Universities have a model which successfully combines research and the teaching of bright young things. Photo / 123rf
Universities have a model which successfully combines research and the teaching of bright young things. Photo / 123rf
Opinion by Steven Joyce
Steven Joyce is a former National Party Minister of Finance and Minister of Transport. He is director at Joyce Advisory, and the author of the recently published book on his time in office, On the Record.
The Government aims to focus on growth, appointing Nicola Willis as Economic Growth Minister.
A merger of research institutes has been announced, despite concerns it may be costly and ineffective.
A new advanced technology institute will replace Callaghan Innovation.
It’s good to see the Government bouncing into the year with renewed vigour on the biggest challenge the country faces: learning to grow strongly again.
After years of the last Government ignoring at best the income-generating side of society which, after all, pays for education and healthand everything else we like to spend money on, it’s very refreshing to have a Prime Minister declare that this year is all about growth.
As the Economic Growth Minister, Willis’ job will be to corral the large cast of other economic ministers to achieve forward momentum on a host of large and small initiatives to make our boat go faster. And that’s a very good thing.
Those initiatives should all be subject to a simple test. They must help give businesses confidence and certainty to invest more and grow their businesses here in New Zealand. Everything else is window dressing.
I had a similar role for the last five years of the Key Government, and in my experience, it’s not an easy one.
Officials and ministers often have work programmes of initiatives which are put together for all sorts of reasons, like “it’s needed to be done” or “it’s something we always planned to do”.
These may have nothing to do with growth or, if implemented, could be counterproductive, especially in the short to medium term. Some contradict other initiatives of other ministers in related portfolios.
A laser focus on achieving growth is often as much about what you don’t do as what you do do.
So it was a bit disappointing and perhaps instructive that the first announcement as part of this new focus on growth included a reorganisation of the deckchairs in the New Zealand science system. This is the product of a year-long review led by former Chief Science Adviser Sir Peter Gluckman.
While there are some good ideas in Thursday’s announcement, like a renewed focus on international investment and a plan to share intellectual property rights for inventions with government researchers, a key initiative was yet another merger, this time of the Government’s research institutes back into something akin to the old Department of Science and Industrial Research (DSIR) which was euthanised back in the 1990s, although into two entities rather than one.
The DSIR was broken up because it was a large, cumbersome entity which did not do a good job of serving the industries it was supposed to assist.
A series of smaller institutes were created with the job of doing applied science for the industry they were delegated to. To ensure they were useful, board members were drawn from those industries so they could establish the priority areas of work that the relevant industry decided were of most use.
While no structure is perfect, these institutes have for the most part done a good job. They are particularly useful in industries like agriculture, kiwifruit and forestry, where there are a large number of smallish businesses (farms and orchards) which all share the benefit of the innovations created.
They have effectively been the shared R and D facilities of our land-based industries, and there was no clamour from those industries to restructure them.
No, this is a supply-side merger created for reasons other than customer preference, in the fine tradition of the last Labour Government in creating Te Pukenga and Health New Zealand.
Indeed that’s where the idea started. Unfortunately, while of a different scale, this merger too is likely to be costly and distracting and achieve little.
A more useful announcement perhaps would have been to give each institute an even closer relationship with their industry, perhaps including ownership.
Sadly, this way we are likely to go back to hearing from industries in a few years' time that their research organisation doesn’t listen to them or share their priorities because it has too many masters.
The other announcement was the launching of an advanced technology institute, replacing Callaghan Innovation.
This unfortunately also involves a misreading of the market – in this case, the structure of technology companies.
Rocket Lab wasn't born in a government institution, says Steven Joyce. Photo / Rocket Lab
Technology businesses like Rocket Lab, Xero, Halter, and Power by Proxi are not born in government labs. They do their own research and development because their business model involves them owning their own intellectual property which is their main competitive advantage.
There is zero likelihood they would outsource their R and D to a government research institute.
We have learned this lesson once before as well with an entity called Industrial Research Limited, which could find hardly any clients through its 20 years of operation.
As well as battling the preference of tech companies to own their own tech, it specialised in areas of research it thought would be useful but for which there were too few New Zealand companies as potential customers.
That’s not to say we don’t need more knowledge and research in areas like gene editing, artificial intelligence and quantum computing, areas identified in the government announcement. We particularly need more people skilled in these disciplines.
A logical way to do that would be to set up and fund research institutes within our universities. Universities have a model which successfully combines research and the teaching of bright young things, tested and adopted worldwide for hundreds of years.
A contestable process between the universities would allow us to quickly set up centres of excellence in these areas, equipping young people with the skills to be the next Peter Beck (Rocket Lab), Craig Piggott (Halter), or Fady Mishriki (PowerbyProxi).
It is great to see a focus on science and innovation from the Government. It’s just a pity that the emphasis is more on structure than delivery. To be fair to the Prime Minister, this train would have been set in motion a long time ago.
Sir Peter Gluckman’s views on centralisation and his negativity towards competition in the research sector (which he calls unnecessary duplication) have been known for a very long time.
Those of us who believe a bit more in competitive innovation and the serendipity of invention and entrepreneurship will have to hope the next wave of clever tech companies prosper regardless.
Hopefully Nicola Willis, in her new role as the Government’s economic “sweeper”, will be able to pick up more of these ambiguously purposed initiatives much earlier. If we are going for growth we need a relentless focus on moving forward, not sideways.
