NZ govt science plan seeks to double private sector R&D by 2025

Monday 5th October 2015

The government is ready to spend more on direct research grants to businesses to meet an "aspirational" target of doubling private sector research and development spending over the next 10 years, despite feedback from the business community that it would rather get tax breaks.

The 10-year national science plan was launched at the Royal Society of New Zealand in Wellington by Science and Innovation Minister Steven Joyce, who committed to raise government spending on R&D to 0.8 percent of gross domestic product from 0.65 percent at present.

Private sector R&D, at 0.5 to 0.6 percent of GDP was "particularly low', compared to other small, advanced economies.

"The government's aspirational goal to raise it to 1 percent of GDP by 2025 is critical to boost New Zealand's productivity and through that, improve well-being," the document says.

The government will increase funding for business growth grants, administered by Callaghan Innovation, which is tasked to accelerate growth in high-value manufacturing and services, and is considering a boost for pure scientific research through the Marsden Fund.

MBIE's bridge funding between pure and commercial science will also be merged as a single fund by bundling together the six existing sector-specific funds as a single portfolio.

"We expect a single fund to provide greater predictability of opportunity: scientists will be able to bid every year, and will not have to wait until money becomes available from expiring contracts in their particular field," the paper said.

In submissions on the draft statement, funding agency Callaghan attracted largely negative submissions on the way it administers funds, with concerns over the lack of links between the Crown entity and industry. Submitters also tended to see the lack of business incentives for R&D as a negative, with economic levers or incentives, such as tax breaks, seen as the best way to encourage industry co-investment.

Evaluation of the impact of R&D spending will accompany commitments to increased resources.

"Those commitments are real, but with that increased investment comes a need for greater accountability," Joyce said. "Regular comprehensive sector-wide evaluation of how different parts of our science system are succeeding will help us move beyond our own, by necessity, subjective views of what should be funded next, to dare I say it, a more science-based approach to funding our science system."

Seeking improvements in international collaboration, the government will reorganise MBIE's international funds into four funding streams following a review recommending clearer objectives, a simpler structure, better reporting, and capturing longer-term outcomes.

The government aims to manage risk in its portfolio better, with a clearer role as an investor, because too much R&D funding is currently focused on "low-risk projects with more certain short-term impacts," the paper said. The Crown will continue to take a lead role in investigator-led research, which typically has an unclear direction at the outset, and will consider increasing funding to the Marsden Fund if fiscal conditions allow.

"The most significant market failure occurs in investigator-led discovery research," the document said. "Given government's role as the primary investor in investigator-led research, this points to focusing a greater proportion of additional investment at the discovery end over time."

Other initiatives will see the introduction of regional research institutes, and funding reviews for Crown Research Institutes and the Health Research Council.

Some $1 million has been earmarked for MBIE to attract investment from multi-national companies.

BusinessDesk.co.nz

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