature shows that increased R&D translates into greater productivity and lifts economic performance.
The grants and vouchers announced by Mapp last year – after a wait of two years after axing the tax credits – are effectively handouts from government. They lift government R&D spend slightly, but encourage business to put out their hand for a hand out.
And who gets a grant is decided by a Wellington bureaucrat not an entrepreneur. Only 40% of those applying for grants were successful. Those who missed out are the innovative entrepreneurs with smart ideas and need that lift.
It’s a first step to increase our productivity, but don’t underestimate the importance of pushing R&D.
What’s happening in science and to our Crown Research Agencies? Well, it’s difficult to work out, but Minster Wayne Mapp has been musing out loudthat it might be good idea to shrink them down from 8 to 3, or maybe 4 or 5. Why? Well that’s unclear. The Association of Science put it down to a ‘rush of blood to the head’. Vernon Small put it quite aptly in Stuff.
In fact it’s difficult to work out whether it’s Mapp’s idea or whether Bill English had a word and asked Wayne to make it look like he’s doing something – like some of the other mergers in the past few months.
Usually we have a plan and any restructuring follows to meet the plan’s objectives. The problem here of course is that there is no plan, just a rush of blood.
Sometimes when I see contests like New Zealander of the Year I have my doubts about the ability to judge such diversity of achievement against one another. But the choice of Paul Callaghan is one that I am so delighted about.
Paul is a remarkable person and remarkable New Zealander. Many people will have come to know him from his slot on Kim Hill’s show that demystified science and related it to important everyday issues. His work on nanotechnology and the establishment of the MacDiarmid Centre at Victoria University are enough alone to justify the praise that Paul is receiving.
But for me, more than that he is someone of vision. Paul was the guest speaker at the first Peter Fraser Memorial Dinner that we held in Wellington in 2009. His vision for a New Zealand where we use science, research and development to create new economic and social opportunities is exciting. (You can read about it in Wool to Weta.) More than that he links to the importance of reducing inequality, something I understand he talked about when receiving the award the other night.
And Paul is also a man of courage. His public battle with cancer over the last couple of years has shown all his characteristics- never giving up, always looking for a new angle or solution and doing it all with good humour and humility.
A highly deserving winner, congratulations Paul.
The new head of the newly created Ministry of Science and Innnovation is Murray Bain (formerly the head of the Foundation of Research, Science and Technology, FRST). He was touted by Wellington insiders as the one who would get the job long before recruitment began.
Is he the best person for the job? He could be, it’s just we’d never know.
The job was advertised for just 2 and half weeks – hardly what I would call a concerted international search to attract the best and the brightest in the world which is what this new position demands. Did we approach world leading countries in innovation, such as Finland, Denmark, Singapore? In that time I doubt it.
The government is spending money and energy amalgamating our science departments, supposedly to herald a step change in science and innovation. Mostly, it’s activity to give an impression it’s doing something. This nudge, nudge, wink, wink approach to recruitment that the government seems to stand behind is further proof it’s not serious.
The hi-tech sector is in the NZ Herald today – telling a story that many of us already know, but doesn’t get much coverage.
Our top 100 hi-tech companies earn $6.7 billion and still show positive prospects for growth. Greg Shanahan, the founder of the Technology Investment Network predicts the sector could outstrip dairying. Bold words, but wouldn’t it be good see this sector growing – and diversifying our economy?
If we want to catch Australia (a pretty naff goal if you ask me) we’re going to have to grow dairy 5 times. Can’t imagine 5x more cows or that amount of new productivity. The hi-tech sector – commercialising smart ideas on the other hand has less or no carbon miles, produces smart, high paying jobs and generated export revenues. It has more potential if we get behind it.
Nearly 80% of what our top 100 hi-tech companies produce is exported.
A good story that gets too little attention.
It’s been a week meeting more of our clean, green — and sensationally clever companies. These are the ones that are leveraging off our branding and developing clean, green products with some smart technologies and creativity — ‘clever’ stuff. They’re high value, highly skilled and good for the environment. See the Listener’s good cover on Philip Mills this week.
