By RICHARD BRADDELL
Technology New Zealand's scheme to encourage research and development has put more than $10.5 million into research projects in its first seven months of activity.
The scheme, known as GPSRD (Grants for Private Sector Research and Development), supplements Technology NZ's existing grants scheme.
Between the two schemes the Government agency provides around $36 million a year for private sector R&D.
Its Technology for Business Growth programme aims to lift the technical capability of New Zealand businesses, while its GPSRD money is earmarked for research and development.
Because of the higher levels of risk involved with its activities, the GPSRD fund advances a third of a project's cost, compared with the half that can come from the TBG fund.
The TBG was aimed at lifting the technology capability of businesses, because New Zealand needed more exporters of high value, high margin items to high margin markets, said Technology NZ's Tony Hadfield.
"We've got to make the assumption that a lot of those businesses will be based around some sort of proprietary technology.
"It's very hard to sustain any kind of competitive advantage without that."
He said the TBG fund would not support commercial risk, but was available to support the technology risks faced by commercially sound businesses.
"We are unashamedly focused on people who can demonstrate commercial viability."
Technology NZ would pay the initial costs of R&D, but it would not pay tooling up, marketing and intellectual property protection costs. These could be met by the new state agency, Industry New Zealand.
He said GPSRD's approach was conservative in that the agency provided an incremental grant over a company's previous year's research spending.
"We look at the programme, look at the increase of expenditure, and say we will support one third of that increase."
Mr Hadfield said research showed that every $1 granted under the TBG programme was matched by around $7 of expenditure by the companies involved in the programme.
He said that the uptake of GPSRD had been strong and there had been amazing interest in TBG during the second half of last year, although that had since tapered off.
The lower level of interest could be due to a change in business confidence, he said.
"While R&D shouldn't be, it's still seen very much as a discretionary expenditure by New Zealand business which they will potentially hold back."
Businesses snap up technology grants
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