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New Zealand Science Review
Vol 68 (1) 2011
Official Journal of the New Zealand Association of Scientists
One-day Conference, 21 October 2010
Re-setting science and innovation for the next 20 years
New Zealand Association of Scientists in association with the
Institute of Policy Studies, VUW
New Zealand Science Review
Vol 68 (1) 2011
Official Journal of the New Zealand Association of Scientists
P O Box 1874, Wellington
www.nzas.rsnz.org
A forum for the exchange of views on science and science policy.
Editor: Allen Petrey
Production Editor: Geoff Gregory
Contents
ISSN 0028-8667
Editorial........................................................................................................................................................1
NZAS and Institute of Policy Studies, Victoria University of Wellington
One-Day Conference, Wellington, 21 October 2010
Re-setting science and innovation for the next 20 years
Welcome and introduction – James Renwick...........................................................................................	4
Setting the scene
Opening Address – Wayne Mapp..................................................................................................................5
Role of innovation in economic growth in a New Zealand context – Struan Little.........................................8
Science, innovation and business – G.A. Carnaby.....................................................................................12
Tertiary education for science and innovation
The role of polytechnics in the innovation system – Linda Sissons............................................................15
Role of universities in innovation (Abstract) – Rod Dunbar.........................................................................18
Enabling innovation – J.S. Rowarth and A.J. Parsons................................................................................19
Science annd innovation for sustainability
New Zealand, new futures, new ways of science engaging with society? – Bob Frame, Alison Collins,
	 and Richard Gordon..........................................................................................................................24
New Zealand’s productivity paradox
Innovators, innovation and increasing returns to scale: Solving New Zealand’s productivity paradox –
	 Shaun C. Hendy and Catriona M. Sissons........................................................................................28
Specific experiences of science and innovation in New Zealand
The challenges and opportunities of commercialisation – Sophie Howard................................................33
Environmental prediction and innovation – Michael J. Uddstrom................................................................37
Building a magnetic resonance company in New Zealand (Abstract) – Andrew Coy.................................42
R&D in a small technology-focused business – Dan McElrea....................................................................42
Mäori perspectives on the science and innovation system – Garth Harmsworth.......................................45
Research beyond the direct focus of economic growth
The wider roles of science and innovation – P.D. Gluckman.......................................................................49
Drawing it together – Murray Bain and Colin James................................................................................52
Book review
Gillian Turner: North Pole South Pole – Allen Petrey..................................................................................55
New Zealand Science Review provides a forum for the discussion of science policy. It covers science and technology in their broadest
sense and their impacts on society and the environment, both favourable and adverse. It also covers science education, science plan-
ning, and freedom of information. It is aimed at all scientists and decision makers, and the interested public. Readability and absence of
jargon are essential.
Manuscripts on the above topics are welcome and should be sent to: The Editor, NZ Association of Scientists, PO Box 1874,
Wellington, or e-mailed to allen.petrey@xtra.co.nz
Cover photo: The Nokia inventor network (in Uusimaa, Finland) constructed using European Patent Office patents at the end
of 2006. The network, which began to grow in 1993, contained 1356 inventors by that time. See pages 29–30.
New Zealand Science Review Vol 68 (1) 2011 
Editorial
This issue of New Zeland Science Review contains the papers
presented at the 21 October 2010 conference, Re-setting science
and innovation for the next 20 years. When planning the confer-
ence we were motivated by perceptions that government mes-
sages about the nature of innovation and its role in the economy
lack coherence (OECD 2007). We also felt that there has been
insufficient explanation of why emphasis on innovation as a
driver of economic growth justifies the apparent policy neglect
of environmental, health and social sciences.
We decided to read around the subject of ‘innovation’ and
the ‘innovation system’and on the role of science and research
in order to get a feel for where the debate sits in different parts
of the world and the relationship to different policy settings in
these countries.As scientists, we are immediately struck by the
often ambiguous evidence on cause and effect in the innovation
literature. In much of the social sciences it is almost impossible
to run experiments to test theories so we must rely on hindsight
and inference since we are dealing with human behaviour,
complicated interactions, and sets of circumstances that differ
from country to country.
To put the role of research, science, and technology into
perspective we have as background a very useful framework
for thinking about the New Zealand productivity problem. Rick
Boven and co-authors (Boven et al. 2010) take a ‘diagnostic
approach’ to analysing the five drivers of labour productivity
(entrepreneurship, innovation, skills and talent, investment,
and natural resources (Kidd 2008)). Key points that arise from
their analysis, relevant to improving New Zealand’s labour
productivity are:
•	 there are no silver bullets;
•	 the level of entrepreneurial activity and training for inter-
national business success should be a core concern;
•	 more needs to be done to convert inventiveness into pro-
ductivity gains;
•	 there is much detailed work needed to improve school
completion rates, school-to-work transition, and further
improved literacy and numeracy skills and financial
knowledge;
•	 we need to increase domestic savings and improve capital
formation; and
•	 the use of natural resources should be carefully analysed to
ensure opportunities are in New Zealand’s interests.
The above analysis shows that economic improvement is
likely to come from advances in a number of sectors among
which research, science, and technology are but a part.
The conference
A key aim of the conference was to give participants an oppor-
tunity to appreciate how far current thinking about ‘innovation’
and the ‘innovation system’has developed in New Zealand. We
also wanted to identify what might be entailed if New Zealand
really wants to raise its labour productivity and improve the role
of scientific research in this. This is why we invited not only
government representatives, but a range of other individuals
who might have relevant perspectives. We chose representatives
from the education system and those who have points of view
about the characteristics of a system that values its knowledge
people and how they might interact together to make a vibrant
knowledge economy. We also invited a few speakers who are
at the coal face, trying to turn knowledge into businesses. We
also wanted to allude to global resource limitation or as one
conference attendee put it ‘the elephant in the room’ and what
this might mean for innovation policy.
The conference gave an opportunity to evaluate the co-
herence of government plans. The Hon Dr Wayne Mapp,
Minister for Research, Science and Technology, reconfirmed
the Government’s vision of science and innovation as being at
the heart of the economy (p. 5). He laid out the Government’s
economic growth agenda and current areas for action and
alluded to Denmark, Finland, Singapore and Queensland as
inspirational models. He stressed that we must build a ‘third
pillar’ that focuses on high-tech manufacturing and services.
Struan Little, a Deputy Secretary at the New Zealand Treasury,
reinforced the Minister’s vision of innovation as being central
to economic performance and growth (p. 8). He developed the
theme that we need to understand how innovations arise, noting
that technology diffusion and adoption is a weakness for New
Zealand. He presents evidence that New Zealand’s research
institutions are only a small part of the sources of innovation
that businesses use, and stressed this is where gains could be
made.Although the first two speakers focused almost entirely on
innovation for economic growth, Professor Sir Peter Gluckman
emphasised how important it is that we recognise that a science
and innovation ecosystem reflects the intimate links between
economic prosperity, social development, and environmental
protection (p. 49). The quality of our future as human beings
living on a rapidly degrading planet will depend on how well
we develop new knowledge and use science and technology. He
noted that those countries that have increased their investment in
both the science and innovation in the last thirty years are now
much more productive than New Zealand. These scene-setting
presentations acknowledged that, at the moment, the Govern-
ment is grappling with the impacts of the global economic
downturn. So, with this as the context, we received just a hint
that there might be further moves afoot in next year’s budget.
We presume that the Government will have noted that some of
our comparator countries have increased public sector RD
expenditure to 0.8% of GDP (compared with the 0.5% that
New Zealand spends) and have produced rates of productivity
growth far greater than ours.
To explore elements that might be hindering technology
diffusion and adoption in New Zealand the conference dipped
briefly into subjects related to personnel management, occupa-
tional cultures and what might hinder interconnectedness.
Dr Garth Carnaby, President of the Royal Society, contrasted
the cultures of scientific research and technological develop-
ment and analysed some of the attitudes that might impede
technology transfer (p. 12). A failure to fully understand and
value both of these cultures in New Zealand will lead to a
sub-optimal innovation system. Professor Jacqueline Rowarth
considers important workplace and cultural characteristics that
are necessary for high productivity in ‘knowledge workers’ by
reviewing the literature and seeking parallels to the New Zealand
situation (p. 19). There are many insights in this paper that will
be useful in the reorganisation of the New Zealand science and
innovation system.
Interconnectedness is a very important characteristic of a
successful national innovation system if technology diffusion
is to occur. Professor Shaun Hendy of Industrial Research Ltd
New Zealand Science Review Vol 68 (1) 2011
and the MacDiarmid Institute,Victoria University ofWellington,
used evidence of interconnectedness (using patents as a proxy)
to reflect on New Zealand’s productivity paradox (p. 28). He
presented evidence to show that, in order for New Zealand to
diversify its economy; New Zealand should probably take its
economic geography into account and be concerned to build a
number of networks of highly connected people. The Centres of
Research Excellence were given as good examples of how this
model may be developed. In other words, New Zealand must
begin to behave like a city of 4 million people.
To broaden out the context in which we consider ‘innovation’
Dr Bob Frame and co-authors, of Landcare Research, scoped
issues and opportunities for innovation (in the sense of new
thinking) on subjects such as sustainable use of natural resources
or reducing the use of damaging materials and processes while
keeping economic prosperity on the agenda (p. 24). There is
considerable scope for science to adopt new ways of engaging
with its peers, policy and business communities as well as with
public stakeholders.
At the organisational and institutional level, technology
diffusion occurs in a number ways and may have a number of
characteristics. New Zealand universities are supporting the
government’s priority to generate more high technology indus-
tries through their commercial arms. Sophie Howard of VicLink
reflected on her role at the interface between the university cul-
ture and the external business world (p. 33). Commercialisation
offices have a particular problem in finding enough people with
the right skills and are now concentrating on training and devel-
opment of commercialisation managers. She also highlighted the
conflicting incentives that university staff have as they balance
their teaching, publishing, and outreach activities. This paper
supports the notion that the university has a wide role to play
in addition to scientific research in improving human capital
relating to improving New Zealand’s productivity. She also
hints at the effectiveness of ‘modelling by doing’ in fostering
on-the-job training of commercialisation managers.
Magritek, New Zealand’s Magnetic Resonance Imaging
(MRI) Company was started in 2004 as a spin-out from Victoria
and Massey Universities. DrAndrew Coy, CEO of the company,
stressed that the intellectual property and research underpinning
Magritek products comes from two decades of world-leading
Magnetic Resonance research carried out by Prof Sir Paul Cal-
laghan and his team (abstract, p. 42).
Dan McElrea, chief executive officer of Puku Ltd, presented
the characteristics and innovative ideas, but not necessarily
new ideas, of a small specialist fastener company which has
invested heavily in intellectual property (IP) with a particular
emphasis on helically based connections (p. 42). Their strategy
is focused on developing and licensing promising ideas. Puku
Ltd benefited from TechNZ grants, a NZ Trade and Enterprise
travel grant (now discontinued), and networking opportunities
from the TechNZ Innovation Forum.
An example of creative people working together using a
pathway from scientific innovation to end-users who adopt
the ‘new ideas’, was presented by Dr Michael Uddstrom of
the National Institute of Water and Atmospheric Research (p.
37). He shows how prediction of weather-related hazards is
translated into a form readily assimilated by enterprises, which
have weather derived risk that contributes to efficiencies in their
operations. He notes that an innovation system is only as good
as the quality and quantity of research and technology that un-
derpins it and that funding alone is not enough. Investors must
be willing to sustain effort over a long period especially if the
innovation is likely to be disruptive to existing technologies or
capabilities.
Dr Linda Sissons, chief executive of Wellington Institute of
Technology, led us through the strong role that the Institutes of
Technology and Polytechnics, especially the Metro group, are
carving out for themselves in education, research and technol-
ogy (p. 15). This involves a close connectedness with large and
small companies and an emphasis on training and technology
transfer.
Associate Professor Rod Dunbar, University of Auckland,
similarly emphasised the role of universities in New Zealand
(abstract, p. 18). These universities play an important training
role and are a source of future technology and technology-savvy
business managers able to operate at the level needed for large,
sophisticated export industries.They also produce well-educated
innovators and individuals who know about a range of markets,
speak other languages, and understand the culture of the markets
into which we aspire to export. It is important to protect diversity
in the academic community and to accept that an innovative
country is built on more than scientists and engineers.
The low participation of Mäori in the science and technical
areas and resulting lost opportunities was highlighted by Garth
Harmsworth (p. 45). New Zealand is largely missing out on the
cultural diversity and the differing world view that Mäori bring
to the New Zealand economy.
Member of Parliament David Shearer (talk not published
here) reflected on some of the exciting new companies he
has visited recently that epitomise some really good ideas
approached using offshore partnering. He believes that added-
value enterprises, especially clean, green, clever, low-carbon,
weightless, export-driven companies, will be the future where
Government environmental and economic policies are driven
together.
Finally, Murray Bain, the newly appointed chief executive
of the Ministy of Science and Innovation summed up by defin-
ing ‘innovation’as converting knowledge and competence into
value, a definition that is inclusive of environmental, social
and health research. He drew on themes coming for the pres-
entations to make several points (p. 52). Both innovation and
science are processes – journeys that need to work seamlessly
well together right across the chain. There is a need for balance,
whether the balance relates to primary industries versus high-
tech or applied versus not-yet-applied research. There is room
and a need in the innovation chain for a range of ‘excellent’,
differently-skilled people.
Political journalist and analyst Colin James summed up by
reflecting on the complexities around the subject of government
support for science (p. 53). We have to acknowledge science’s
potential for good and evil. Scientists need to be advocates for
excellent science that is applied for human wellbeing. He was
critical of the Treasury’s narrow approach to the subject of
innovation in the economy. He concluded that New Zealand
is going to have to make the same kind of investment as its
comparator countries, foster ways of increasing the amount of
interconnectedness among all players in the economy, and not
New Zealand Science Review Vol 68 (1) 2011 
lose sight of the fact that climate change impacts will create a lot
of uncertainty around any attempt we make to ‘pick winners’.
Reflections on outcomes
It was inevitable that discussion threads and observations did
not always link coherently. The main point we can distil from
the conference is that different players use the word ‘innovation’
with different shade of meaning. For some presenters, ‘innova-
tion’means thinking creatively to employ existing technologies,
e.g. to improve products or services. Others use the word to
mean ‘invention’that creates new possibilities, ideas, products
and services and which may overtake existing technology. For
‘innovation’ to be a useful word that contributes to clear com-
munication it must be defined whenever it is used.
We did not locate a presenter who could make an innovation
system-wide analysis. Such a presentation would have been very
useful in that it would have:
•	 detailed what is meant by ‘innovation’ and ‘innovation
system’,
•	 defined the elements of a New Zealand innovation system,
•	 analysed the strengths, weaknesses and relative alignment
of each part of New Zealand’s innovation system, especially
the education system, and
•	 in the research sector, would have evaluated the relative
value the Government places on all parts of the innovation
system (not only those parts that are directly related to the
economy) and defined how they will be thought about.
The Organisation of Economic Co-operation and Develop-
ment (OECD 2007) report on New Zealand’s innovation system
contains an uneven evaluation of parts of the system. We note
that the OECD sees innovation purely in economic terms and
has no framework for evaluating outcomes in environmental,
health, or social sciences other than as means of commercial
exploitation of resources. Despite mentioning shortcomings
in educational achievement and a mismatch between fields of
higher educational attainment and demand for labour, the section
on the Ministry of Education dealt only with the tertiary sector,
did not appear to contain much evaluative material, and drew
few conclusions relating to education in the overall assessment.
Yet, the Building and Construction Sector Productivity Task-
force(Anon. 2009) identified leadership and training problems
at all levels in the construction industry that are impacting the
efficient use of labour.
Despite the increased attention being given to entrepre-
neurial activity, and training for international business success
(OECD 2007, Boven et al. 2010), there is mounting evidence
that improvements in these activities might not have the desired
result if effectiveness in the education sector as a whole is not
also addressed.
There is an obvious role for the new Ministry for Science
and Innovation to create a framework for communicating the
value and the level of investment that should go into all parts
of the research, science, and technology investment, especially
those that are truly public good in nature, i.e. related to sustain-
able use of natural resources and social wellbeing. There have
been several shifts in definition of ‘public good’ over the last
15 years, most of them not very transparent. The New Zealand
Association of Scientists judges this type of communication to
be a very important part of the overall ‘innovation system’, in
that it transmits knowledge to the potential workforce about the
principles by which Governments make their decisions.Armed
with information on how resources are to be assigned, students
can make good decisions and align their choices with what is
deemed to be needed from the education system and for the
economy and society.