LanzaTech the other day: it has found a way to convert the waste from steel mill smoke stacks into fuel. It’s all to do with a bacteria found in rabbit shit apparently. What was it we said about NZers being
able to think outside the box?
The world’s biggest steel maker – by far – the Chinese, are hugely interested of course and have also invested in the company. If it goes to plan it will match the revenue of our wine industry in the next few years.
Lots of great ideas, some are havin difficulty getting them to market.
As Trevor mentioned in his Alicetown blog on 1 September there’s a number of us very excited by what’s out there and how to develop some creative policies around how we back them better.
On Monday the State Services Commission opened applications for the new CE for the new Ministry of Science and Innovation. It’s the new ministry formed by amalgamating the Ministry of Research Science and Technology (that provided policy and advice to Wayne Mapp) and the Foundation Research Science and Technology which funded science.
The ministry’s new name is a really good one, I admit – and it reflects the importance science plays both for its own sake and driving innovation and our economy.
The question is can the new ministry live up to it?
As I’ve said in an earlier blog, this should be our opportunity to really launch a new vision for science that can drive innovation in NZ like they’ve done in Finland, Denmark, Singapore, Israel and other like-sized countries. They have really impressive science and innovation programmes, their economy depends on them.
The key point will be the person selected to head the Ministry to set that vision. So it makes sense that we cast our recruitment net wide for a new CE to attract the best international expertise and best practice.
That might not be what’s happening, however. Vacancies for the CE opened last Friday 25 June and will close 14 July. That’s a bit over two weeks. Tell me how you troll the world for the best in the business in that time?
The answer is you don’t. It’s looking more like pat, pat, wink, wink.
In the meantime, I’ve sent in a few written questions to Mr Ryall (Min of State Services) to ask what procedures were followed.
It might well be that the best applicant is here in NZ, but will we really know? And, wouldn’t it be good if we did select a Kiwi from a top class talent pool?
Good one Dr Mapp – tell me, what directions did you give? Here’s your aspirational, step change new Ministry.
Hi RA readers – I’ve been off air a bit lately due to running around the country on the post- Budget speaking tour, and because my laptop died!
Today parliament shifted into a new stage of the Budget debate – the Appropriations Bill that legitimises the Supplmentary Estimates (amended spending lines) between Budgets 2009 and 2010. It was remarkable for what it does not say – nothing about a plan for protecting jobs or lifting incomes during the worst of the Great Recession. No new ideas over there.
Quick feedback from the Budget tour: spoke to about 20 groups, a mixture of Labour-organised public meetings, community sector groups and businesses. Hard to tote up exactly but would have seen close to 800 people face to face: groups of 160 down to about 25, plus individual business site visits.
The feedback was clear: most Kiwis understand that by the time inflation of 5.9% next year eats away the tax swindle, and wage growth is held down, they will be worse off. That includes increased govt charges like ACC and ECE, plus power bills, rent and higher mortgages. The Government made the classic mistake of overpromising and under-delivering. Kiwis hate the rise in GST. They know the tax cuts aimed primarily at the wealthy are unjust and inefficient.
Was it a coincidence the govt’s polling fell 5% in the week after the Budget?
Second, businesses and commentators understand that the Budget lacks a real plan for jobs, incomes and growth. Fiscal prudence matters, but it is no substitute for a strategy to address the yawning triple deficit around the savings gap, current account deficit and innovation deficit. Gutting Kiwisaver, the R and D tax credits and NZSF prefunding made these worse. The Govt’s innovation package, which represents only 39% of the value earlier striped out, has been almost universally panned.
Third, the added debt from the unaffordable tax cuts has opended up $1.1 bn fiscal hole over 4 years, $9.2bn over 12 years, and that makes the job of turning the boat around ever harder. National will seek to fill this “strategic deficit” through asset sales and service cuts. Don’t let them!
Future posts are going to broaden out somewhat to the rlated issues of monetary and fiscal settings that surround the needed economic strategy.
I was struck by the sheer size of Fieldays at Hamilton when I visited yesterday. It’s truly extraordinary. It covers a huge area and is expected to be visited by over 130,000 people over its four days. It was also great to see the face of NZ agriculture at its finest – particularly as this year’s theme was innovation.
