Our tech companies, more often than not, are snapped up by deep-pocketed offshore companies before they have a chance to mature. Our manufacturing sector struggles to compete against cheaper competitors such as China.
In our favour, we have a good tertiary education system, a high concentration of researchers at our universities and state-owned research institutes and our scientists and companies have the third highest rating in the world for patent activity - a traditionally important measure of innovation.
Successive governments since the 1990s have identified the problems, paid pilgrimages to Helsinki and Tel Aviv, formed task forces and invested hundreds of millions of dollars in innovation initiatives - with underwhelming results.
The latest effort to light a fire under New Zealand business is the creation of Callaghan Innovation, a new Crown entity that subsumes the bulk of Lower Hutt-based Industrial Research and has been funded to the tune of $166 million over the next four years.
If there's scepticism in the scientific and business communities at the arrival of the new innovation hub, which carries the name of the late scientist and entrepreneur, Sir Paul Callaghan, it is understandable. Nothing Labour or National have tried has delivered the step change in the level of R&D undertaken in the country required to elevate us to the small, smart and wealthy category.
We largely missed the boat on the digital revolution. But the success of Peter Jackson's film and digital effects empire, global players like Fisher & Paykel Healthcare, Tait Electronics and Gallaghers, and our solid track record in agri-tech, gives us a pass mark overall.
Callaghan Innovation is in set-up mode, but Science and Innovation minister Steven Joyce expects it to assist New Zealand businesses "by connecting them with innovation resources, supporting them with R&D advice and funding, and strengthening their technological capability". Though industry observers are unclear exactly how Callaghan Innovation will go about its work, there is consensus on what it needs to do.
"Prove that the public and private sectors can collaborate in a world-beating manner," says Nick Gerritsen, director of clean tech start-ups CarbonScape and Aquaflow.
AUT University's Professor John Raine, whose Powering Innovation report helped inform the Government's innovation strategy, says the "single greatest thing" Callaghan Innovation can do is use its in-house science and engineering expertise to "catalyse a massive increase in the level of industry-demand-driven high technology R & D project activity in New Zealand."
Association of Scientists president Professor Shaun Hendy says without the scale of larger countries, Callaghan Innovation will have to find smarter ways to bring together researchers, entrepreneurs and businesses.
Success, he adds, will depend on Callaghan Innovation maintaining and growing its technical capability.
"We will be able to tell if it is on track in a year or two by whether it has been able to significantly grow the numbers of scientists and decrease the number of bureaucrats that work there."
Where we stand:
• R&D intensity: 30th
• Productivity: 25th
• High-tech density: 41st
• Researcher concentration: 12th
• Manufacturing capability: N/A
• Tertiary efficiency: 11th
• Patent activity: 3rd
Source: Bloomberg Innovation Top 50 When it comes to global comparisons of how innovative countries are, New Zealand comes in middle of the pack.
Peter Griffin is technology columnist for the New Zealand Listener and editor of Sciblogs.co.nz