Clearly, scientific research is only a part of the whole ca-
pacity of any society to ‘innovate’ in the broadest sense of the
word. We need to compensate, through education and training
at all levels, for our cultural weaknesses that handicap our abil-
ity to convert inventiveness into productivity and sustainability
gains. We need to increase savings, improve capital formation,
and devise ways of coordinating strategies across the whole
innovation system to achieve the Government’s national goals.
We look forward to engaging with the staff of the new Ministry
of Science and Innovation in defining their role and how it
might relate to the larger national innovation system. We also
look forward to engaging with policy analysts in all parts of the
science and research system to help to identify any unintended
consequences of policy interventions.
Janet Bradford-Grieve and Allen Petrey
for NZAS Council
References
Anon. 2009. Report of the Building and Construction Sector
Productivity Taskforce. Department of Building and Housing. 36 p.
http://www.dbh.govt.nz/UserFiles/File/Building/sector-forum/
Sector-Productivity-Taskforce-Report.pdf
Boven, R.; Bidois, D.; Harland, C. 2010. A goal is not a strategy:
Focussing efforts to improve New Zealand’s prosperity. New
Zealand Institute, Discussion paper 2010/1, 62 p. http://www.
nzinstitute.org/Images/uploads/A_goal_is_not_a_strategy_-
_Full_report.pdf
Kidd, N. 2008. Putting productivity first. New Zealand Treasury
ProductivityPaper08/01.http://www.treasury.govt.nz/publications/
research-policy/tprp/08-01/tprp08-01.pdf
OECD 2007. OECD Reviews of Innovation Policy, New Zealand.
OECD, Paris. 240 p. http://browse.oecdbookshop.org/oecd/pdfs/
browseit/9207071E.pdf
New Zealand Science Review Vol 68 (1) 2011
The Hon Dr Wayne Mapp, other members of the House, Profes-
sor Sir Peter Gluckman, distinguished speakers and conference
attendees. Welcome to this joint New Zealand Association
of Scientists and Institute of Policy Studies conference. The
conference marks the re-setting of government funding for
research, science and technology under the banner of ‘science
and innovation’with a merging of Ministry of Research, Science
and Technology and the Foundation for Research, Science and
Technology into a new Ministry.
The conference aims to tease out what we mean by ‘science
and innovation’, illuminate and analyse the basis of current
government policy and the changes taking place, New Zealand
innovation practice and the role that various institutions play in
New Zealand’s ‘innovation ecosystem’, and ideas for potential
future developments.
With the constraint of a one-day programme, some important
parts of the innovation system are not being presented but may
emerge in discussion. There is little direct researcher input on
the obvious role of basic research in innovation. Instead we have
tried to focus on policy and practical implementation issues
and perspectives. Despite our best efforts, a representative of
the New Zealand Business or the Manufacturers and Exporters
Association was not available.
A widely recognised concern is the low level of business
involvement in the ‘innovation system.’NZAS had campaigned
for 20 years to get recognition of the need for a business RD
tax system to match Australia’s. Of little direct benefit to sci-
entists, the primary reason for our support was to get potential
growth businesses interested in, and enabled to find, the in-
novation solutions that suited them. We are saddened that this
has come and gone and been replaced by what seems to be a
more bureaucratic grant system with a narrow economic focus
and resources that have been redirected from some important
areas of science. We hope to find out that that this is too black
an interpretation of the current situation.
Thanks to an interested and involved government, there
is much debate in the news media and in specialist reports on
what might be wrong with the New Zealand economy because
labour productivity stubbornly fails to improve. In addition to
issues in the New Zealand innovation system and a need for
improved rigour in the strategic development process, the low
degree of capital intensity and low business spend on RD in
New Zealand are seen as major areas requiring improvement.
The fundamental importance of New Zealand’s intangible
capital, its people, the quality of institutions in society and es-
pecially our educational system, are key issues. Of particular
importance is the development of practical skills and the crea-
tion, application and management of new technology in a vastly
upskilled private sector.
We would also like to sound a note of caution about the
direct relevance of overseas innovation models. A paper by
Alan Hughes (2007), University of Cambridge, suggests that a
narrow interpretation of US economic performance, often used
in innovation policy, is doomed to fail. This paper concludes
that ‘…the crafting of innovation policy in the context of any
specific national innovation system requires a careful considera-
tion of the structural features of that context and the particular
opportunities and challenges facing policy practitioners in it.
An imperfect interpretation of the experience of one country’s
system is unlikely to be an appropriate guide to innovation
system failure or success elsewhere.’
Overall, there does not appear to be a single clear view,
underpinned by New Zealand evidence, that is a reliable guide
to improving New Zealand’s policy framework for encouraging
better performance from the ‘science and innovation ecosystem’.
In fact, the Association contends that the science and research
sector will be placed at risk if too narrow a focus is placed on
foreseeable economic benefit as the major requirement from
research scientists in the innovation system.
In this conference we hope to throw more light on the sci-
ence and innovation part of this subject, identify some of the key
issues and problems with existing arrangements and consider
how the ‘innovation system’ might be improved.
We also hope that the results of the conference will serve
as a sort of ‘briefing’ on key issues for the new Ministry of
Science and Innovation.
I’ll now, with great pleasure, hand over to Professor Jonathan
Boston, Director of the Institute of Policy Studies our chair for
today’s proceedings.
Reference
Hughes, A. 2007. Innovation policy as cargo cult: Myth and reality
in knowledge-led productivity growth. ITEC Working Paper
Series 07-26. [CBR (University of Cambridge) – ITEC (Doshisha
University) Joint Papers]
Re-setting science and innovation for the next 20 years
Welcome and introduction
James Renwick
President, New Zealand Association of Scientists
New Zealand Science Review Vol 68 (1) 2011 
I have been asked to talk about the Government’s vision for
science and innovation over the next 20 years.
Our vision is a simple one. It is that science and innova-
tion is at the heart of our economy. They will be the means by
which we grow and develop the economic and social future of
New Zealand.
As a small country, we are not big enough to dominate
markets. Nor are we big enough to generate growth through
our internal economy. We cannot build a competitive edge
through low wages or degrading our environment. We have
to be smart.
Symbolic of our priorities is the new Ministry of Science
and Innovation. You may ask, ‘What’s in a name? Why is that
important?’
It is important because it signals a new era and a new at-
titude. Science is not just for very clever people conducting
advanced experiments at the frontiers of science. Of course this
is important.All great discoveries ultimately come from frontier
research. However, science also has to connect to the economy,
not just for the future but also in the present.
Science is the wellspring of innovation. It is the effective
application of that science which will generate the exports and
jobs that we want. The conjunction of science and innovation
is central to our strategy. 
We are not the only country to have identified this. The
Deloitte 2010 report on global manufacturing competitiveness
ranks ‘talent-driven innovation’ as by far the most significant
factor in global competitiveness.
Other countries have gone further. The transformation over
the last three decades of the economies of countries like Finland,
Denmark, and Singapore has been down to a long-term strategy
of ongoing investment into science and innovation. These coun-
tries have built multiple streams to their economies.
Closer to home we have had the example of Queensland.
Queensland is not just the Sunshine State. Over the last 12
years, they have undergone a major transformation of their
regional economy. The results are compelling. In the 1990s,
the per capita income of Queensland was very similar to that
of New Zealand – they were slightly ahead. Now, they are over
30% ahead.
Why is this? It is not just because they have minerals
– Queensland has always had minerals. In fact, the difference
can be summed up in two words – Smart State. This has been
a comprehensive and broad strategy over time to diversify
Queensland’s economy from ‘rocks and crops’(and tourists) to
a far broader economy encompassing research activities and a
whole range of local and international high-tech industries.
New Zealand’s National-led Government has embarked on
its own broad-reaching strategy to improve the economy. Com-
plicating this effort is the biggest global financial crisis since
the Great Depression, and the consequent strain on government
and business finances around the world.
Science and innovation are not the only focus. They are
part of a larger strategy that the Government has implemented
to drive New Zealand forward.
We have made huge progress in terms of more efficient
government. The last decade saw taxpayers’money squandered
at a time when we should have been building for the future.
Government spending increased by $22 billion in just eight
years. It is hard to see what we got for it.
Our highest priority as the incoming Government was to
stem a deficit that threatened to blow out of control. It was not
easy, but we have achieved this. We are prioritising government
spending on what really matters.
Regulatory reform has also got under way, from stream-
lining the Resource Management Act through to holding re-
gional and local bureaucracies to account. We have also rolled
out an infrastructure programme across a whole host of areas
from broadband to roads to public transport.
Tax reform was a focus for this year. Not only has it made
a substantial difference to people’s pockets, it also signals our
clear intention that savings and investment should be rewarded
over consumption. 
All these initiatives are important. Taken together, they
signal a marked shift in the direction that we are taking New
Zealand.
Re-setting science and innovation for the next 20 years
Opening Address
Wayne Mapp*
Parliamentary Buildings, Wellington
Hon Dr Wayne Mapp is Minister of Science, Research and Technology and Associate Minister of both
Economic Development and Tertiary Education. He is also Minister of Defence. He was first elected
to Parliament in 1996.
He holds a LLB (Hons) from Auckland University, a LLM from the University of Toronto, and a PhD in
international law from the University of Cambridge.
Dr Mapp’s career has involved both private legal practice and as Associate Professor of Commercial
Law (international trade law, taxation  constitutional issues) at Auckland University, 1994–96.
* Correspondence: w.mapp@ministers.govt.nz
New Zealand Science Review Vol 68 (1) 2011
Science and innovation initiatives
We have placed science front and centre. We have backed this by
actions. In Budget 2009, we increased funding for fundamental
science at a time when just about no other funding increases
occurred. We initiated the CRI reforms, simplified the system,
established overall science priorities, and introduced the Prime
Minister’s Science Prizes.
We appointed Sir Peter Gluckman, who you will hear from
later, as the Prime Minister’s Chief Science Advisor.
Sir Peter has been an inspiration. He has challenged us and
stretched us. He has been a hugely effective conduit between
science, government, and the public.
In 2010 we went even further. Science and innovation re-
ceived another round of major new funding – one of the few
areas that did.
The emphasis in 2010 was support for business innovation.
This included the new Technology Development Grant, aimed
at research-intensive firms. The first of these grants will be
announced soon.
Yesterday, I announced the initial group of research and
development institutions that businesses will be able to engage
with the new Technology Transfer Vouchers. This is aimed at
smaller businesses that do not have their own research and
development capacity. They will be able to work with our
scientists and engineers to get the solutions they need to grow
their businesses.
When you consider the overall economic and fiscal situation,
it shows just how much importance we have placed on science
and innovation.
Already, we are seeing results. Scientists and professionals
have been enthused by the changes. The CRIs are being let off
the leash to concentrate on their science and how it benefits the
country, rather than the short-term focus on funding rounds and
annual statements.
In business, we have signalled that we want innovation-
fuelled progress. We are not just supporting ideas, we are sup-
porting solutions. This support is carefully targeted towards
market-driven growth.
The media have responded to the new mood. Every day, there
are articles about new inventions and successful innovations.
The young scientist who earlier this year won the inaugural
Prime Minister’s Prize for Young Scientists is now fronting a
TV show.
Overall, there is a sense of excitement and enthusiasm.
Yet we know we cannot rest on our laurels. In a highly
competitive world, others are catching up fast.
One of our standout economic performers has been the dairy
industry. This has harnessed science in all areas of animal and
plant breeding, productivity enhancements, processing innova-
tion and product development. There is also a major science
effort around environmental management.
However, we are already at a point of declining efficiency
gains. Over the last decade, our milk production efficiency has
scarcely moved. Our major competitors have closed the gap.
This does not mean that the dairy industry is facing decline.
Far from it. The emphasis is already moving from production
efficiencies to higher-value products. It does illustrate that we
need to not only capitalise on existing sectors, but build new
ones.
So where should our next focus be?
I believe there are three main areas we should concentrate
on. These are: improving our business innovation, strengthening
the relationship between science and economic opportunity, and
growing our science capability.
Business innovation
Research and experience shows that there is a ‘tipping point’
for businesses, where they start to see major benefits from the
RD investment. For many of our high-tech businesses, this
is already occurring.
The proof of this is in the Technology Investment Network
annual report, the TIN 100, which looks at our top high-tech
companies. This notes that those companies that had established
a good global position continued to grow strongly.An example
is Fisher  Paykel Healthcare, which increased revenue by over
20% last year. Overall, the TIN 100 companies invest over 5%
of gross revenue into RD.
Even more significant is the next group of companies, ranked
from 100 to 200 in the TIN 100 list. Their average RD invest-
ment is around 20%. These are not just start-ups. The majority
of these are established companies that have crossed the ‘valley
of death’ and are positioned for serious growth. 
Our current business-facing schemes are deliberately tar-
geted at encouraging co-investment. We will see companies
like those in the TIN 100 grow even more strongly as the global
economy recovers. Their RD investment will keep them at
the forefront.
We will keep supporting commercial innovation, and ex-
pand our business-facing schemes. We expect that demand
will outstrip supply for vouchers, for project grants, and for the
Technology Development Grants. 
The next step in the commercialisation drive will be around
clusters and centres of excellence. Too often, we end up with
a maze of small and unco-ordinated efforts. Current initiatives
such as the Food Innovation Network and the titanium industry
cluster are a template for increased efforts and support.
Strengthening the relationship between
science and business opportunity
New Zealand produces a lot more ideas than we currently have
businesses for. Ideas on their own are worth nothing. As we
build our innovation ecosystem, the pressure to commercialise
intellectual property will grow more acute.
This process is already under way. We will shortly be
releasing the request for proposal for the new commercial-
isation centres. These will build on commercialisation activity
already being undertaken by universities and Crown research
institutes (CRIs). The intention is to allow New Zealand com-
panies far greater access to the range of scientific knowledge
and capability.
We also need to look beyond New Zealand.
Take a company like Lanzatech, inAuckland. Their innova-
tion is in custom microbes that clean the waste gas streams of
large industrial processes, such as steel mills. The market for this
innovation in New Zealand is just about non-existent. They need
New Zealand Science Review Vol 68 (1) 2011 
to work with global steel producers. In fact, they have recently
signed a deal with a major Chinese steel company that will let
them take their process to the next level.
This is an example of harnessing our science in the global
marketplace. We want the world to look on New Zealand as
both 100% Pure and 100% Innovative.
Growing our science capability
It goes without saying that if we are prioritising innovation
through science, then we need plenty of scientists to feed the
innovation pipeline.
Without a constant flow of energised and excited people
we will not build the diverse economy we need. Attracting,
empowering, and retaining talent must be the foundation on
which our innovation future is built.
This means investing more in our young scientists. As I go
around the country, I note that more and more young scientists
are seeing the future not only in terms of their specific research
focus, but also in ways that they can apply their talents outside
the laboratory.
The future will see a far higher number of scientists sharing
their career development across the public and private sectors.
They may start in a university, then migrate out into business
before coming back into an institution to either return to focus
again on more pure research, or teach and inspire others.
Much of our science expertise is in the CRIs. We have there-
fore empowered CRIs to take a far greater role in determining
their major science priorities and managing their resources in
consultation with their stakeholders.
In return, they need to demonstrate to their shareholders and
stakeholders just what they are doing for New Zealand, why it
is important, and how they are getting results that matter.
The universities obviously play a vital role. The Centres
of Research Excellence have been very successful. The Per-
formance Based Research Fund, the Marsden Fund, and the
Health Research Council are integral to supporting science-led
discovery.
We also need to develop and expand the role of institutes
of technology and polytechnics and other leading vocational
institutions on the development side of the RD equation.
The Rutherford Scholarships were introduced to help ad-
dress the early/mid-career gap that many scientists face. They
are part of the more targeted support approach that will ensure
that we keep our talented people encouraged and engaged at
critical times in their careers.
Transforming our economy
The three objectives mentioned above have a purpose.
Over the next 20 years we want to see our economy trans-
formed. I know you have heard this rhetoric before from vari-
ous politicians, business leaders and committees over the last
25 years. And there is no doubt our country has made major
changes.
We opened up the economy, we became more competitive
and market-focused. We have built new skills. We did have fur-
ther to come than our competitor nations. They did not require
Reserve Bank approval to subscribe to an overseas magazine;
they did not have strict import licensing resulting in televisions
being assembled at three times the world price; and they did not
have compulsory unionism. 
These things are now all in the past. However, our competi-
tors did make changes in the last 15 years which we failed to
do. They built their advanced high-tech sectors.