They even advertised my arrival. In Labour colours and font. Thanks to Tim MacIndoe who took the picture.
That event, and the MAF forecast of future prices is encouraging. Dairy, forestry, lamb are all set to rise. Even wool, which has been performing rather poorly is expected to rise over the next four years. That’s good news for the NZ economy.
I just hope it won’t be used as further proof by those who believe that shipping out commodities is our future.
We believe that at our peril. We need to be developing higher value products from our commodities, not just shipping ever larger quantities.
This was the message delivered in KPMG’s agribusiness report. It forecast increased demand for our commodities, but that demand is likely to be met with increased supply from Chile, Eastern Europe, China and others – some of our most welcomed exports is the farming expertise we’re delivering to less developed farmers in those countries.
Green, ethical, clean commodities from NZ will be our defining difference – and provide the premium – that our wealthier customers will be willing to pay. So too will be the new products that our R&D will create. They need to be sophisticated, clever, responding to our markets and with a low carbon footprint.
What we don’t want to do, with these optimistic forecasts is take our eye off that ball.
The news for tertiary education and students was all bad in the budget. I will do a specific post on the impact on students later, but I just wanted to address some of the headline effects of the budget on tertiary ed to start with.
There is about $99 million LESS going into the sector this year than last year. Say what? How is the economy going to get a “step change”, let alone the quantum leap we actually need, without investing in knowledge and skills?
The government will make much of the 1735 extra students they are funding in universities and the 3173 they are funding in polytechs. But these are not new students – they are simply funding the students already there whom the institutions are currently carrying as unfunded students. Steven Joyce says there will be 765 new students at universities. Divide that across 8 universities and you get fewer than 100 new students per university. Take the 455 new polytech students and divide them across the 20 polys – and you get 23 new students per polytech.
This simply won’t cut it. The government wants a step change to occur through science – who grows scientists? Universities and some polytechs, that’s who.
And don’t get me started on the cuts of $3.4 million to Adult and Community Education delivered through high schools. They only had about $3.3 million left last year………
It’s Budget Day. You’ll be hearing lots from us over the next few days and I hope many of you will join our Finance Team live here on Red Alert tonight at 8.30 pm.
Most New Zealanders already understand that a Budget that (at best) delivers only marginal gain to middle and lower income earners and a whopping great windfall to the top end, is not fair. It is however, precsely what you would expect from National.
Equally important, the Budget as it has been foreshadowed will not fix the underlying problems of this economy: lack of savings, skills, innovation and exports. These are exactly the themes Labour is pushing – as reflected in todays Dominion and Herald (note the Herald got the headline wrong).
If you don’t believe me on this – just refer to Swtizerland’s IMD World Competitiveness Ranking, which shows NZ slipping back for exactly the reasons Labour has been saying.
Think about it, if the problems are insufficient savings, exports, skills and innovation, how on earth is raising GST and an income tax windfall for the wealthiest possibly going to address that?
It proves our underlying critique of this visionless National Government – they had “nine long years” to think up policies to take the country forward, to deliver on the step change they campaigned for – and so far, nothing.
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.
Today, KPMG made a worrying announcement – New Zealand agriculture has “as little as five years before underdeveloped agricultural regions such as South America, Western China and Central Asia’s large scale intensive farming practices erode New Zealand’s cost advantage in producing bulk”.
Not for the first time, it is a warning that our reliance on bulk commodities will be undermined by places that can do it cheaper. Add to that, is that a number of NZ companies are making a good living selling our efficient farming practices around the world. And add to that the fact that the Chinese and others are really adept at taking existing technology and improving on it (do we really think agriculture is going to be the exception?) and our bulk commodity trade looks really serious in the medium-long term – undermined by efficient farm practices combined with cheaper labour costs.
Yes, as John Key and others note, there is a growing demand for food and protein out there. But there is also an increasing supply.
Two possibilities may maintin our edge. One is branding – NZ’s clean, green image – that distinguishes us from other factory farmed, less high quality products from elsewhere. The other is the development of high end processed products from our commodities that we develop through our R&D.
