Prime Movers sector report: Research and development

By DR ALLAN FREETH*

Everyday it seems another block of the agricultural research establishment is lost or its focus changed, and one has to wonder at what point the edifice will tumble down.

Historically, we have had some of the highest quality scientific training and some of the best agricultural research institutions in the world. We have had a farming community that has adopted new technologies with vigour and often been the driver of ideas for research projects and initiatives.

In few other industries have the endeavours of science and business come together to drive to the nation's heart and economic well-being as they have in this country. It is a record New Zealanders can be proud of but as a businessman sitting on the boundary of commerce and science, I am worried that we are losing our way in agricultural research.

Driving developments are a series of policy decisions and market-driven thinking that has the veneer of logic and rationality but lacks the wisdom of past experience, misunderstands science, and believes commercially driven outcomes will solve all the problems of the world. There are around 393 organisations in New Zealand with a so-called life sciences focus including:

* 42 core biotechnology companies.

* 9 crown research institutes.

* 8 major universities.

* 7 significant private research institutions.

* Numerous producer board spin-offs.

Most are in competition with each other in some way, many are duplicating core competencies and technologies. Most are racing to secure patents before others. Inside most you will find not the "white coats" of working scientists, but the "suits" of hopeful entrepreneurs and start-up champions.

I do not want to apportion blame or criticise any one organisation or its members. The problems stem from the system's structure and are compounded by an overall lack of recognition of agriculture's role in the New Zealand economy.

Policy advice is given to Government that then states the direction of science to the Foundation for Research Science and Technology (FRST) that, in turn, creates the market signals. At present, this process leads the research institutions to become schizophrenic.

Are they for research or profit? Are they for industry good or shareholder good? Should they own the intellectual property or share it? Should they make money for us by competing to get money from us?

The policy signals to Crown Research Institutes and the universities are skewed too far towards commercialisation at the expense of applied research. The FRST priorities and processes are not supporting applied research, and the Government contribution to traditional agricultural research is decreasing.

We don't have strong collaboration between end-users, industry, universities and research institutes, and we don't have a stable long-term research and development funding environment.

Most importantly, we don't have a coherent and shared industry vision.

We have gone from a situation that was not perfect - where research was often prolonged and often not driven by market demand or usefulness - to an almost worse situation, where commercialisation is emphasised more than anything.

Now, misdirected research is frequent, and competitive islands of research exist - with a tendency for duplication. Our commercialisation pipelines have a poor idea of what will add the greatest value to end users and the global marketplace.

The focus seems to be on the opportunity for the researcher to gain commercial advantage, and as soon as possible, rather than the industry and end-users which often fund them. If you can't patent it, license it or leverage it into more attractive human health sciences, it's unlikely to be pursued.

Traditional agricultural research may not be sexy to policy advisers and the financial markets but it has driven significant economic wealth creation in this economy.

The potential biotechnology offers agriculture may be exciting but it is, as yet, an unproven wealth creator in this country or, indeed, probably any country.

For a nation whose existence depends on agricultural invention and innovation, this does not look good. For an economy, this is bad business.

There is no question that public and private research organisations are responding rationally to the signals they receive. From their point of view, it is entirely logical to "follow the money" - a route which leads them towards the biotech, rather than the traditional agricultural, production-focused research. As a result, three problems are emerging.

First, traditional agricultural research is being seriously damaged in terms of today's output and tomorrow's capacity. These disciplines are not being promoted, students and young people are not coming forward, and teaching time in these areas has been cut. The impact may not be seen for some years but once it is obvious, it will be too late.

Second, competitive funding processes are reinforcing a fragmentation that makes engagement by commercial entities, such as Wrightson, problematic, if not impossible.

Third, the present landscape is undermining the scientific process and its consequential long-term impact.

The funding strategy of reviewing sectors within output categories on about a six-year cycle means that when a group is unsuccessful in one round, institutions have no opportunity to retain the research expertise involved in the expectation or hope that the group would gain funding in the next review. There is inevitable loss in expertise and momentum.

Everyone in science knows the process is like building a brick wall; you take your own block and put it on the blocks of others. It was Sir Isaac Newton who said, "If I have seen further, it is by standing on the shoulders of giants".

The stop-start approach used now is completely incongruous with the long-term approach this country needs for agricultural research. New Zealand is unique among OECD countries in having an economy largely based around biology. Basically, our economy is a big farm, and our future relies on our ability to increase the value we derive from it.

New Zealand's primary sector scientists have led the world. We have developed efficient ways of turning grass and water into proteins. Our dairy herds and sheep flock are productive and disease free, their genetic base is known and is becoming well understood. Farmers' uptake of research advances has, in conjunction with our climatic advantages, made New Zealand a world leader in agriculture, horticulture, and forestry.

We have to remind ourselves that New Zealand's competitors can exploit science just as easily as we can. The competitive advantage New Zealand has is no accident. It is derived from the outcomes of previous research investment.

The threat is that the advantages we have gained through research will diminish rapidly as more focused, better-funded overseas activity, overtakes us.

By combining Government sector expertise with entrepreneurial ability, we should be able to achieve much more together than alone. Incentives to partner and co-operate would help, as would funding continuity, and the support to fund pure research that has no obvious commercial objective. For it is from this type of research that may flow the methods and knowledge for the big commercialisation applications of the future.

It is time that we had a fundamental look at the way we direct scientific endeavours, the way our research funding is granted, and consider what outcomes we need, given that our economy is founded on agriculture.

If there is a role for organisations like Wrightson, it is to fill the vacuum of leadership in agriculture and science, with a call for an honest and open review of our situation, and for Government, research organisations, and commercial companies to be part of the change.

* Dr Allan Freeth is managing director of Wrightson, an agribusiness servicing company which helps farmers and processors improve their profitability.