For example, in 1990 Denmark exported about the same
value of agricultural products as it did high- and medium-
technology manufactured products. By 2009, their agricultural
exports had increased in value by 100%. In contrast, their ex-
ports of high- and medium-value manufacturing had increased
by nearly 400%. Their economy had fundamentally changed. 
Countries like Denmark, Finland, Singapore, and Queens-
land have built world-class science and innovation systems in
the last 15 years. We have not done so.
 New Zealand will always have a strong agricultural sector
and we will always be attractive to tourists. We need to add to
it, just as Queensland has added to ‘rocks and crops’.
The investment in science and innovation will enable New
Zealand to build a ‘third pillar’. It will take the TIN 100 group
of companies with their focus on high-tech manufacturing and
service from their current $5 billion in exports, to double that.
Currently, our wider high-tech manufacturing sector con-
tributes about 10% of New Zealand’s export revenue. We need
to lift that to 25% over the next 20 years.
That would really be an economic transformation. It offers
our best chance to move on the OECD ladder.
That is our also best chance of ensuring that more of our
brightest and most talented stay in our country. They will not
just see it as a way station, a place to be educated, to leave, and
to visit from time to time to see relatives and enjoy the beach.
Conclusion
The brief you gave me was around the Government’s vision for
science and innovation.
Today I have given you some of my ideas as to how I see
that vision developing.
The Government has many competing demands on its
limited resources.
Yet in spite of this, the Government has delivered on its
science and innovation programme. The response to that has
been very positive. It augurs well for the future.
Right now is an incredibly exciting time for science and
innovation in New Zealand. The next few years will more than
fulfil the anticipation and expectation that we all share.
New Zealand Science Review Vol 68 (1) 2011
I’m going to be talking, essentially, about two things: first that
innovation is profoundly important for New Zealand’s economic
performance and growth and, secondly, that to gain greater
economic dividends from science, research and innovation,
we need to get much more fusion and synergy between our
scientists and firms.
I want to set the scene by first talking about New Zealand’s
relative economic performance since the 1970s (Figure 1).
In 2009, New Zealand’s gross domestic product per person
stood around 15% below the average for the relatively rich,
developed societies in the Organisation for Economic Co-opera-
tion and Development (OECD), which put us in 22nd
place in
the then-30-member OECD: that’s a significant relative decline
from being around 15% above the average of the smaller, and
richer, OECD during the early 1970s, when we ranked eighth out
of 24 member countries. New Zealand’s per capita income gap
withAustralia emerged during the mid 1970s and has generally
widened since – our GDPper capita is now about 26% less than
Australia’s (Statistics New Zealand 2010a).
To close the income gap with the richer OECD countries,
our economy would have to grow faster than theirs for a long
period.As far as closing the gap withAustralia, New Zealand’s
average annual growth in GDPper capita would need to outpace
Australia’s by about two per cent a year over 15 years. That’s
quite a challenge.
What will drive this economic growth?
In simple terms there are two things that drive economic
growth.
Re-setting science and innovation for the next 20 years
Role of innovation in economic growth in a New Zealand context
Struan Little*
New Zealand Treasury, PO Box 3724, Wellington 6140
Struan Little is Deputy Secretary, Dynamic Economy at the New Zealand Treasury, and is respon-
sible for the co-ordination of policy advice on productivity and growth, as well as a range of sectoral
responsibilities. He has a strong interest in economic strategy and issues arising from the global
financial crisis. At the forefront of his current work programme is ensuring that New Zealand achieves
a sustained higher rate of productivity growth as we come out of the recession.
Struan has worked in a range of economic policy roles in the public and private sector. Since joining
the Treasury in 1987 he has held various senior positions within Treasury including Manager, Macro-
economic Policy, head of the Treasury’s Strategy Unit, Assistant Secretary responsible for interna-
tional, infrastructure and environmental issues and Acting Deputy Secretary, Economic Performance.
Between 1993 and 1995, Struan was seconded from the Treasury to the World Bank, where he held
an Advisor position at New Zealand’s shared constituency office.
* Correspondence: struan.little @treasury.govt.nz
Figure 1.  Real GDP per capita for Australia, New Zealand and OECD. At 2000 PPP (purchasing power parity) prices,
1972–2009. Base: OECD 2001(= 100). Source: Statistics New Zealand 2010a, Australian Bureau of Statistics 2010, and
OECD Factbook 2010.
New Zealand Science Review Vol 68 (1) 2011 
There’s working harder: New Zealand is already quite good
at that. We work more hours per person than the OECD average
and countries like Australia and the US.
There’s also working smarter: getting more output from each
hour worked. Over the past 200 years, income per head in the
developed world grew about 19 times. The economic evidence
suggests that most, if not all, of this income growth came from
improvements in productivity rather than increases in hours
worked per person.
New Zealand has been poor at this.An hour worked in New
Zealand produces about 30% less value-added than an hour
worked inAustralia – despite the fact that the rate of productivity
growth across the other side of the Tasman has been slowing in
recent years (OECD 2010a).
So, broadly, to lift economic growth New Zealand needs to
work smarter: to get more output from each hour worked. On
its own, just working harder isn’t going to be enough.
How can we work smarter? We know from analysis done
by the OECD that between 25% and 45% of productivity gains
come from innovation. Most of the huge rise in living standards
in the developed world over the last two centuries has come
about through technological breakthroughs based on increased
knowledge. So it’s crucial that we deepen our understanding
of how innovation happens and then get much, much better at
it so that the economy can deliver the higher living standards
we’re aiming for.
What drives innovation?
Science is one critical input, but the story of how innovations
arise is much more complex than putting resources into basic
research to get new technologies downstream. Innovation and
working smarter is all about getting new ideas flowing into the
creation of new products, new and improved processes and
technologies, and softer changes like new business models or
novel methods of marketing and distribution.
Most innovation takes place in firms, and often this is
through new ideas being generated on the shop floor, among
users of systems, and in response to end-users. Firms need to
innovate to compete and grow, and in the process come up with
new products and processes and improvements in productive
efficiency.
How good are we at innovation?
Statistics New Zealand surveys suggest that New Zealand
firms have levels of product, operational and marketing inno-
vation that compare reasonably well with other small OECD
countries (Statistics New Zealand 2008).Another indicator, the
IBM–University of Auckland’s Innovation Index, found that
New Zealand’s rate of innovative activity rose by 13% between
1998 and 2000 but then remained virtually flat for the next seven
years before falling sharply in 2008. In contrast, the same index
forAustralia rose more than 25% in the same period (IBM New
Zealand and University of Auckland Business School 2010).
These figures indicate that there’s plenty of potential for lifting
our innovation performance.
One input to firms’innovation is research and development
(RD), but they are not the same thing (Figure 2). While busi-
ness RD is a vital part, firms that innovate do not necessarily
conduct RD – only 8% of all businesses in New Zealand per-
form RD compared with much higher rates, 46%, performing
wider innovation, and this disparity exists in all sizes of firms
(Statistics New Zealand 2010b).
While firms are at the centre of the innovation process,
government has a big role to play. The most important and most
effective role for government is improving the policy settings
that have a pervasive impact on firms’ ability to perform: by
maintaining a stable macro environment, cutting back on poor
regulation, by boosting competition, addressing the taxes that
are the most negative for growth, investing in infrastructure,
and making the public sector more efficient. That provides us
with the base, for ensuring the systems and incentives are in
place that allow innovation to occur.
Secondly, RD is an important part of the innovation system
– so government has to make the most of its public investment
in science to yield benefits to New Zealand. This is especially so
now, when fiscal conditions are extremely tight.To get economic
impact we particularly need the output from the science system
to be applied in the economy by firms – the wider the better.
In saying this, I recognise that science also contributes to other
important outcomes for New Zealand, including environmental,
health and social. That said, being from Treasury, I tend to use
an economic lens.
Getting economic impact from our public
investment in science
There’s no doubt that New Zealand produces very good science,
and leads the world in some areas. We have a strong research
base – for example, we are placed ninth out of 23 OECD
countries in terms of the number of science and engineering
articles published per one million inhabitants (OECD 2006).
We also rank sixth out of 28 OECD countries for the number
of RD personnel per 1000 people employed (OECD 2010b).
Figure 2.  Research
 development (last
financial year) and
innovation activity (last
two financial years),
by business size, to
August 2009. Source:
Statistics New Zealand
2010b.
New Zealand Science Review Vol 68 (1) 201110
However, when it comes to converting this knowledge into
commercial opportunities and higher value, we do not do as
well; this was confirmed by the OECD which has highlighted
that technology diffusion and adoption is a weakness for New
Zealand (OECD 2007).
Getting science connected with business is the key, so
science can give business a hand-up to solve problems entre-
preneurs are grappling with and to realise opportunities they
have glimpsed. As important – or even more important – out
of this synergy can come unanticipated developments for novel
products or processes, opening up completely new products,
applications and markets.
A case in point is the development of the electric fence.
It was Bill Gallagher who first developed the first electric
fence and supplied it to New Zealand farmers. These fences
were battery-powered and did a reasonable job, but their useful-
ness was limited because, if grass touched the wire, the voltage
would drop and the animals could just walk through. What led
to the electric fence industry taking off was the invention of
unshortable electric fence technology by a public sector sci-
entist working at Ruakura. The new reliable fences, powered
from the mains supply, utilised a high current in short bursts
which were safe for both livestock and people. Since then,
Gallagher’s commercialisation of the improved technology has
revolutionised farm grazing around the globe, and unforeseen
diverse applications have arisen – from corralling big-game
animals to electrical and alarmed security fences to keep people
in or intruders out.
Of course, impacts can also be unforeseen. A rich source of
unforeseen applications arises when researchers and users get
together and share their ideas and perspectives.
An example is the ‘camera pill’ – a disposable pill-sized
camera that passes straight through the digestive tract, con-
tinuously broadcasting pictures of the intestine to an external
receiver. This was invented by a guided-missile designer in
Israel who got the idea after talking with a gastroenterologist
who was suffering from undiagnosed stomach pain. This story
also illustrates the benefits of being connected internationally.
The concept of a camera pill was actually being developed in-
dependently in Israel and Britain. These two groups of scientists
later got together and successfully collaborated to develop the
technology.
So getting users and scientists to talk to each other, to un-
derstand each other’s perspectives and feed off each other’s
ideas will be an important part of getting our innovation system
humming. While this is already happening to some extent, we
think there is room for improvement.
Survey results show that ‘existing staff’ and ‘customers’
were the most common sources of information that businesses
used for the purposes of innovation (Figure 3). Less than 10% of
businesses rated either ‘universities or polytechnics’or ‘Crown
research institutes (CRIs), other research institutes, or research
associations’ as important sources of information.
The picture is much more varied at the industry level.
In the education and training industry, 22% of businesses
rated ‘universities or polytechnics’ as important sources of
information of innovation, but only 1% in the retail trade in-
dustry did so.
In the primary sector, 23% of businesses in the agriculture,
forestry, and fishing industry rated ‘CRIs, other research insti-
tutes, or research associations’ as important sources (Statistics
New Zealand, 2010).
However, what strikes me most is the potential for a much
greater flow of information between our public research organi-
sations and firms – and I can’t help thinking what great ideas
we could be missing out on. I hope that’s a thought you’ll take
away too.
Recent changes in the science sector
There have been wide-ranging changes in the science sector
in the past year aimed at supporting economic growth. These
include:
•	 Early next year will see the amalgamation of the Ministry
of Research, Science  Technology and the Foundation for
Research, Science and Technology into the new Ministry
of Science and Innovation (MSI). This will bring policy
making and funding together, remove some fragmentation
in the system, and give the sector a single and stronger lead
agency.
F i g u r e 3 .   S o u r c e s o f
information for innovating
businesses (last two financial
years at August 2007 and 2009).
Source: Statistics New Zealand
2010b.
New Zealand Science Review Vol 68 (1) 2011 11
•	 The Taskforce set up a year ago to examine how the CRIs
can best deliver on national priorities and contribute to eco-
nomic growth, has reported. The process of implementing
its recommendations is under way.
•	 Business RD has been growing in recent years from a
low base. Although our business RD is relatively low by
international standards this can be largely explained by our
industry structures, size of firms, and distance to market.
Given that a large body of empirical evidence suggests
that business RD has a significant impact on economic
growth, encouraging it is important. Budget 2010 made
provision for four initiatives to boost business RD and
improve technology transfer and commercialisation from
publicly funded research to firms (technology development
grants, technology transfer vouchers, the national network
of commercialisation centres initiative, and technology
transfer initiatives).
•	 In the tertiary education sector there have been changes to
the Performance-Based Research Fund evaluation proc-
ess to ensure that excellence in applied and commercial
research is properly rewarded.
Where do we go from here?
We need to ensure we get the best out of these substantial
changes in the science system. The new MSI will need to
live up to its name and ensure that innovation is as central as
science policy. It will probably mean some shift of focus and
funding from ‘blue skies’and basic research to applied research
of relevance to firms. It will need to apply energy and drive to
getting a step-change in collaboration and knowledge transfer
both within the science sector and between the science sector
and firms.
New Zealand only produces a very small percentage of
global knowledge, so we have to be smart technology adopters.
To do this we need to be deeply connected with the global in-
novation system. We already have many good linkages with
international science, but I think we can do even more. We need
our public research organisations not only to be excellent at
keeping abreast of leading-edge science and emerging technol-
ogy, but also to excel at adapting it for New Zealand settings and
turning it into commercial opportunities for our firms.
We need to ensure that the CRI reforms help to maximise
the economic benefit from CRI research, and to get this we
need New Zealand firms to be able to turn these findings into
profits. We need them to forge partnerships with the private
sector to help CRIs plan their research more in line with the
needs of industry, and give the private sector an early insight
into potential investment opportunities. It’s vital too that CRIs
put a much greater emphasis on transferring the knowledge
and technologies they generate to New Zealand businesses.
The new arrangements for funding and monitoring CRIs will
help cement this in.
The new business RD incentives and commercialisa-
tion initiatives are under way. We need to ensure that they are
evaluated properly and learn from our experience of them in
practice.  We want to facilitate Commercialisation Centres to
build up scale, expertise, and networks so that they become
excellent at commercialising bright ideas.  It’s Treasury’s view
that further incentives for business RD are worth consider-
ing, but these will need to be within the bounds of our fiscal
constraints.
We must also build up a stronger focus, not just on com-
mercialisation and technology push, but knowledge transfer
more generally. To capitalise on our innovation potential, we
have to ensure that the flow of ideas is genuinely two-way, not
just from public research organisations to firms but from firms
to scientists, scientists to scientists and, where possible, from
firms to firms.  Building stronger networks, with highly mobile
researchers with strong links to industry, will be part of this, as
well as accessing and adapting the best ideas from abroad.
Conclusion
I want to leave you with the message that New Zealand’s future
economic performance will depend on innovation. Research is
one important input to this, but ultimately it is firms that take
up and apply it for economic benefit for New Zealand. To get
the best out of our science system, the flow of ideas between
the science system and firms needs to be strong and genuinely
two-way.
References
Australian Bureau of Statistics 2010.
IBM New Zealand; University of Auckland Business School 2010.
Innovation Index of New Zealand 2010. IBM New Zealand
and University of Auckland Business School, University of
Auckland.
OECD 2006. Science, Technology and Industry Outlook 2006. Paris,
OECD, table 38.
OECD 2007. OECD Reviews of Innovation Policy – New Zealand.
Paris, OECD.
OECD 2010a. Estimates of labour productivity levels 2009. Paris,
OECD Database.
OECD 2010b. Main Science and Technology Indicators. Paris, OECD.
Vol 2010/1, table 10.
Statistics New Zealand 2008.
Statistics New Zealand 2010a. Comparing the Income Gap between
Australia and New Zealand: A 2025 Taskforce analytical report
2010 update. Wellington, Statistics New Zealand, September
2010.
Statistics New Zealand 2010b. Innovation in New Zealand: 2009.
Wellington, Statistics New Zealand, June 2010.
New Zealand Science Review Vol 68 (1) 201112
Introduction
I would like to talk to you about two cultures within the field
of RD – on the one hand, the culture of scientific research,
and on the other, the culture of technological development for
industry. These two activities and their associated cultures are
not the same, nor indeed are their underlying purposes. This
disparity of purpose flows through into the motivations which
drive those who engage in each activity, and should be reflected
in the excellence criteria used to assess performance. In New
Zealand we have for many years confused these two activities,
their purposes, their cultures, and indeed our systems of recogni-
tion for achievement in them. Much of this confusion has come
from within the research community itself, stemming in some
cases from unfamiliarity with the other field, in others from self
interested promotion of one activity at the expense of the other,
and in the worst cases intellectual snobbery and condescension
reinforced by the review of peers unevenly selected from one
culture or the other. Unless we are able to address this confusion
here in New Zealand we will continue to have an innovation
system which under-performs and an economy which does not
meet our expectations.