Currently the bulk of our R&D in the agricultural sector, for example, goes towards improving farm output. While this has made our farmers amongst the most efficient and profitable globally, much of this improved farm technology is open-source. In other words, the product of our publicly funded science can be replicated by others.
Increasing our prosperity means getting smarter. We’ve talked about it for a couple of generations, time to up the R&D around increasing value from our primary products.
Five years, isn’t a very long time. We need bold action.
Behind the mining debate is a more depressing story.
Mining our national parks is supposed to tap our rich resources, upgrade our economy, move us forward. It threatens to undermine our clean and green brand on which so many of our products rely.
Sadly, it’s more clutching at straws, trying to emulate Australia which we’re trying to catch. It’s ad hoc, quick fix, get rich quick. It’s short termism, shows a real lack of imagination, an absence of anything strategic, forward thinking or sustainable.
What we are not seeing is that Australia is not content to rely on its minerals. It’s investing in science – upping its investment by 25%. It’s giving breaks to innovative companies. Finland, Denmark, Singapore are all doing similarly.
NZ will not become prosperous overnight. It needs long term thinking, a commitment to capitalising on our brains and building innovation into our economy through our brightest companies. We need to be clean, green and clever.
It’s time for an economic strategy from the Key government, not a simple knee-jerk, bandwagon approach.
Reaction to the CRI Taskforce appears generally positive, especially amongst those working in CRIs. There is, however, quiet disquiet amongst some in non-CRI research institutions and of course universities. I’m less interested in institutions, but more interested in what is best for NZ science and NZ itself.
The first major recommendation – relaxing the stipulation that CRIs make a profit – seems sensible. CRIs should be creating value for NZ, not for themselves. They should wash their own faces, be self sustaining. But CRI scientists doing research offshore to enable that CRI make a profit is of no value to NZ.
But the other major recommendation – to grant CRIs more long term funding – raises important questions if the overall aim is to fund excellent science and NZ’s best scientists. It is accepted that science needs long term time horizons and scientists shouldn’t spend their lives filling out funding application forms. But couldn’t those two requirements not be met simply by lengthening the funding period? That would also enable more strategic science.
The CRI Taskforce recommendation essentially means shifting funding from a contestable pool into the CRIs with the aim that this increased share will lead to better science with all the spinoffs around innovation that we anticipate. We’re not sure yet what indicators will be used to measure that excellence within the CRIs, that will come later.
The opportunity cost is that this funding will not be available to scientists not part of the CRI system. Some scientists will not receive funding though their work might be better. My question is whether this move, therefore, lifts science excellence.
Of course the easy answer is more money for everyone, but that’s not the question, nor from the sound of it is new money a very likely prospect. It will provide job security and institutional stability for CRIs – a legitimate issue – and perhaps too what the Taskforce was thinking.
This is not to take a CRI side or a university one. Both have outstanding scientists. (I’ve noticed a tendency to type-cast as a supporter of one or the other). My motivation is to see the best science done for the greatest benefit of NZ. I’m at a loss to see how that necessarily follows from this part of the CRI Taskforce.
But maybe I’m missing something here, I’m happy to stand corrected – please fill me in!
Ray Avery was NZer of the Year last year. He’s a scientist which makes that unusal. And as a scientist, he has been able to look at the world through a scientist – and an entreprener’s eyes.
He believes the award highlights the role scientists play in NZ. He champions the motto – ‘clean, green and clever New Zealand’. Highlighting the clever is something we could easily take further. It’s true. But it needs some further marketing, perhaps first to ourselves who need to believe it most.
I am talking to him today at 9.05 on Planet FM, (104.6FM) my weekly radio show. On it he discusses how he has turned his science to work in developing countries. Moving on from his invention of cheap lens for those suffering from cateracts, he has also invented a $6 device which regulates the flow of drips into patients – replacing the highly inaccurate system that kills thousands each year.
And despite the low price tag, he argues that a few cents royalty on a product that will be produced in its billions for the third world, can also be profitable.
Another fascinating, “clever” New Zealander.