NZ needs innovation policy refresh after Aussie 'ideas boom' package, commentators say

Wednesday 9th December 2015

Australia’s new innovation statement, announced this week, has leap-frogged it ahead of New Zealand, which needs a policy refresh to stay competitive, say kiwi science and innovation commentators.

Australian Prime Minister Malcolm Turnbull announced a series of policies this week that are expected to cost A$1.1 billion over four years to support “the ideas boom” which he said can last longer than the mining boom.

That Turnbull chose to announce innovation policy as his first major initiative shows how seriously the Australian government is now taking it, compared to the previous Abbott government, said Shaun Hendy, a University of Auckland physics professor and director of centre for research excellence, Te Punaha Matatini.

“It signals to us that Australia is back in the game,” he said.

Australia’s measures include a new A$250 million CSIRO research fund to support investments in spin-off and start up companies, A$1.5 billion over 10 years for the National Collaborative Research Infrastructure Scheme, and A$127 million over four years more for university research while simplifying the structure with incentives for industry collaboration and less focus on publishing articles in academic journals. It sets up an independent innovation and science organisation and creates a new digital marketplace for securing government contracts.

Its investment in innovation infrastructure, in particular, is well ahead of New Zealand’s and we’ll need to look at ways of leveraging into Australia’s “so we can benefit from its larger scale," Hendy said.

The innovation statement also seeks more risk-taking with new tax offsets for early stage investments, reducing the default bankruptcy period, and encouraging crowd-funding. It sets up seed funds, five landing pads for start ups in foreign cities, a new entrepreneur's visa, A$84 million towards inspiring Australians into digital literacy and science, technology, engineering and maths subjects, and provides pathways for permanent residence for postgraduate students to encourage more commercialisation of research.

It could affect how competitive New Zealand firms are compared to their trans-Tasman counterparts and there’s a risk of this country losing researchers to Australia where wages are higher and the environment for commercialisation is “significantly better”, said Andy Hamilton, head of business incubator Icehouse.

“We’ve always said Australia could never get its act together on innovation but it now has a government very focused and aggressive on it and it is five times bigger than us,” Hamilton said. “A strong Australia is a good thing but we have to look across our ecosystem and ask 'are we doing the best we can?'”.

Labour’s innovation spokesman David Cunliffe said Australia’s ambitious policy is now light years ahead of New Zealand’s. “It’s likely to accelerate the brain drain of our best and brightest and we need to do a step change to catch up and leapfrog. Australia is now one up on us,” he said.

The Australian policy looks similar to the manifesto put last week before the Ministry of Business, Innovation & Employment (MBIE) by KiwiNet, a consortium of universities and crown research institutes trying to increase commercialisation and collaboration of science and technology-based innovation, said chair Ruth Richardson.

KiwiNet wants New Zealand’s innovation policy to be more disruptive because although we’re doing good things, “it’s still marginal and we need to move it more centre stage,” Richardson said. “Innovation needs to be championed at the top.”

While New Zealand’s annual spend on science and innovation funding in universities and CRIs was comparable to Australia’s at around the $1 billion mark, we’re not spending enough on commercialisation pathways, she said. And Richardson said there need to be clearer incentives for publicly funded researchers, as there is in the new Australian policy, towards commercialisation rather than a culture of focusing on academic publications.

Callaghan Innovation’s research and development grants also came in for criticism, with Hamilton saying too many companies were able to meet the eligibility criteria for growth grants.

“We’re picking winners and losers,” said Cunliffe who wants the policy changed to more targeted funding and a move away from grants alone to a mix of those and the R&D tax breaks Labour introduced and National then axed.

There needs to be a policy refresh that allows for more serious engagement with targeted start ups and sector consolidation strategies for scale, said Tenby Powell, chair of Waikato University’s commercial arm, WaikatoLink. Doing that would mean “we have every ability to lift the current GDP contribution made by small to medium enterprises from 28 percent to 35 percent (around $15 billion)”, he said.

Callaghan Innovation and MBIE declined to comment on the likely impact to New Zealand of the Australian changes.

BusinessDesk.co.nz

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