The two cultures
I make no apology for the anecdotal character of my remarks.
In my own career I have moved back and forth constantly
between these two worlds – one perhaps best typified by the
ethos and culture of the Marsden Fund, and the other the cus-
tomer-focused and applied research world of the independent
Research Associations.
The culture of scientific research
I will not labour a description of the culture of scientific dis-
covery. I was recently privileged to attend the 350th
Convoca-
tion of the Royal Society (of London). This was a celebration
of the intellectual contributions of some of the most important
scientists ever to have lived and recognition of the contribution
which collective international effort has made to our understand-
ing of the universe. The culture underlying this achievement is
not only internationally consistent, but it is also altruistic and
inspirational in its ambition. Its ambition is to progress human
Re-setting science and innovation for the next 20 years
Science, innovation and business
G.A. Carnaby*
Royal Society of NewZealand, PO Box 598, Wellington 6140
*Correspondence: garth.carnaby@royalsociety.org.nz
knowledge – arguably one of the most difficult and important
tasks we can set ourselves. Progress is made using the scien-
tific method first refined by the Royal Society’s membership
in London over 300 years ago. It involves the proposing of
hypotheses and theoretical models based on observations and
analysis, the testing of these propositions with experiments,
and, when hypotheses are disproved, proposing new ones,
and so on. Progress is recorded through open publication,
and recognition is based on priority in publication dates, the
impact factor of journals which agree to publish the research
after peer review, and how frequently publications are cited by
subsequent researchers. Whilst these widely used metrics are
often criticised as favouring one discipline over another, or as
being insensitive to the separately judged impacts of individual
discoveries, any international peer review panel set up to assess
science achievement will place at least some reliance on these
globally accepted measures.
The culture of technological development for
industry
Why on earth then, given the inspirational character of discovery
in science, would any young person with a brilliant mind, lower
themselves to target what might appear to be the lesser or even
more tawdry goal of technology development? To answer this
question, I have had to reflect on why I have personally chosen
to devote so much of my own career to this apparently lesser
challenge, and especially as I became more experienced in the
latter stages of my career. Is it because I was unable to make a
useful contribution to the challenging world of global science?
This is undoubtedly to some extent true, but maybe there are
other motivations too.
The answer I have come to in the end is that I began to find
technology development more interesting, more immediately
relevant to the competitive advantage of our own small economy
here in New Zealand, and requiring a more complex mastery
of a broad range of skills. So what actually do I mean by the
phrase ‘technology development for industry’?
I can perhaps best answer that by saying that I don’t mean
translation of research outcomes into commercial solutions, or
technology transfer, or the commercialisation of research. The
use of these phrases reveals a linear mindset of the application
of science which is not how skilled technologists actually do
Garth Carnaby spent the first twenty years of his career researching the application of mathematics
and physics to the industrial utilisation of the New Zealand wool clip. In 1992, he became Managing
Director of WRONZ (Inc.), now the Textile Science  Technology Section of AgResearch, and led
the organisation through twelve years of continuous profitable growth. His involvement in seeking
commercial applications for science in the wool and textile industries resulted in 2000 in his election
to the role of World President of the Textile Institute, based in Manchester.
Throughout his career, Garth’s interests have covered a very wide span, from the most basic sci-
ence to the application of science in industry. His strong support for the vital role of basic research
has been evidenced by his two spells on the Marsden Fund Council, first as Chair of the Physical
Sciences Panel and then as Deputy Chair and Chair.
Dr Carnaby was elected a Fellow of the Royal Society of New Zealand in 1992, and in 2009 he
was elected its President.
New Zealand Science Review Vol 68 (1) 2011 13
development. What I do mean is the practice of responding to
industrial or market needs through a deliberate process of tech-
nology development in order to meet those needs. It has more in
common with design, product development or engineering than
science per se, but of course it might require the application of
science to solve the problem – and certainly it will involve the
scientific method or something like that. There may even be
publications, but that is not the purpose of this activity – indeed
there may not be any journals in the field in which to publish
and almost certainly none of significant impact factor so as to
enable the researcher to build a scientific reputation.
Indeed there are many cases where scientific knowledge is
not the key component of the solution at all. Some might argue
that what I am describing is not science and they may be right.
They might disparage it by describing it as only a glorified form
of consultancy. However, it certainly is an extremely creative
activity which may involve the application of old science to
a new problem of local relevance, or to the establishment of
patents and/or the achievement of other demonstrably original
and innovative contributions.
Although the solutions found may be of broad benefit to
mankind, the primary motives for this activity are proprietorial,
either at the national level or even at the level of the individual
inventor. It is that unashamed proprietorial character that is the
key to the wealth creation and capture which is aimed for.
Summary comparison of key features
Previously I’ve suggested some excellence criteria which could
be used to assess the performance of those engaging in these
two distinct cultural activities (Carnaby 2009). Table 1 sum-
marises these, together with some associated characteristics
describing the activity.
Implications for New Zealand (Inc)
Failure to fully understand and value both of these cultures in
New Zealand will in my view lead to a sub-optimal innovation
system. I don’t think we can point the finger here at the gov-
ernment or government agencies. In fact they have developed
a range of public intervention vehicles, from Marsden Fund to
Technology New Zealand, which reflect the necessary values
and which fund the most promising proponents of both sci-
entific research and development for industry. What we have
not done, however, is reach a consensus amongst researchers
over the prioritisation of these activities. Nor have we achieved
an acceptance of the need for co-existence, nor have we
achieved a differentiated system for assessing excellence via
peer review.
I believe it is important that we make progress on these mat-
ters within the New Zealand research community. I think it is
important for New Zealand. We are a small community remote
from the markets to which we are capable of successfully sup-
plying only an alarmingly small number of commodities. The
number of companies capable of exporting at scale is low. If
we are to improve this situation, the case for more technologi-
cal development to support both the successful industries we
do have and to create new ones which we do not, is in my view
compelling. I do not personally believe that putting all our eggs
into the basic research basket, the results of which will be openly
published in international journals, is the optimal strategy. We
do seem to be under-investing despite the existence of some
wonderful examples of market-led technological develop-
ment. An example of such an opportunity is represented by the
‘Placemakers Lab’ on the Boulder Bank in Nelson, where the
Cawthron scientists have cloned the breeding life-cycle of our
major shellfish species. This will enable selective breeding of
improved stock to commence, and hence a competitive advan-
tage for the country to be created. This won’t lead to papers in
Nature, but it could add $1 billion to aquaculture exports from
New Zealand. We could also cite the Fonterra ingredients team
at Palmerston North, or the HortResearch efforts in the sensory
science of New Zealand wine.
Whilst Government has developed differentiated funding
streams which do reflect these differing cultures, the Govern-
Table 1.  Criteria to assess performance of those engaging in the two distinct cultural activities (Carnaby 2009).
	 Activity	 Value proposition for 	 Excellence criteria	 Frequently levelled 	 	
	 	 use of New Zealand 	 	 criticisms	 	
	 	 taxpayer funds	
Basic scientific 	 Discovery of new 	 Serendipitous	 Novelty re literature	 Limited direct		
research	 scientific knowledge	 discoveries		 economic return		
				 on investment
	 Engagement with 	 Informs Tertiary	 Publication	 No direct pathway	 	
	 global science	 Education		 to New Zealand		
				 outcomes
	 Intellectual stretch	 Informs applied science	 Citation	 Self-indulgent		
				 lifestyle choice
	 Individualistic	 Cultural imperative	 Peer review			
	 	 	 	
		 Step changes in 				
		 economic activity				
	 	 	 	
		 Market failure	
Technological 	 Application of existing	 Competitiveness of	 Clarity of need	 Poor science
development and 	 knowledge to new 	 New Zealand
applied research 	 New Zealand problems 	 enterprises	 Novelty	 Industry should pay
	 	 	 	
	 Needs driven by 	 Export growth	 Economic impact	 Takes resources		
	 the potential user			 away from basic		
		 Market failure without	 Peer review	 science or public		
	 	 State leverage		 good science		
	
		 Large irreversible 		 Private benefit		
		 short-term gains		 capture
New Zealand Science Review Vol 68 (1) 201114
ment investment in applied research such as the Research for
Industry area has often been looked down upon by academics
as being unworthy of their attention.
Others have a part to play too. Let’s start close to home with
the Royal Society of New Zealand. The Society has made a
clear decision that its Academy will embrace a relatively broad
church. It now includes scholarly research in the humanities
alongside traditional science disciplines as well as applied sci-
ence and technology. However, do its committees who elect the
fellowship really apply a multidimensional set of excellence
criteria in selecting its fellowship or does it continue to place an
over-reliance on traditional research scholarship? For a number
of years now I have berated the Academy on this issue – I have
suggested that we try to elect say a couple of new fellows
each year whose research has created a $100 million sector in
the New Zealand economy. Surely these people exist, can be
identified and their contributions measured and assessed – or
is Fellowship the wrong accolade – perhaps it is, and for this
reason I have recently been promoting the enhancement of the
status of special medals such as the Pickering, and by giving
out a couple of special President’s awards.
I have also been very pro-active in lobbying the Tertiary
Education Commission so as encourage them to make the
Performance Based Research Fund excellence criteria more
permissive of development as well as the more traditional areas
of research and scholarship. Not all academics want to engage
in development, and nor should they be forced in this direction.
Their main job is to produce graduates whose education has
been informed by current research. However, some academics
– maybe 15-20% – do enjoy development, and would engage
more actively in it if their career reward incentives placed higher
store on it, and were permissive of the time so expended. In my
view, graduates coming from a more entrepreneurial research
and teaching environment might well be expected to be even
more valuable to the country. This is not to mention the country
achieving greater direct economic benefits from our large Vote
Education contribution to academics salaries.
Fortunately, too, we have a unique opportunity in implement-
ing the CRI Task Force recommendations to refine the role in
the New Zealand innovation system of the CRIs. The CRIs, the
independent industry-controlled Research Associations, and
private companies are the key to our progress in technological
development.
The CRI Task Force clearly signalled the need for the CRIs
to become better focused on delivery of results to their sectors
for the benefit of New Zealand. The CRI Act requires the CRIs
to carry out research. In the context of this presentation, what
does ‘research’mean and how will the Boards of the CRIs be in-
structed or expected to interpret that? By research, do we intend
them to behave as if they were ‘student-less universities’ with
large platforms aimed at ‘science discovery’with international
publication as the main objective? I hope not.
It is widely believed in the international science community
and indeed accepted by economists that science discovery often
precedes technological development and that more investment
in it might fuel faster technological growth. However, whilst I
personally would agree with this in general as it pertains say to,
say American scientists and the US economy, or even British
scientists and the British economy, the issue is more subtle for
New Zealand. I would certainly agree that open publication of
New Zealand science in US journals might stimulate the US
economy too, but will it stimulate ours? I think we have to ask
more searching questions of our CRI investments and the benefit
capture mechanisms they propose to use.
Nearly all CRIs are likely to have an objective of ‘science
excellence’. If so, which criteria would be used to assess it
– academic research criteria or technology development criteria?
The recent budget signalled a great deal of new funding avail-
able through the primary growth partnership or for business-
oriented research. This represents a major new opportunity for
New Zealand-based scientists to engage with business and to
win new resources for their research teams. However, the cul-
ture required to succeed in this will be different. It will require
a service mindset. It will insist that scientists meet with the
leaders of industry and listen to what it is that industry needs
from science. I hear scientists say that industry leaders need to
listen to scientists, too, but that’s beside the point – they are
unlikely to do so because they have many demands on their
time and for their discretionary capital. It is my view that it is
the scientists who need to do the listening for needs, not the
other way around.
It will require the services of generalists who are capable
of linking science expertise to the needs identified. It will also
require a willingness on the part of scientists to drop what they
are doing in order to respond to the issues identified.
Some members of the science community may regard what
I am saying today as heresy, but what I am talking about is
nothing other than excellence in applied research. We don’t
need every scientist in the country doing applied research. But
we do need an army of scientists doing it if we are going to
close the standard-of-living gap with Australia. The CRIs in
particular need to take the lead in this. Industrial Ressearch
Ltd made a start last year with its competition, ‘What’s your
Problem, NZ’. We must avoid denigrating those scientists who
do devote their careers to the application of science to New
Zealand issues. Often this will be the application of old science
to a new problem. The results might only be relevant here. The
New Zealand science journals published by the Royal Society
of New Zealand are often avoided now because they have low
impact factors. However, they were developed as a vehicle for
communicating what matters to us, not to the audience for a
prestigious US journal.
If we are not to denigrate these applied scientists, ourAcad-
emy and our institutions will need to learn how to assess them
and do better at recognising them. We simply must recognise
their creativity, their energy, and their intellectual contribution.
Their contribution will typically integrate across a broader skill-
set of expertise and normally combine this with a pronounced
focus on leadership. Just as all of us would love to see one of
our basic scientists win a Nobel prize whilst working in New
Zealand, so too wouldn’t it be good if we could equally celebrate
someone whose ideas and creativity have led to the develop-
ment of an extra $1 billion per year of wealth in our economy
and enabled us to enjoy the standard of living to which our
community aspires.
Reference
Carnaby, G.A. 2009. ‘The’ New Zealand Science System – An
approach to evaluating structure. New Zealand Science Review
66(4): 131–135.
New Zealand Science Review Vol 68 (1) 2011 15
Over the last 40 years New Zealand has gone from being the
8th
to the 23rd
in the OECD rankings of GDP per capita. Its rate
of productivity growth has been low for at least 30 years. As a
consequence, average annual wage rates are roughly 25% lower
thanAustralia’s, and 20% lower than Denmark’s. Between 1983
and 2009 our share prices remained nearly static, while those
of Australia and Denmark both rose by 500%. The situation
has been recognised by government, and there are a number of
proposals under way to significantly boost public and private
investment in research and development. Many of these will
affect the roles of current and emerging players in the science
and innovation field including tertiary education.
It is well known that the average OECD government invests
0.65% of its GDP in research and development. New Zealand
invests one-fifth less than that, and our private sector invests
two-thirds less than the average OECD private sector.
The 2010/11 Budget created several interventions, many
of them formulated on the back of the new Economic Growth
Agenda, which is focused on: a better regulatory environment
for business; a growth-enhancing tax system; better infrastruc-
ture; better public services; improved skills and education; and
improved science, innovation and trade.
So the environment seems set for New Zealand to rectify its
poor innovation performance, and polytechnics and institutes
of technology have an important emerging role in the innova-
tion system.
New Zealand’s Institutes of Technology
and Polytechnics
The system of Institutes of Technology and Polytechnics
(ITPs) in New Zealand is unique and the envy of many other
jurisdictions:
•	 They specialise in applied, practical learning outcomes at
the high end of the qualifications spectrum.
•	 ITPs offer their own degrees and postgraduate qualifications,
and have access to the Performance-Based Research Fund
(PBRF).
•	 ITPs have strong and intimate links with industry at national
and regional levels, but especially with Small/Medium En-
terprises (SMEs).
As a feature of our tertiary education system, ITPs are
closely associated geographically not only with centres of
population, but also with centres of economic interest, including
agriculture, aquaculture, and manufacturing and other industries
(Figure 1).
The largest ITPs have combined to work together as the
Metropolitan Group. These six Metropolitan ITPs (Metros),
Re-setting science and innovation for the next 20 years
The role of polytechnics in the innovation system
Linda Sissons*
Wellington Institute of Technology, 11 Church Street, Wellington 6011
*Correspondence: linda.sissons@weltec.ac.nz
Figure 1.  Distribution of the 20 Institutes of Technology
and Polytechnics in New Zealand. Dark circles, Metro Group;
light and grey circles, provincial ITPs.
Linda Sissons has been chief executive officer of WelTec, the Wellington Institute of Technology
since 1999. Dr Sissons has served on a range of government taskforces and inquiries, including the
Tertiary Education Advisory Commission in 2002.
New Zealand Science Review Vol 68 (1) 201116
based in Auckland, Manukau, Hamilton, Wellington, Christch-
urch, and Dunedin, work very closely together, and have led
the development of a web-based tool for identifying where
business-based innovation resources are available in any one of
the contributing Institutes through the website Innovating New
Zealand at www.innovatingnz.org.nz .
