Technology NZ scheme up for a tweak

By DANIEL RIORDAN

The Government is considering adding repayable grants or loans to the range of assistance its Technology New Zealand scheme can offer small business.

The moves, signalled by Research, Science and Technology Minister Pete Hodgson, would be looked at over the next 12 months, and are in response to the findings of a consultant's report into the scheme's effectiveness released last week.

The report, Evaluation of Technology New Zealand, was compiled for the ministry by Infometrics. It concludes that Technology NZ is meeting its primary objectives of enabling firms to invest in research and development to expand their business.

But it adds three significant riders to that conclusion:

* The impact of the scheme is concentrated on a relatively small number of firms rather than across a rapidly increasing number of firms.

* The role of Technology NZ in generating business growth is not clear. Few firms among the 600-plus surveyed claimed Technology NZ was crucial to their performance (although the report notes that it would be a concern if it were).

* The report findings might be biased by the fact that the firms surveyed which had received Technology NZ funding tend to be among the most go-ahead companies and generate above-average performance anyway.

And although the evaluation found the scheme was very well run, some applicants found the application process too time-consuming.

Mr Hodgson pledged to address this problem "while making sure we still have the robust processes needed for public accountability."

Technology NZ is administered by the Foundation for Research, Science and Technology. Its funding totals $36.5 million in the current year.

Firms can get support to help develop technology strategies, carry out research and development and technology projects, have access to expert advice and second graduates, expert scientists and technologists for their organisations.

Since 1995, Technology NZ has invested almost $93 million in more than 1500 New Zealand businesses. The report said the number of projects funded each year had risen from around 100 to more than 700.

"The managers of those businesses estimate that Technology NZ has been directly responsible for increasing their turnover by $335 million and creating 2134 new jobs for New Zealanders," said Mr Hodgson.

The report's authors held face-to-face interviews with about 25 stakeholders in the scheme, with five investigated further using case studies. Around 600 firms that received the funding over the past five years were surveyed by mail and Technology NZ's database of approved projects was also studied.