By Yoke Har Lee
The debate about whether high-tech industries should get more of the Public Good Science Fund (PGSF) is moot unless the Government can speed up the development of the high-tech sector.
Advance technology contributes only about 7 per cent of New Zealand's GDP, according to figures cited by Industrial Research Ltd.
Ireland and Israel, two countries often compared with New Zealand, have managed to push their high-tech industries much further ahead through forming astute fiscal policies.
"What we should be aiming for is not what [looking at what] to do with the money, but to put policies in place which stimulates offshore companies putting their research centres here," said John Blackham, a software entrepreneur and founding member of the Intellectual Capital Foundation, a trust grouping businesspeople interested in preserving intellectual property.
Allocation of public research money constitutes a small part of the problem. The others are:
* The low absorption rate of technology and the ability to use technology for product development;
* The decline in science student enrolments; and
* Lack of financing for high-tech ventures.
The chairman of the New Zealand Biotechnology Association, Dr William Rolleston, said the tax structure was preventing multinationals from using our country as a research base. An influx of multinationals using New Zealand for research would help develop the infrastructures that would support wider research and development.
Mr Blackham shared the same view: "If I were the Government, I would want to ask Bill Gates, what do I have to do for Microsoft to put an research facility in New Zealand? Tell me what we have to do and we will do it because we want to build research and development facilities here. Then you actually start to build up track record for research and development."
Mr Blackham said he was not aware of any company putting money into long-term basic research with the exception of multinationals.
He cited the examples of Ernest Rutherford (who discovered a way to split atoms) and Thomas Edison (inventor of the lightbulb) to highlight why New Zealand needed to encourage more Edisons.
"In history, who do you associate with research? Edison or Rutherford. Edison produced electric lightbulbs, innovative new products. That wasn't research, that was development of new ideas.
"That's what New Zealand needs to stimulate right now because research does not, in itself, make money. The Rutherfords of the world do a lot of brilliant work with atomic physics, but they have to go overseas to make money with it."
Successful New Zealand companies like Tait Electronics have done well because they set aside money for research and development, he said.
"To have commercial organisations like Tait moving into research is a much better way than taking a research organisation and making it commercial," he said, referring to what the Government is doing with the Crown Research Institutes.
Another contentious point is whether universities or the research institutes were a better investment for the Crown.
Chief executive of New Zealand Institute of Horticulture and Food Research Dr Ian Warrington said some institutes, such as Hort Research, had shown Government money was well spent.
He cited Hort Research's work with the goldflesh kiwifruit and new variety apples as examples. "If you look at the apple varieties that are exported to the American market, they are getting 30 per cent premium over the average of all other imports into that market. Now that's value-added, that's sophisticated knowledge-based products that are generating those margins and that's what the primary production sector can do for the economy if the focus is right."
The University of Auckland's commercial arm, UniServices, has in a span of 10 years raised revenues to $25 million. Its chief executive officer Dr John Kernohan said universities have proven they could do just as well, if not better, than Crown Research Institutes at returning money on public investments.
He said universities, as demonstrated by Silicon Valley, provided the base from which research ideas mushroomed into business enterprises.
Mr Blackham said taxpayers should question, like an investor did, whether Government's research money was well spent.
He said NZInc considered it was not.
Call for Govt funding to focus on development
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