Some regional ITPs also have a strong track record in re-
search and technology transfer, such as the Eastern Institute of
Technology (EIT) in Napier, and the Bay of Plenty Polytechnic
(BOPP) in Tauranga. These are fully fledged tertiary education
institutions that devote some time and effort to research. The
research and development that they do relate closely to the
characteristics of their local economies: for the EIT the focus
is oenology and agriculturewhile the BOPP focuses on marine
biology, aquaculture, and local environmental issues like the
cause of lettuce bloom in the Tauranga harbour, and the impact
of boat disturbance on sea grass.
The Metropolitan ITPs have similar patterns. While gener-
ally more broadly-based than regional polytechnics, they have
particular strengths that relate directly to their local economies
and interests of employers. So, for example, Wintec in Hamil-
ton has a strong focus on agribusiness; WelTec, in Wellington,
has a strong focus on enhanced manufacturing; Christchurch
Polytechnic Institute of Technology has a strong focus on IT
and electronics.
So it should be noted that the ITP sector within New Zea-
land’s tertiary education system is geographically dispersed
and also reflects the geographical dispersement of communities
and industry around the country. It also has growing strength in
research and development (RD) and technology transfer (TT),
both strongly linked to the needs and interests of the regional
businesses, many of which are small and medium enterprises.
Size and saliency of the Metropolitan ITPs
Together the Metros within the tertiary education system offer
joint qualifications and services, and make a sizeable contribu-
tion to New Zealand’s education and intellectual landscape.
In 2009, they were responsible for delivering 50% of the
entire (20-strong) ITP sector equivalent full-time students (38
000). They won $500 m revenue, 50% of the entire sector’s
total revenue. They awarded 15 000 undergraduate degrees, by
far the majority of degrees within the sector, and another 1200
post-graduate degrees. External research revenue earned in 2009
was $2 m. By contrast, the internal investment in research was
around $9 m (Metro Group 2010).
As ‘research polytechnics’, the Metros are marked by very
close connectedness with industry, both large and small com-
panies around New Zealand. This is manifested by a number of
key characteristics. About 850 or more companies form part of
the decision-making and advisory apparatus of the ITPs. Their
representatives form advisory committees, give guidance on
the content of qualifications, and are often involved in deci-
sions about appointing staff. They second their own staff to
act as teaching staff within their local institute of technology.
They are frequent visitors. Some of them are actual industry
‘partners in residence’, others give time and space for students
of those institutes, and frequently, employ the graduates. These
companies often co-fund equipment, or at the very least, they
are regular users of equipment that has been bought with public
funds for education and research.
Figure 2 shows the evolution of the role ITPs play in an
industry’s ability to innovate and commercialise a product or
service over the past decade. In addition to an industry’s evolu-
tion over that time the contribution of ITP’s to the sector itself
has evolved.
Traditionally (Phase1) ITPs delivered graduates with pre-
employment training in the skills needed to service the core,
commodity-based industries, and to keep the basics of the
domestic economy ticking over – we trained builders, farmers,
foresters, meat workers, office staff, cooks, nurses. That phase
pretty well reflected the stage of development of much of the
New Zealand economy at that time.
The second phase is where many of those same industries/
companies started to build ‘value- added’ into their products,
and differentiated on the basis of value for money.
The third phase is where industries and companies take
decisive steps into international markets with highly developed
and differentiated products, where imitation becomes difficult
because of the cluster of skills and ways of working that are
bundled up in it. There are a number of key characteristics:
•	 These companies earn big money.
•	 RD is integral to their success.
•	 Because of the bespoke nature of their skill and knowledge
requirements, they are learning companies, and for those
who find an education provider they can partner with, the
relationship is a genuine partnership.
Phase 4 belongs to industries and companies that have not
evolved in this way but are created to meet an entirely new
need. They need the highest level of partnership intensity,
and have the highest requirement for fully infused RD. That
combination of focused skills development and participation
in the company’s own RD goals is what is likely to deliver
the greatest economic value. The most advanced ITPs are now
able to meet the needs of Phase 4 companies.
The ability to innovate consistently and with sufficient ‘new-
ness’ and to deliver economic value through innovation is not
easy. It requires high levels of achievement in research, and a
business strategy that encompasses both capital development
and organisation-wide skills. New Zealand’s ITPs can play
Figure 2.  Key characteristics of New Zealand companies
on the spectrum, commodity-based to high-tech high value,
in the evolution of industrial innovation, and the potential
contribution of ITPs (based on Webb  Grant 2003).
New Zealand Science Review Vol 68 (1) 2011 17
a unique role in reconciling that tension, and in the journey
between these poles.
The New Zealand Institute in its NZ Ahead Report (New
Zealand Institute 2010) draws on both OECD surveys and the
World Competitiveness reports to dig into New Zealand’s busi-
ness innovation and business sophistication track record to see
how we are doing against others on a raft of measures. Table 1
summarises the Institute’s findings.
Technology Transfer
•	 Although ITPs conduct ‘blue sky’and development research
as well, technology transfer is peculiarly appropriate territory
for them.
•	 This means that applications developed elsewhere are
adapted to New Zealand or company-specific conditions, and
the problems of implementing them in specific companies
are more able to be solved.
•	 Some of the skills needed for successful technology trans-
fer within firms and industry are systems thinking and
problem-solving in a multi-disciplinary setting. ITPs prepare
adept graduates through workplace projects, problem-based
learning and mechanisms such as internships, cadetships,
and outplacement which are often integral and compulsory
parts of courses of learning.
•	 Technology transfer is often as much about skilling the new
users as it is about the technology itself. Because of their
vocational and technical training mandate, ITPs can be the
right research partner for this work.
Training
•	 Training, up-skilling, and company-wide skill development
are the core business of ITPs and the ‘research polytechnics’
in particular.
•	 This function is much broader than training for use of new
technologies. It is also cultural, strategic management train-
ing so that, for example, a new technology can be embed-
ded into a newly ‘lean’ environment and work processes.
Typically, it can also involve raising technical literacy and
computational skills to high levels.
•	 Training should not be discounted as a contributor to innova-
tion. ‘The .... current focus on fostering productivity growth
via exciting high-tech breakthroughs misses a big part of
what really drives innovation, the diffusion of better busi-
ness processes and management methods’ (The Economist
2010)
To summarise, ITPs, and especially the ‘research polytech-
nics’, have a particular and important role to play in science and
innovation. They are supporting the next TIN100 (Technology
Investment Network top 100 New Zealand companies) and the
next after that.
References
Economist 2010. How to Grow: A special report on the world
economy. Economist 9 Oct: 22. http://www.economist.com/
mode/17173886
New Zealand Institute 2010. NZ Ahead: A report card of New Zealand’s
social, economic, and environmental wellbeing. http://www.
nzinstitute.org/index.php/nzahead/
Webb, C.J.; Grant, C. 2003. Economic Transformation: An
Implementation Framework. New Zealand Tertiary Education
Commission, Wellington.
Basically:
•	 There are important things going right, but they are some-
what fragmented and isolated from one another.
•	 There are many important things not going so well. What
they have in common is that they spring from an unwilling-
ness by companies to invest their own money; and they are
often the product of too few of the players joining the dots
and working together.
Ways to enhance New Zealand’s innovation
scores
Ways in which ITPs can help to enhance New Zealand’s innova-
tion scores can be summed up in the acronym RDT3
(RD plus
TechnologyTransfer plusTraining).The key features potentially
available include:
Strong applied research capability
•	 Degree programmes are applied and students spend signifi-
cant time in industry and workplaces.
•	 The Innovating New Zealand website takes clients to which-
ever of the particpating ITPs staff or student research groups
can assist.
•	 ITPs are typically home to sophisticated technologies that are
there for use by industry, with staff and student resources to
assist. Much of this resource enables the creation of proto-
types and ad hoc devices which companies can requisition
or make for themselves.
Table 1. New Zealand’s innovation and business
sophistication rating.
What New Zealand does well
	 Quality of scientific research institutions (14th of 139 		
	 countries)
	 Sophisticated production process (26/139)
	 Local supplier and quality (16/139)
	 Willingness to delegate authority (10/139)
What New Zealand doesn’t do so well
	 Ranked 20/31 OECD countries in innovation
	 Low innovation score a key determinant of low GDP
		 per capita
	 95% of OECD average value since 2006
	 Competitive advantage through unique products/processes 	
		 (74/139)
	 Availability of scientists and engineers (67/139)
	 State of cluster development (56/139)
	 Company spend on RD (38/139)
	 Private sector invests two-thirds less in RD than ‘average’ 	
		 OECD country
Source: The New Zealand Institute NZ Ahead Report (Sept 2010)
New Zealand Science Review Vol 68 (1) 201118
Universities exist to innovate – and to train innovators. Some-
times the discoveries emanating from universities have direct
economic value through their value in industry, while sometimes
the value is to society or humanity without any apparent direct
impact on our economy. Governments and their advisors con-
tinue to fret about whether universities focus sufficiently on eco-
nomic outputs, as if these are somehow opposed to intellectual
pursuits. Yet there is plenty of support for the concept that the
intellectual and the economic are inextricably linked – that the
greatest economic gains any country can make in a competitive
world depend on deep investigation of difficult problems. The
key to unlocking the value in university innovation is presum-
ably then to ensure that universities are well linked to industry,
while enabling the universities to do what they do best.
Are such linkages in place in New Zealand? While it’s dif-
ficult to provide a nationwide assessment, at least some of our
universities now have deep experience of the paths between in-
novative research and its commercialisation, and signpost these
clearly to their staff. As a result, for many university staff in
New Zealand, there is no conflict between an academic output
and an industrial one – you can discover, protect, publish, then
commercialise in one smooth journey. Universities are also
making their intellectual capital available to industry in con-
tract research, and many academics are setting aside their own
research passions to pick up questions lobbed in from outside.
These two activities – innovation that drives commercial op-
portunities, versus innovation that responds to commercial need
– require different management, and some universities have
developed specialised systems to support both.
Can universities do better in fostering innovation? Uni-
versities can tweak their own research engines, especially in
developing long-term strategies to grow world-leading research
programmes. Universities might also engineer more effective
contact with a commercial sector that often has limited knowl-
edge of their capacity. And universities can work together, and
with other partners, to generate national research consortia of
sufficient scale to compete internationally.
New Zealand universities seem ready to accept a greater
role in actively promoting economic development. Many aca-
demic staff recognise there is no fundamental conflict between
academic freedom and maximising the economic benefits of
their work, since the availability of pathways for research
commercialisation need not interfere with the pursuit of excel-
lent research. Regardless of how greater economic impact is
achieved, universities are likely to insist that the diversity of
the academic community needs to be preserved, along with
the capacity of its members to innovate in whatever field they
choose. This ‘universality’ within universities is one of the
hallmarks of a successful industrialised nation, and allows
some of the most valuable innovation to spring from the most
unexpected corners.
Rod Dunbar graduated MBChB from the University of Otago, and later completed a PhD in im-
munology at the Wellington School of Medicine. After 6 years at Oxford University’s Institute of
Molecular Medicine, he returned to New Zealand in 2002 under a Wellcome Trust International
Senior Research Fellowship, and founded a new laboratory at the University of Auckland’s School
of Biological Sciences.
Associate Professor Dunbar’s current research encompasses a multi-disciplinary programme to
develop new immunotherapies for cancer and investigate the use of primary human cells in medicine.
In 2008 he was appointed the Director of the Maurice Wilkins Centre for Molecular Biodiscovery,
a Centre of Research Excellence.
Re-setting science and innovation for the next 20 years
Role of universities in innovation (Abstract)
Rod Dunbar* 
Maurice Wilkins Centre for Molecular Biodiscovery, University of Auckland, Private Bag 92-019, Auckland
*Correspondence: r.dunbar@auckland.ac.nz
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NZSR_68

  • 1. New Zealand Science Review Vol 68 (1) 2011 Official Journal of the New Zealand Association of Scientists One-day Conference, 21 October 2010 Re-setting science and innovation for the next 20 years New Zealand Association of Scientists in association with the Institute of Policy Studies, VUW
  • 2. New Zealand Science Review Vol 68 (1) 2011 Official Journal of the New Zealand Association of Scientists P O Box 1874, Wellington www.nzas.rsnz.org A forum for the exchange of views on science and science policy. Editor: Allen Petrey Production Editor: Geoff Gregory Contents ISSN 0028-8667 Editorial........................................................................................................................................................1 NZAS and Institute of Policy Studies, Victoria University of Wellington One-Day Conference, Wellington, 21 October 2010 Re-setting science and innovation for the next 20 years Welcome and introduction – James Renwick........................................................................................... 4 Setting the scene Opening Address – Wayne Mapp..................................................................................................................5 Role of innovation in economic growth in a New Zealand context – Struan Little.........................................8 Science, innovation and business – G.A. Carnaby.....................................................................................12 Tertiary education for science and innovation The role of polytechnics in the innovation system – Linda Sissons............................................................15 Role of universities in innovation (Abstract) – Rod Dunbar.........................................................................18 Enabling innovation – J.S. Rowarth and A.J. Parsons................................................................................19 Science annd innovation for sustainability New Zealand, new futures, new ways of science engaging with society? – Bob Frame, Alison Collins, and Richard Gordon..........................................................................................................................24 New Zealand’s productivity paradox Innovators, innovation and increasing returns to scale: Solving New Zealand’s productivity paradox – Shaun C. Hendy and Catriona M. Sissons........................................................................................28 Specific experiences of science and innovation in New Zealand The challenges and opportunities of commercialisation – Sophie Howard................................................33 Environmental prediction and innovation – Michael J. Uddstrom................................................................37 Building a magnetic resonance company in New Zealand (Abstract) – Andrew Coy.................................42 R&D in a small technology-focused business – Dan McElrea....................................................................42 Mäori perspectives on the science and innovation system – Garth Harmsworth.......................................45 Research beyond the direct focus of economic growth The wider roles of science and innovation – P.D. Gluckman.......................................................................49 Drawing it together – Murray Bain and Colin James................................................................................52 Book review Gillian Turner: North Pole South Pole – Allen Petrey..................................................................................55 New Zealand Science Review provides a forum for the discussion of science policy. It covers science and technology in their broadest sense and their impacts on society and the environment, both favourable and adverse. It also covers science education, science plan- ning, and freedom of information. It is aimed at all scientists and decision makers, and the interested public. Readability and absence of jargon are essential. Manuscripts on the above topics are welcome and should be sent to: The Editor, NZ Association of Scientists, PO Box 1874, Wellington, or e-mailed to allen.petrey@xtra.co.nz Cover photo: The Nokia inventor network (in Uusimaa, Finland) constructed using European Patent Office patents at the end of 2006. The network, which began to grow in 1993, contained 1356 inventors by that time. See pages 29–30.
