Our science sector, long considered an essential generator of new ideas that can be turned into innovative, exportable products, is in turmoil. Callaghan Innovation, the government agency tasked with boosting research and development and growing start-ups, is being shut down. Already, 63 redundancies have been announced from a total staff of more than 350. The seven crown research institutes (CRIs) are to be merged into three “public research organisations”, and a fourth created to focus on artificial intelligence, quantum technologies and synthetic biology.
Budget cuts at the CRIs and universities have led to our best boffins seeking greener pastures overseas.
The government’s once-in-a-generation shake-up of the sector is an attempt to fix a broken system that isn’t delivering enough of a return on the $1.2 billion we spend on research every year. Other small countries like Singapore and Denmark outspend us on R&D and are better at translating cutting-edge science and engineering into high-growth businesses.
It’s tempting to think we need to follow their example, choose some areas of research and double down on them, coming up with big, science-based ideas we can patent and commercially exploit.
But in his new book How to Be Wrong: A Crash Course in Startup Success, serial tech entrepreneur Rowan Simpson suggests we are too hung up on fostering innovation and picking winners. Simpson had a hand in some of New Zealand’s most successful start-ups, from Trade Me and Xero, to Timely, Vend and Sonar6. Those companies have all had successful exits, generating billions of dollars of value between them and fuelling a new wave of start-up investment as the founders attempt to repeat their success.
But Xero wasn’t the first software accounting company, and Trade Me certainly wasn’t the first online marketplace. Instead, they took existing concepts and excelled at executing them.
It wasn’t easy for Simpson. Trade Me almost didn’t survive. The Covid pandemic nearly killed Timely. But they got through in the end due to great execution. “Building a successful business is not just about an innovative idea, it’s mostly about execution,” he writes. “An innovative idea is like an algorithm that has been written on a whiteboard but never run on an actual computer. What matters is how well it executes.”
We’ve invested a lot as a nation in biotech and clean tech, areas we should have a natural advantage in, but with relatively little to show for it. We may have understood the science, but we didn’t translate that into useful things to sell to the world.
Ideas ask “can we make it?” says Simpson. Execution asks “should we?”
He suggests the agency named after the late physicist and entrepreneur Sir Paul Callaghan should really have been called Callaghan Execution, with a laser focus on helping businesses get the “thousands of little things right” to thrive. “Ideas appear in the ‘aha!’ moment of inspiration, when the lightbulb goes on. Execution is perspiration – putting our head down and doing the mahi,” Simpson suggests.
When it comes to AI, quantum technologies and gene editing, we don’t have any natural advantages. But we can use AI tools and open-source large language models. Powerful CRISPR gene-editing tools are widely available in the science world. We can rent time on quantum computers overseas. We can come up with ideas, but we need to get 100% better at executing them if we are going to transform science into an economic growth engine.
How do you execute well? It’s multifaceted, but Simpson suggests it largely comes down to people. We need to get the right skills mix in teams starting up and running companies. Retaining and growing talent is everything. That’s an idea worth executing.
How To Be Wrong: a Crash Course in Startup Success, by Rowan Simpson (howtobewrongbook.com), is out now.