  • 3. New Zealand Science Review Vol 68 (1) 2011 Editorial This issue of New Zeland Science Review contains the papers presented at the 21 October 2010 conference, Re-setting science and innovation for the next 20 years. When planning the confer- ence we were motivated by perceptions that government mes- sages about the nature of innovation and its role in the economy lack coherence (OECD 2007). We also felt that there has been insufficient explanation of why emphasis on innovation as a driver of economic growth justifies the apparent policy neglect of environmental, health and social sciences. We decided to read around the subject of ‘innovation’ and the ‘innovation system’and on the role of science and research in order to get a feel for where the debate sits in different parts of the world and the relationship to different policy settings in these countries.As scientists, we are immediately struck by the often ambiguous evidence on cause and effect in the innovation literature. In much of the social sciences it is almost impossible to run experiments to test theories so we must rely on hindsight and inference since we are dealing with human behaviour, complicated interactions, and sets of circumstances that differ from country to country. To put the role of research, science, and technology into perspective we have as background a very useful framework for thinking about the New Zealand productivity problem. Rick Boven and co-authors (Boven et al. 2010) take a ‘diagnostic approach’ to analysing the five drivers of labour productivity (entrepreneurship, innovation, skills and talent, investment, and natural resources (Kidd 2008)). Key points that arise from their analysis, relevant to improving New Zealand’s labour productivity are: • there are no silver bullets; • the level of entrepreneurial activity and training for inter- national business success should be a core concern; • more needs to be done to convert inventiveness into pro- ductivity gains; • there is much detailed work needed to improve school completion rates, school-to-work transition, and further improved literacy and numeracy skills and financial knowledge; • we need to increase domestic savings and improve capital formation; and • the use of natural resources should be carefully analysed to ensure opportunities are in New Zealand’s interests. The above analysis shows that economic improvement is likely to come from advances in a number of sectors among which research, science, and technology are but a part. The conference A key aim of the conference was to give participants an oppor- tunity to appreciate how far current thinking about ‘innovation’ and the ‘innovation system’has developed in New Zealand. We also wanted to identify what might be entailed if New Zealand really wants to raise its labour productivity and improve the role of scientific research in this. This is why we invited not only government representatives, but a range of other individuals who might have relevant perspectives. We chose representatives from the education system and those who have points of view about the characteristics of a system that values its knowledge people and how they might interact together to make a vibrant knowledge economy. We also invited a few speakers who are at the coal face, trying to turn knowledge into businesses. We also wanted to allude to global resource limitation or as one conference attendee put it ‘the elephant in the room’ and what this might mean for innovation policy. The conference gave an opportunity to evaluate the co- herence of government plans. The Hon Dr Wayne Mapp, Minister for Research, Science and Technology, reconfirmed the Government’s vision of science and innovation as being at the heart of the economy (p. 5). He laid out the Government’s economic growth agenda and current areas for action and alluded to Denmark, Finland, Singapore and Queensland as inspirational models. He stressed that we must build a ‘third pillar’ that focuses on high-tech manufacturing and services. Struan Little, a Deputy Secretary at the New Zealand Treasury, reinforced the Minister’s vision of innovation as being central to economic performance and growth (p. 8). He developed the theme that we need to understand how innovations arise, noting that technology diffusion and adoption is a weakness for New Zealand. He presents evidence that New Zealand’s research institutions are only a small part of the sources of innovation that businesses use, and stressed this is where gains could be made.Although the first two speakers focused almost entirely on innovation for economic growth, Professor Sir Peter Gluckman emphasised how important it is that we recognise that a science and innovation ecosystem reflects the intimate links between economic prosperity, social development, and environmental protection (p. 49). The quality of our future as human beings living on a rapidly degrading planet will depend on how well we develop new knowledge and use science and technology. He noted that those countries that have increased their investment in both the science and innovation in the last thirty years are now much more productive than New Zealand. These scene-setting presentations acknowledged that, at the moment, the Govern- ment is grappling with the impacts of the global economic downturn. So, with this as the context, we received just a hint that there might be further moves afoot in next year’s budget. We presume that the Government will have noted that some of our comparator countries have increased public sector RD expenditure to 0.8% of GDP (compared with the 0.5% that New Zealand spends) and have produced rates of productivity growth far greater than ours. To explore elements that might be hindering technology diffusion and adoption in New Zealand the conference dipped briefly into subjects related to personnel management, occupa- tional cultures and what might hinder interconnectedness. Dr Garth Carnaby, President of the Royal Society, contrasted the cultures of scientific research and technological develop- ment and analysed some of the attitudes that might impede technology transfer (p. 12). A failure to fully understand and value both of these cultures in New Zealand will lead to a sub-optimal innovation system. Professor Jacqueline Rowarth considers important workplace and cultural characteristics that are necessary for high productivity in ‘knowledge workers’ by reviewing the literature and seeking parallels to the New Zealand situation (p. 19). There are many insights in this paper that will be useful in the reorganisation of the New Zealand science and innovation system. Interconnectedness is a very important characteristic of a successful national innovation system if technology diffusion is to occur. Professor Shaun Hendy of Industrial Research Ltd
  • 4. New Zealand Science Review Vol 68 (1) 2011 and the MacDiarmid Institute,Victoria University ofWellington, used evidence of interconnectedness (using patents as a proxy) to reflect on New Zealand’s productivity paradox (p. 28). He presented evidence to show that, in order for New Zealand to diversify its economy; New Zealand should probably take its economic geography into account and be concerned to build a number of networks of highly connected people. The Centres of Research Excellence were given as good examples of how this model may be developed. In other words, New Zealand must begin to behave like a city of 4 million people. To broaden out the context in which we consider ‘innovation’ Dr Bob Frame and co-authors, of Landcare Research, scoped issues and opportunities for innovation (in the sense of new thinking) on subjects such as sustainable use of natural resources or reducing the use of damaging materials and processes while keeping economic prosperity on the agenda (p. 24). There is considerable scope for science to adopt new ways of engaging with its peers, policy and business communities as well as with public stakeholders. At the organisational and institutional level, technology diffusion occurs in a number ways and may have a number of characteristics. New Zealand universities are supporting the government’s priority to generate more high technology indus- tries through their commercial arms. Sophie Howard of VicLink reflected on her role at the interface between the university cul- ture and the external business world (p. 33). Commercialisation offices have a particular problem in finding enough people with the right skills and are now concentrating on training and devel- opment of commercialisation managers. She also highlighted the conflicting incentives that university staff have as they balance their teaching, publishing, and outreach activities. This paper supports the notion that the university has a wide role to play in addition to scientific research in improving human capital relating to improving New Zealand’s productivity. She also hints at the effectiveness of ‘modelling by doing’ in fostering on-the-job training of commercialisation managers. Magritek, New Zealand’s Magnetic Resonance Imaging (MRI) Company was started in 2004 as a spin-out from Victoria and Massey Universities. DrAndrew Coy, CEO of the company, stressed that the intellectual property and research underpinning Magritek products comes from two decades of world-leading Magnetic Resonance research carried out by Prof Sir Paul Cal- laghan and his team (abstract, p. 42). Dan McElrea, chief executive officer of Puku Ltd, presented the characteristics and innovative ideas, but not necessarily new ideas, of a small specialist fastener company which has invested heavily in intellectual property (IP) with a particular emphasis on helically based connections (p. 42). Their strategy is focused on developing and licensing promising ideas. Puku Ltd benefited from TechNZ grants, a NZ Trade and Enterprise travel grant (now discontinued), and networking opportunities from the TechNZ Innovation Forum. An example of creative people working together using a pathway from scientific innovation to end-users who adopt the ‘new ideas’, was presented by Dr Michael Uddstrom of the National Institute of Water and Atmospheric Research (p. 37). He shows how prediction of weather-related hazards is translated into a form readily assimilated by enterprises, which have weather derived risk that contributes to efficiencies in their operations. He notes that an innovation system is only as good as the quality and quantity of research and technology that un- derpins it and that funding alone is not enough. Investors must be willing to sustain effort over a long period especially if the innovation is likely to be disruptive to existing technologies or capabilities. Dr Linda Sissons, chief executive of Wellington Institute of Technology, led us through the strong role that the Institutes of Technology and Polytechnics, especially the Metro group, are carving out for themselves in education, research and technol- ogy (p. 15). This involves a close connectedness with large and small companies and an emphasis on training and technology transfer. Associate Professor Rod Dunbar, University of Auckland, similarly emphasised the role of universities in New Zealand (abstract, p. 18). These universities play an important training role and are a source of future technology and technology-savvy business managers able to operate at the level needed for large, sophisticated export industries.They also produce well-educated innovators and individuals who know about a range of markets, speak other languages, and understand the culture of the markets into which we aspire to export. It is important to protect diversity in the academic community and to accept that an innovative country is built on more than scientists and engineers. The low participation of Mäori in the science and technical areas and resulting lost opportunities was highlighted by Garth Harmsworth (p. 45). New Zealand is largely missing out on the cultural diversity and the differing world view that Mäori bring to the New Zealand economy. Member of Parliament David Shearer (talk not published here) reflected on some of the exciting new companies he has visited recently that epitomise some really good ideas approached using offshore partnering. He believes that added- value enterprises, especially clean, green, clever, low-carbon, weightless, export-driven companies, will be the future where Government environmental and economic policies are driven together. Finally, Murray Bain, the newly appointed chief executive of the Ministy of Science and Innovation summed up by defin- ing ‘innovation’as converting knowledge and competence into value, a definition that is inclusive of environmental, social and health research. He drew on themes coming for the pres- entations to make several points (p. 52). Both innovation and science are processes – journeys that need to work seamlessly well together right across the chain. There is a need for balance, whether the balance relates to primary industries versus high- tech or applied versus not-yet-applied research. There is room and a need in the innovation chain for a range of ‘excellent’, differently-skilled people. Political journalist and analyst Colin James summed up by reflecting on the complexities around the subject of government support for science (p. 53). We have to acknowledge science’s potential for good and evil. Scientists need to be advocates for excellent science that is applied for human wellbeing. He was critical of the Treasury’s narrow approach to the subject of innovation in the economy. He concluded that New Zealand is going to have to make the same kind of investment as its comparator countries, foster ways of increasing the amount of interconnectedness among all players in the economy, and not
  • 5. New Zealand Science Review Vol 68 (1) 2011 lose sight of the fact that climate change impacts will create a lot of uncertainty around any attempt we make to ‘pick winners’. Reflections on outcomes It was inevitable that discussion threads and observations did not always link coherently. The main point we can distil from the conference is that different players use the word ‘innovation’ with different shade of meaning. For some presenters, ‘innova- tion’means thinking creatively to employ existing technologies, e.g. to improve products or services. Others use the word to mean ‘invention’that creates new possibilities, ideas, products and services and which may overtake existing technology. For ‘innovation’ to be a useful word that contributes to clear com- munication it must be defined whenever it is used. We did not locate a presenter who could make an innovation system-wide analysis. Such a presentation would have been very useful in that it would have: • detailed what is meant by ‘innovation’ and ‘innovation system’, • defined the elements of a New Zealand innovation system, • analysed the strengths, weaknesses and relative alignment of each part of New Zealand’s innovation system, especially the education system, and • in the research sector, would have evaluated the relative value the Government places on all parts of the innovation system (not only those parts that are directly related to the economy) and defined how they will be thought about. The Organisation of Economic Co-operation and Develop- ment (OECD 2007) report on New Zealand’s innovation system contains an uneven evaluation of parts of the system. We note that the OECD sees innovation purely in economic terms and has no framework for evaluating outcomes in environmental, health, or social sciences other than as means of commercial exploitation of resources. Despite mentioning shortcomings in educational achievement and a mismatch between fields of higher educational attainment and demand for labour, the section on the Ministry of Education dealt only with the tertiary sector, did not appear to contain much evaluative material, and drew few conclusions relating to education in the overall assessment. Yet, the Building and Construction Sector Productivity Task- force(Anon. 2009) identified leadership and training problems at all levels in the construction industry that are impacting the efficient use of labour. Despite the increased attention being given to entrepre- neurial activity, and training for international business success (OECD 2007, Boven et al. 2010), there is mounting evidence that improvements in these activities might not have the desired result if effectiveness in the education sector as a whole is not also addressed. There is an obvious role for the new Ministry for Science and Innovation to create a framework for communicating the value and the level of investment that should go into all parts of the research, science, and technology investment, especially those that are truly public good in nature, i.e. related to sustain- able use of natural resources and social wellbeing. There have been several shifts in definition of ‘public good’ over the last 15 years, most of them not very transparent. The New Zealand Association of Scientists judges this type of communication to be a very important part of the overall ‘innovation system’, in that it transmits knowledge to the potential workforce about the principles by which Governments make their decisions.Armed with information on how resources are to be assigned, students can make good decisions and align their choices with what is deemed to be needed from the education system and for the economy and society. Clearly, scientific research is only a part of the whole ca- pacity of any society to ‘innovate’ in the broadest sense of the word. We need to compensate, through education and training at all levels, for our cultural weaknesses that handicap our abil- ity to convert inventiveness into productivity and sustainability gains. We need to increase savings, improve capital formation, and devise ways of coordinating strategies across the whole innovation system to achieve the Government’s national goals. We look forward to engaging with the staff of the new Ministry of Science and Innovation in defining their role and how it might relate to the larger national innovation system. We also look forward to engaging with policy analysts in all parts of the science and research system to help to identify any unintended consequences of policy interventions. Janet Bradford-Grieve and Allen Petrey for NZAS Council References Anon. 2009. Report of the Building and Construction Sector Productivity Taskforce. Department of Building and Housing. 36 p. http://www.dbh.govt.nz/UserFiles/File/Building/sector-forum/ Sector-Productivity-Taskforce-Report.pdf Boven, R.; Bidois, D.; Harland, C. 2010. A goal is not a strategy: Focussing efforts to improve New Zealand’s prosperity. New Zealand Institute, Discussion paper 2010/1, 62 p. http://www. nzinstitute.org/Images/uploads/A_goal_is_not_a_strategy_- _Full_report.pdf Kidd, N. 2008. Putting productivity first. New Zealand Treasury ProductivityPaper08/01.http://www.treasury.govt.nz/publications/ research-policy/tprp/08-01/tprp08-01.pdf OECD 2007. OECD Reviews of Innovation Policy, New Zealand. OECD, Paris. 240 p. http://browse.oecdbookshop.org/oecd/pdfs/ browseit/9207071E.pdf
  • 6. New Zealand Science Review Vol 68 (1) 2011 The Hon Dr Wayne Mapp, other members of the House, Profes- sor Sir Peter Gluckman, distinguished speakers and conference attendees. Welcome to this joint New Zealand Association of Scientists and Institute of Policy Studies conference. The conference marks the re-setting of government funding for research, science and technology under the banner of ‘science and innovation’with a merging of Ministry of Research, Science and Technology and the Foundation for Research, Science and Technology into a new Ministry. The conference aims to tease out what we mean by ‘science and innovation’, illuminate and analyse the basis of current government policy and the changes taking place, New Zealand innovation practice and the role that various institutions play in New Zealand’s ‘innovation ecosystem’, and ideas for potential future developments. With the constraint of a one-day programme, some important parts of the innovation system are not being presented but may emerge in discussion. There is little direct researcher input on the obvious role of basic research in innovation. Instead we have tried to focus on policy and practical implementation issues and perspectives. Despite our best efforts, a representative of the New Zealand Business or the Manufacturers and Exporters Association was not available. A widely recognised concern is the low level of business involvement in the ‘innovation system.’NZAS had campaigned for 20 years to get recognition of the need for a business RD tax system to match Australia’s. Of little direct benefit to sci- entists, the primary reason for our support was to get potential growth businesses interested in, and enabled to find, the in- novation solutions that suited them. We are saddened that this has come and gone and been replaced by what seems to be a more bureaucratic grant system with a narrow economic focus and resources that have been redirected from some important areas of science. We hope to find out that that this is too black an interpretation of the current situation. Thanks to an interested and involved government, there is much debate in the news media and in specialist reports on what might be wrong with the New Zealand economy because labour productivity stubbornly fails to improve. In addition to issues in the New Zealand innovation system and a need for improved rigour in the strategic development process, the low degree of capital intensity and low business spend on RD in New Zealand are seen as major areas requiring improvement. The fundamental importance of New Zealand’s intangible capital, its people, the quality of institutions in society and es- pecially our educational system, are key issues. Of particular importance is the development of practical skills and the crea- tion, application and management of new technology in a vastly upskilled private sector. We would also like to sound a note of caution about the direct relevance of overseas innovation models. A paper by Alan Hughes (2007), University of Cambridge, suggests that a narrow interpretation of US economic performance, often used in innovation policy, is doomed to fail. This paper concludes that ‘…the crafting of innovation policy in the context of any specific national innovation system requires a careful considera- tion of the structural features of that context and the particular opportunities and challenges facing policy practitioners in it. An imperfect interpretation of the experience of one country’s system is unlikely to be an appropriate guide to innovation system failure or success elsewhere.’ Overall, there does not appear to be a single clear view, underpinned by New Zealand evidence, that is a reliable guide to improving New Zealand’s policy framework for encouraging better performance from the ‘science and innovation ecosystem’. In fact, the Association contends that the science and research sector will be placed at risk if too narrow a focus is placed on foreseeable economic benefit as the major requirement from research scientists in the innovation system. In this conference we hope to throw more light on the sci- ence and innovation part of this subject, identify some of the key issues and problems with existing arrangements and consider how the ‘innovation system’ might be improved. We also hope that the results of the conference will serve as a sort of ‘briefing’ on key issues for the new Ministry of Science and Innovation. I’ll now, with great pleasure, hand over to Professor Jonathan Boston, Director of the Institute of Policy Studies our chair for today’s proceedings. Reference Hughes, A. 2007. Innovation policy as cargo cult: Myth and reality in knowledge-led productivity growth. ITEC Working Paper Series 07-26. [CBR (University of Cambridge) – ITEC (Doshisha University) Joint Papers] Re-setting science and innovation for the next 20 years Welcome and introduction James Renwick President, New Zealand Association of Scientists
  • 7. New Zealand Science Review Vol 68 (1) 2011 I have been asked to talk about the Government’s vision for science and innovation over the next 20 years. Our vision is a simple one. It is that science and innova- tion is at the heart of our economy. They will be the means by which we grow and develop the economic and social future of New Zealand. As a small country, we are not big enough to dominate markets. Nor are we big enough to generate growth through our internal economy. We cannot build a competitive edge through low wages or degrading our environment. We have to be smart. Symbolic of our priorities is the new Ministry of Science and Innovation. You may ask, ‘What’s in a name? Why is that important?’ It is important because it signals a new era and a new at- titude. Science is not just for very clever people conducting advanced experiments at the frontiers of science. Of course this is important.All great discoveries ultimately come from frontier research. However, science also has to connect to the economy, not just for the future but also in the present. Science is the wellspring of innovation. It is the effective application of that science which will generate the exports and jobs that we want. The conjunction of science and innovation is central to our strategy.  We are not the only country to have identified this. The Deloitte 2010 report on global manufacturing competitiveness ranks ‘talent-driven innovation’ as by far the most significant factor in global competitiveness. Other countries have gone further. The transformation over the last three decades of the economies of countries like Finland, Denmark, and Singapore has been down to a long-term strategy of ongoing investment into science and innovation. These coun- tries have built multiple streams to their economies. Closer to home we have had the example of Queensland. Queensland is not just the Sunshine State. Over the last 12 years, they have undergone a major transformation of their regional economy. The results are compelling. In the 1990s, the per capita income of Queensland was very similar to that of New Zealand – they were slightly ahead. Now, they are over 30% ahead. Why is this? It is not just because they have minerals – Queensland has always had minerals. In fact, the difference can be summed up in two words – Smart State. This has been a comprehensive and broad strategy over time to diversify Queensland’s economy from ‘rocks and crops’(and tourists) to a far broader economy encompassing research activities and a whole range of local and international high-tech industries. New Zealand’s National-led Government has embarked on its own broad-reaching strategy to improve the economy. Com- plicating this effort is the biggest global financial crisis since the Great Depression, and the consequent strain on government and business finances around the world. Science and innovation are not the only focus. They are part of a larger strategy that the Government has implemented to drive New Zealand forward. We have made huge progress in terms of more efficient government. The last decade saw taxpayers’money squandered at a time when we should have been building for the future. Government spending increased by $22 billion in just eight years. It is hard to see what we got for it. Our highest priority as the incoming Government was to stem a deficit that threatened to blow out of control. It was not easy, but we have achieved this. We are prioritising government spending on what really matters. Regulatory reform has also got under way, from stream- lining the Resource Management Act through to holding re- gional and local bureaucracies to account. We have also rolled out an infrastructure programme across a whole host of areas from broadband to roads to public transport. Tax reform was a focus for this year. Not only has it made a substantial difference to people’s pockets, it also signals our clear intention that savings and investment should be rewarded over consumption.  All these initiatives are important. Taken together, they signal a marked shift in the direction that we are taking New Zealand. Re-setting science and innovation for the next 20 years Opening Address Wayne Mapp* Parliamentary Buildings, Wellington Hon Dr Wayne Mapp is Minister of Science, Research and Technology and Associate Minister of both Economic Development and Tertiary Education. He is also Minister of Defence. He was first elected to Parliament in 1996. He holds a LLB (Hons) from Auckland University, a LLM from the University of Toronto, and a PhD in international law from the University of Cambridge. Dr Mapp’s career has involved both private legal practice and as Associate Professor of Commercial Law (international trade law, taxation constitutional issues) at Auckland University, 1994–96. * Correspondence: w.mapp@ministers.govt.nz
  • 8. New Zealand Science Review Vol 68 (1) 2011 Science and innovation initiatives We have placed science front and centre. We have backed this by actions. In Budget 2009, we increased funding for fundamental science at a time when just about no other funding increases occurred. We initiated the CRI reforms, simplified the system, established overall science priorities, and introduced the Prime Minister’s Science Prizes. We appointed Sir Peter Gluckman, who you will hear from later, as the Prime Minister’s Chief Science Advisor. Sir Peter has been an inspiration. He has challenged us and stretched us. He has been a hugely effective conduit between science, government, and the public. In 2010 we went even further. Science and innovation re- ceived another round of major new funding – one of the few areas that did. The emphasis in 2010 was support for business innovation. This included the new Technology Development Grant, aimed at research-intensive firms. The first of these grants will be announced soon. Yesterday, I announced the initial group of research and development institutions that businesses will be able to engage with the new Technology Transfer Vouchers. This is aimed at smaller businesses that do not have their own research and development capacity. They will be able to work with our scientists and engineers to get the solutions they need to grow their businesses. When you consider the overall economic and fiscal situation, it shows just how much importance we have placed on science and innovation. Already, we are seeing results. Scientists and professionals have been enthused by the changes. The CRIs are being let off the leash to concentrate on their science and how it benefits the country, rather than the short-term focus on funding rounds and annual statements. In business, we have signalled that we want innovation- fuelled progress. We are not just supporting ideas, we are sup- porting solutions. This support is carefully targeted towards market-driven growth. The media have responded to the new mood. Every day, there are articles about new inventions and successful innovations. The young scientist who earlier this year won the inaugural Prime Minister’s Prize for Young Scientists is now fronting a TV show. Overall, there is a sense of excitement and enthusiasm. Yet we know we cannot rest on our laurels. In a highly competitive world, others are catching up fast. One of our standout economic performers has been the dairy industry. This has harnessed science in all areas of animal and plant breeding, productivity enhancements, processing innova- tion and product development. There is also a major science effort around environmental management. However, we are already at a point of declining efficiency gains. Over the last decade, our milk production efficiency has scarcely moved. Our major competitors have closed the gap. This does not mean that the dairy industry is facing decline. Far from it. The emphasis is already moving from production efficiencies to higher-value products. It does illustrate that we need to not only capitalise on existing sectors, but build new ones. So where should our next focus be? I believe there are three main areas we should concentrate on. These are: improving our business innovation, strengthening the relationship between science and economic opportunity, and growing our science capability. Business innovation Research and experience shows that there is a ‘tipping point’ for businesses, where they start to see major benefits from the RD investment. For many of our high-tech businesses, this is already occurring. The proof of this is in the Technology Investment Network annual report, the TIN 100, which looks at our top high-tech companies. This notes that those companies that had established a good global position continued to grow strongly.An example is Fisher Paykel Healthcare, which increased revenue by over 20% last year. Overall, the TIN 100 companies invest over 5% of gross revenue into RD. Even more significant is the next group of companies, ranked from 100 to 200 in the TIN 100 list. Their average RD invest- ment is around 20%. These are not just start-ups. The majority of these are established companies that have crossed the ‘valley of death’ and are positioned for serious growth.  Our current business-facing schemes are deliberately tar- geted at encouraging co-investment. We will see companies like those in the TIN 100 grow even more strongly as the global economy recovers. Their RD investment will keep them at the forefront. We will keep supporting commercial innovation, and ex- pand our business-facing schemes. We expect that demand will outstrip supply for vouchers, for project grants, and for the Technology Development Grants.  The next step in the commercialisation drive will be around clusters and centres of excellence. Too often, we end up with a maze of small and unco-ordinated efforts. Current initiatives such as the Food Innovation Network and the titanium industry cluster are a template for increased efforts and support. Strengthening the relationship between science and business opportunity New Zealand produces a lot more ideas than we currently have businesses for. Ideas on their own are worth nothing. As we build our innovation ecosystem, the pressure to commercialise intellectual property will grow more acute. This process is already under way. We will shortly be releasing the request for proposal for the new commercial- isation centres. These will build on commercialisation activity already being undertaken by universities and Crown research institutes (CRIs). The intention is to allow New Zealand com- panies far greater access to the range of scientific knowledge and capability. We also need to look beyond New Zealand. Take a company like Lanzatech, inAuckland. Their innova- tion is in custom microbes that clean the waste gas streams of large industrial processes, such as steel mills. The market for this innovation in New Zealand is just about non-existent. They need
  • 9. New Zealand Science Review Vol 68 (1) 2011 to work with global steel producers. In fact, they have recently signed a deal with a major Chinese steel company that will let them take their process to the next level. This is an example of harnessing our science in the global marketplace. We want the world to look on New Zealand as both 100% Pure and 100% Innovative. Growing our science capability It goes without saying that if we are prioritising innovation through science, then we need plenty of scientists to feed the innovation pipeline. Without a constant flow of energised and excited people we will not build the diverse economy we need. Attracting, empowering, and retaining talent must be the foundation on which our innovation future is built. This means investing more in our young scientists. As I go around the country, I note that more and more young scientists are seeing the future not only in terms of their specific research focus, but also in ways that they can apply their talents outside the laboratory. The future will see a far higher number of scientists sharing their career development across the public and private sectors. They may start in a university, then migrate out into business before coming back into an institution to either return to focus again on more pure research, or teach and inspire others. Much of our science expertise is in the CRIs. We have there- fore empowered CRIs to take a far greater role in determining their major science priorities and managing their resources in consultation with their stakeholders. In return, they need to demonstrate to their shareholders and stakeholders just what they are doing for New Zealand, why it is important, and how they are getting results that matter. The universities obviously play a vital role. The Centres of Research Excellence have been very successful. The Per- formance Based Research Fund, the Marsden Fund, and the Health Research Council are integral to supporting science-led discovery. We also need to develop and expand the role of institutes of technology and polytechnics and other leading vocational institutions on the development side of the RD equation. The Rutherford Scholarships were introduced to help ad- dress the early/mid-career gap that many scientists face. They are part of the more targeted support approach that will ensure that we keep our talented people encouraged and engaged at critical times in their careers. Transforming our economy The three objectives mentioned above have a purpose. Over the next 20 years we want to see our economy trans- formed. I know you have heard this rhetoric before from vari- ous politicians, business leaders and committees over the last 25 years. And there is no doubt our country has made major changes. We opened up the economy, we became more competitive and market-focused. We have built new skills. We did have fur- ther to come than our competitor nations. They did not require Reserve Bank approval to subscribe to an overseas magazine; they did not have strict import licensing resulting in televisions being assembled at three times the world price; and they did not have compulsory unionism.  These things are now all in the past. However, our competi- tors did make changes in the last 15 years which we failed to do. They built their advanced high-tech sectors. For example, in 1990 Denmark exported about the same value of agricultural products as it did high- and medium- technology manufactured products. By 2009, their agricultural exports had increased in value by 100%. In contrast, their ex- ports of high- and medium-value manufacturing had increased by nearly 400%. Their economy had fundamentally changed.  Countries like Denmark, Finland, Singapore, and Queens- land have built world-class science and innovation systems in the last 15 years. We have not done so.  New Zealand will always have a strong agricultural sector and we will always be attractive to tourists. We need to add to it, just as Queensland has added to ‘rocks and crops’. The investment in science and innovation will enable New Zealand to build a ‘third pillar’. It will take the TIN 100 group of companies with their focus on high-tech manufacturing and service from their current $5 billion in exports, to double that. Currently, our wider high-tech manufacturing sector con- tributes about 10% of New Zealand’s export revenue. We need to lift that to 25% over the next 20 years. That would really be an economic transformation. It offers our best chance to move on the OECD ladder. That is our also best chance of ensuring that more of our brightest and most talented stay in our country. They will not just see it as a way station, a place to be educated, to leave, and to visit from time to time to see relatives and enjoy the beach. Conclusion The brief you gave me was around the Government’s vision for science and innovation. Today I have given you some of my ideas as to how I see that vision developing. The Government has many competing demands on its limited resources. Yet in spite of this, the Government has delivered on its science and innovation programme. The response to that has been very positive. It augurs well for the future. Right now is an incredibly exciting time for science and innovation in New Zealand. The next few years will more than fulfil the anticipation and expectation that we all share.
  • 10. New Zealand Science Review Vol 68 (1) 2011 I’m going to be talking, essentially, about two things: first that innovation is profoundly important for New Zealand’s economic performance and growth and, secondly, that to gain greater economic dividends from science, research and innovation, we need to get much more fusion and synergy between our scientists and firms. I want to set the scene by first talking about New Zealand’s relative economic performance since the 1970s (Figure 1). In 2009, New Zealand’s gross domestic product per person stood around 15% below the average for the relatively rich, developed societies in the Organisation for Economic Co-opera- tion and Development (OECD), which put us in 22nd place in the then-30-member OECD: that’s a significant relative decline from being around 15% above the average of the smaller, and richer, OECD during the early 1970s, when we ranked eighth out of 24 member countries. New Zealand’s per capita income gap withAustralia emerged during the mid 1970s and has generally widened since – our GDPper capita is now about 26% less than Australia’s (Statistics New Zealand 2010a). To close the income gap with the richer OECD countries, our economy would have to grow faster than theirs for a long period.As far as closing the gap withAustralia, New Zealand’s average annual growth in GDPper capita would need to outpace Australia’s by about two per cent a year over 15 years. That’s quite a challenge. What will drive this economic growth? In simple terms there are two things that drive economic growth. Re-setting science and innovation for the next 20 years Role of innovation in economic growth in a New Zealand context Struan Little* New Zealand Treasury, PO Box 3724, Wellington 6140 Struan Little is Deputy Secretary, Dynamic Economy at the New Zealand Treasury, and is respon- sible for the co-ordination of policy advice on productivity and growth, as well as a range of sectoral responsibilities. He has a strong interest in economic strategy and issues arising from the global financial crisis. At the forefront of his current work programme is ensuring that New Zealand achieves a sustained higher rate of productivity growth as we come out of the recession. Struan has worked in a range of economic policy roles in the public and private sector. Since joining the Treasury in 1987 he has held various senior positions within Treasury including Manager, Macro- economic Policy, head of the Treasury’s Strategy Unit, Assistant Secretary responsible for interna- tional, infrastructure and environmental issues and Acting Deputy Secretary, Economic Performance. Between 1993 and 1995, Struan was seconded from the Treasury to the World Bank, where he held an Advisor position at New Zealand’s shared constituency office. * Correspondence: struan.little @treasury.govt.nz Figure 1.  Real GDP per capita for Australia, New Zealand and OECD. At 2000 PPP (purchasing power parity) prices, 1972–2009. Base: OECD 2001(= 100). Source: Statistics New Zealand 2010a, Australian Bureau of Statistics 2010, and OECD Factbook 2010.
  • 11. New Zealand Science Review Vol 68 (1) 2011 There’s working harder: New Zealand is already quite good at that. We work more hours per person than the OECD average and countries like Australia and the US. There’s also working smarter: getting more output from each hour worked. Over the past 200 years, income per head in the developed world grew about 19 times. The economic evidence suggests that most, if not all, of this income growth came from improvements in productivity rather than increases in hours worked per person. New Zealand has been poor at this.An hour worked in New Zealand produces about 30% less value-added than an hour worked inAustralia – despite the fact that the rate of productivity growth across the other side of the Tasman has been slowing in recent years (OECD 2010a). So, broadly, to lift economic growth New Zealand needs to work smarter: to get more output from each hour worked. On its own, just working harder isn’t going to be enough. How can we work smarter? We know from analysis done by the OECD that between 25% and 45% of productivity gains come from innovation. Most of the huge rise in living standards in the developed world over the last two centuries has come about through technological breakthroughs based on increased knowledge. So it’s crucial that we deepen our understanding of how innovation happens and then get much, much better at it so that the economy can deliver the higher living standards we’re aiming for. What drives innovation? Science is one critical input, but the story of how innovations arise is much more complex than putting resources into basic research to get new technologies downstream. Innovation and working smarter is all about getting new ideas flowing into the creation of new products, new and improved processes and technologies, and softer changes like new business models or novel methods of marketing and distribution. Most innovation takes place in firms, and often this is through new ideas being generated on the shop floor, among users of systems, and in response to end-users. Firms need to innovate to compete and grow, and in the process come up with new products and processes and improvements in productive efficiency. How good are we at innovation? Statistics New Zealand surveys suggest that New Zealand firms have levels of product, operational and marketing inno- vation that compare reasonably well with other small OECD countries (Statistics New Zealand 2008).Another indicator, the IBM–University of Auckland’s Innovation Index, found that New Zealand’s rate of innovative activity rose by 13% between 1998 and 2000 but then remained virtually flat for the next seven years before falling sharply in 2008. In contrast, the same index forAustralia rose more than 25% in the same period (IBM New Zealand and University of Auckland Business School 2010). These figures indicate that there’s plenty of potential for lifting our innovation performance. One input to firms’innovation is research and development (RD), but they are not the same thing (Figure 2). While busi- ness RD is a vital part, firms that innovate do not necessarily conduct RD – only 8% of all businesses in New Zealand per- form RD compared with much higher rates, 46%, performing wider innovation, and this disparity exists in all sizes of firms (Statistics New Zealand 2010b). While firms are at the centre of the innovation process, government has a big role to play. The most important and most effective role for government is improving the policy settings that have a pervasive impact on firms’ ability to perform: by maintaining a stable macro environment, cutting back on poor regulation, by boosting competition, addressing the taxes that are the most negative for growth, investing in infrastructure, and making the public sector more efficient. That provides us with the base, for ensuring the systems and incentives are in place that allow innovation to occur. Secondly, RD is an important part of the innovation system – so government has to make the most of its public investment in science to yield benefits to New Zealand. This is especially so now, when fiscal conditions are extremely tight.To get economic impact we particularly need the output from the science system to be applied in the economy by firms – the wider the better. In saying this, I recognise that science also contributes to other important outcomes for New Zealand, including environmental, health and social. That said, being from Treasury, I tend to use an economic lens. Getting economic impact from our public investment in science There’s no doubt that New Zealand produces very good science, and leads the world in some areas. We have a strong research base – for example, we are placed ninth out of 23 OECD countries in terms of the number of science and engineering articles published per one million inhabitants (OECD 2006). We also rank sixth out of 28 OECD countries for the number of RD personnel per 1000 people employed (OECD 2010b). Figure 2.  Research development (last financial year) and innovation activity (last two financial years), by business size, to August 2009. Source: Statistics New Zealand 2010b.
  • 12. New Zealand Science Review Vol 68 (1) 201110 However, when it comes to converting this knowledge into commercial opportunities and higher value, we do not do as well; this was confirmed by the OECD which has highlighted that technology diffusion and adoption is a weakness for New Zealand (OECD 2007). Getting science connected with business is the key, so science can give business a hand-up to solve problems entre- preneurs are grappling with and to realise opportunities they have glimpsed. As important – or even more important – out of this synergy can come unanticipated developments for novel products or processes, opening up completely new products, applications and markets. A case in point is the development of the electric fence. It was Bill Gallagher who first developed the first electric fence and supplied it to New Zealand farmers. These fences were battery-powered and did a reasonable job, but their useful- ness was limited because, if grass touched the wire, the voltage would drop and the animals could just walk through. What led to the electric fence industry taking off was the invention of unshortable electric fence technology by a public sector sci- entist working at Ruakura. The new reliable fences, powered from the mains supply, utilised a high current in short bursts which were safe for both livestock and people. Since then, Gallagher’s commercialisation of the improved technology has revolutionised farm grazing around the globe, and unforeseen diverse applications have arisen – from corralling big-game animals to electrical and alarmed security fences to keep people in or intruders out. Of course, impacts can also be unforeseen. A rich source of unforeseen applications arises when researchers and users get together and share their ideas and perspectives. An example is the ‘camera pill’ – a disposable pill-sized camera that passes straight through the digestive tract, con- tinuously broadcasting pictures of the intestine to an external receiver. This was invented by a guided-missile designer in Israel who got the idea after talking with a gastroenterologist who was suffering from undiagnosed stomach pain. This story also illustrates the benefits of being connected internationally. The concept of a camera pill was actually being developed in- dependently in Israel and Britain. These two groups of scientists later got together and successfully collaborated to develop the technology. So getting users and scientists to talk to each other, to un- derstand each other’s perspectives and feed off each other’s ideas will be an important part of getting our innovation system humming. While this is already happening to some extent, we think there is room for improvement. Survey results show that ‘existing staff’ and ‘customers’ were the most common sources of information that businesses used for the purposes of innovation (Figure 3). Less than 10% of businesses rated either ‘universities or polytechnics’or ‘Crown research institutes (CRIs), other research institutes, or research associations’ as important sources of information. The picture is much more varied at the industry level. In the education and training industry, 22% of businesses rated ‘universities or polytechnics’ as important sources of information of innovation, but only 1% in the retail trade in- dustry did so. In the primary sector, 23% of businesses in the agriculture, forestry, and fishing industry rated ‘CRIs, other research insti- tutes, or research associations’ as important sources (Statistics New Zealand, 2010). However, what strikes me most is the potential for a much greater flow of information between our public research organi- sations and firms – and I can’t help thinking what great ideas we could be missing out on. I hope that’s a thought you’ll take away too. Recent changes in the science sector There have been wide-ranging changes in the science sector in the past year aimed at supporting economic growth. These include: • Early next year will see the amalgamation of the Ministry of Research, Science Technology and the Foundation for Research, Science and Technology into the new Ministry of Science and Innovation (MSI). This will bring policy making and funding together, remove some fragmentation in the system, and give the sector a single and stronger lead agency. F i g u r e 3 .   S o u r c e s o f information for innovating businesses (last two financial years at August 2007 and 2009). Source: Statistics New Zealand 2010b.
  • 13. New Zealand Science Review Vol 68 (1) 2011 11 • The Taskforce set up a year ago to examine how the CRIs can best deliver on national priorities and contribute to eco- nomic growth, has reported. The process of implementing its recommendations is under way. • Business RD has been growing in recent years from a low base. Although our business RD is relatively low by international standards this can be largely explained by our industry structures, size of firms, and distance to market. Given that a large body of empirical evidence suggests that business RD has a significant impact on economic growth, encouraging it is important. Budget 2010 made provision for four initiatives to boost business RD and improve technology transfer and commercialisation from publicly funded research to firms (technology development grants, technology transfer vouchers, the national network of commercialisation centres initiative, and technology transfer initiatives). • In the tertiary education sector there have been changes to the Performance-Based Research Fund evaluation proc- ess to ensure that excellence in applied and commercial research is properly rewarded. Where do we go from here? We need to ensure we get the best out of these substantial changes in the science system. The new MSI will need to live up to its name and ensure that innovation is as central as science policy. It will probably mean some shift of focus and funding from ‘blue skies’and basic research to applied research of relevance to firms. It will need to apply energy and drive to getting a step-change in collaboration and knowledge transfer both within the science sector and between the science sector and firms. New Zealand only produces a very small percentage of global knowledge, so we have to be smart technology adopters. To do this we need to be deeply connected with the global in- novation system. We already have many good linkages with international science, but I think we can do even more. We need our public research organisations not only to be excellent at keeping abreast of leading-edge science and emerging technol- ogy, but also to excel at adapting it for New Zealand settings and turning it into commercial opportunities for our firms. We need to ensure that the CRI reforms help to maximise the economic benefit from CRI research, and to get this we need New Zealand firms to be able to turn these findings into profits. We need them to forge partnerships with the private sector to help CRIs plan their research more in line with the needs of industry, and give the private sector an early insight into potential investment opportunities. It’s vital too that CRIs put a much greater emphasis on transferring the knowledge and technologies they generate to New Zealand businesses. The new arrangements for funding and monitoring CRIs will help cement this in. The new business RD incentives and commercialisa- tion initiatives are under way. We need to ensure that they are evaluated properly and learn from our experience of them in practice.  We want to facilitate Commercialisation Centres to build up scale, expertise, and networks so that they become excellent at commercialising bright ideas.  It’s Treasury’s view that further incentives for business RD are worth consider- ing, but these will need to be within the bounds of our fiscal constraints. We must also build up a stronger focus, not just on com- mercialisation and technology push, but knowledge transfer more generally. To capitalise on our innovation potential, we have to ensure that the flow of ideas is genuinely two-way, not just from public research organisations to firms but from firms to scientists, scientists to scientists and, where possible, from firms to firms.  Building stronger networks, with highly mobile researchers with strong links to industry, will be part of this, as well as accessing and adapting the best ideas from abroad. Conclusion I want to leave you with the message that New Zealand’s future economic performance will depend on innovation. Research is one important input to this, but ultimately it is firms that take up and apply it for economic benefit for New Zealand. To get the best out of our science system, the flow of ideas between the science system and firms needs to be strong and genuinely two-way. References Australian Bureau of Statistics 2010. IBM New Zealand; University of Auckland Business School 2010. Innovation Index of New Zealand 2010. IBM New Zealand and University of Auckland Business School, University of Auckland. OECD 2006. Science, Technology and Industry Outlook 2006. Paris, OECD, table 38. OECD 2007. OECD Reviews of Innovation Policy – New Zealand. Paris, OECD. OECD 2010a. Estimates of labour productivity levels 2009. Paris, OECD Database. OECD 2010b. Main Science and Technology Indicators. Paris, OECD. Vol 2010/1, table 10. Statistics New Zealand 2008. Statistics New Zealand 2010a. Comparing the Income Gap between Australia and New Zealand: A 2025 Taskforce analytical report 2010 update. Wellington, Statistics New Zealand, September 2010. Statistics New Zealand 2010b. Innovation in New Zealand: 2009. Wellington, Statistics New Zealand, June 2010.
  • 14. New Zealand Science Review Vol 68 (1) 201112 Introduction I would like to talk to you about two cultures within the field of RD – on the one hand, the culture of scientific research, and on the other, the culture of technological development for industry. These two activities and their associated cultures are not the same, nor indeed are their underlying purposes. This disparity of purpose flows through into the motivations which drive those who engage in each activity, and should be reflected in the excellence criteria used to assess performance. In New Zealand we have for many years confused these two activities, their purposes, their cultures, and indeed our systems of recogni- tion for achievement in them. Much of this confusion has come from within the research community itself, stemming in some cases from unfamiliarity with the other field, in others from self interested promotion of one activity at the expense of the other, and in the worst cases intellectual snobbery and condescension reinforced by the review of peers unevenly selected from one culture or the other. Unless we are able to address this confusion here in New Zealand we will continue to have an innovation system which under-performs and an economy which does not meet our expectations. The two cultures I make no apology for the anecdotal character of my remarks. In my own career I have moved back and forth constantly between these two worlds – one perhaps best typified by the ethos and culture of the Marsden Fund, and the other the cus- tomer-focused and applied research world of the independent Research Associations. The culture of scientific research I will not labour a description of the culture of scientific dis- covery. I was recently privileged to attend the 350th Convoca- tion of the Royal Society (of London). This was a celebration of the intellectual contributions of some of the most important scientists ever to have lived and recognition of the contribution which collective international effort has made to our understand- ing of the universe. The culture underlying this achievement is not only internationally consistent, but it is also altruistic and inspirational in its ambition. Its ambition is to progress human Re-setting science and innovation for the next 20 years Science, innovation and business G.A. Carnaby* Royal Society of NewZealand, PO Box 598, Wellington 6140 *Correspondence: garth.carnaby@royalsociety.org.nz knowledge – arguably one of the most difficult and important tasks we can set ourselves. Progress is made using the scien- tific method first refined by the Royal Society’s membership in London over 300 years ago. It involves the proposing of hypotheses and theoretical models based on observations and analysis, the testing of these propositions with experiments, and, when hypotheses are disproved, proposing new ones, and so on. Progress is recorded through open publication, and recognition is based on priority in publication dates, the impact factor of journals which agree to publish the research after peer review, and how frequently publications are cited by subsequent researchers. Whilst these widely used metrics are often criticised as favouring one discipline over another, or as being insensitive to the separately judged impacts of individual discoveries, any international peer review panel set up to assess science achievement will place at least some reliance on these globally accepted measures. The culture of technological development for industry Why on earth then, given the inspirational character of discovery in science, would any young person with a brilliant mind, lower themselves to target what might appear to be the lesser or even more tawdry goal of technology development? To answer this question, I have had to reflect on why I have personally chosen to devote so much of my own career to this apparently lesser challenge, and especially as I became more experienced in the latter stages of my career. Is it because I was unable to make a useful contribution to the challenging world of global science? This is undoubtedly to some extent true, but maybe there are other motivations too. The answer I have come to in the end is that I began to find technology development more interesting, more immediately relevant to the competitive advantage of our own small economy here in New Zealand, and requiring a more complex mastery of a broad range of skills. So what actually do I mean by the phrase ‘technology development for industry’? I can perhaps best answer that by saying that I don’t mean translation of research outcomes into commercial solutions, or technology transfer, or the commercialisation of research. The use of these phrases reveals a linear mindset of the application of science which is not how skilled technologists actually do Garth Carnaby spent the first twenty years of his career researching the application of mathematics and physics to the industrial utilisation of the New Zealand wool clip. In 1992, he became Managing Director of WRONZ (Inc.), now the Textile Science Technology Section of AgResearch, and led the organisation through twelve years of continuous profitable growth. His involvement in seeking commercial applications for science in the wool and textile industries resulted in 2000 in his election to the role of World President of the Textile Institute, based in Manchester. Throughout his career, Garth’s interests have covered a very wide span, from the most basic sci- ence to the application of science in industry. His strong support for the vital role of basic research has been evidenced by his two spells on the Marsden Fund Council, first as Chair of the Physical Sciences Panel and then as Deputy Chair and Chair. Dr Carnaby was elected a Fellow of the Royal Society of New Zealand in 1992, and in 2009 he was elected its President.
  • 15. New Zealand Science Review Vol 68 (1) 2011 13 development. What I do mean is the practice of responding to industrial or market needs through a deliberate process of tech- nology development in order to meet those needs. It has more in common with design, product development or engineering than science per se, but of course it might require the application of science to solve the problem – and certainly it will involve the scientific method or something like that. There may even be publications, but that is not the purpose of this activity – indeed there may not be any journals in the field in which to publish and almost certainly none of significant impact factor so as to enable the researcher to build a scientific reputation. Indeed there are many cases where scientific knowledge is not the key component of the solution at all. Some might argue that what I am describing is not science and they may be right. They might disparage it by describing it as only a glorified form of consultancy. However, it certainly is an extremely creative activity which may involve the application of old science to a new problem of local relevance, or to the establishment of patents and/or the achievement of other demonstrably original and innovative contributions. Although the solutions found may be of broad benefit to mankind, the primary motives for this activity are proprietorial, either at the national level or even at the level of the individual inventor. It is that unashamed proprietorial character that is the key to the wealth creation and capture which is aimed for. Summary comparison of key features Previously I’ve suggested some excellence criteria which could be used to assess the performance of those engaging in these two distinct cultural activities (Carnaby 2009). Table 1 sum- marises these, together with some associated characteristics describing the activity. Implications for New Zealand (Inc) Failure to fully understand and value both of these cultures in New Zealand will in my view lead to a sub-optimal innovation system. I don’t think we can point the finger here at the gov- ernment or government agencies. In fact they have developed a range of public intervention vehicles, from Marsden Fund to Technology New Zealand, which reflect the necessary values and which fund the most promising proponents of both sci- entific research and development for industry. What we have not done, however, is reach a consensus amongst researchers over the prioritisation of these activities. Nor have we achieved an acceptance of the need for co-existence, nor have we achieved a differentiated system for assessing excellence via peer review. I believe it is important that we make progress on these mat- ters within the New Zealand research community. I think it is important for New Zealand. We are a small community remote from the markets to which we are capable of successfully sup- plying only an alarmingly small number of commodities. The number of companies capable of exporting at scale is low. If we are to improve this situation, the case for more technologi- cal development to support both the successful industries we do have and to create new ones which we do not, is in my view compelling. I do not personally believe that putting all our eggs into the basic research basket, the results of which will be openly published in international journals, is the optimal strategy. We do seem to be under-investing despite the existence of some wonderful examples of market-led technological develop- ment. An example of such an opportunity is represented by the ‘Placemakers Lab’ on the Boulder Bank in Nelson, where the Cawthron scientists have cloned the breeding life-cycle of our major shellfish species. This will enable selective breeding of improved stock to commence, and hence a competitive advan- tage for the country to be created. This won’t lead to papers in Nature, but it could add $1 billion to aquaculture exports from New Zealand. We could also cite the Fonterra ingredients team at Palmerston North, or the HortResearch efforts in the sensory science of New Zealand wine. Whilst Government has developed differentiated funding streams which do reflect these differing cultures, the Govern- Table 1.  Criteria to assess performance of those engaging in the two distinct cultural activities (Carnaby 2009). Activity Value proposition for Excellence criteria Frequently levelled use of New Zealand criticisms taxpayer funds Basic scientific Discovery of new Serendipitous Novelty re literature Limited direct research scientific knowledge discoveries economic return on investment Engagement with Informs Tertiary Publication No direct pathway global science Education to New Zealand outcomes Intellectual stretch Informs applied science Citation Self-indulgent lifestyle choice Individualistic Cultural imperative Peer review Step changes in economic activity Market failure Technological Application of existing Competitiveness of Clarity of need Poor science development and knowledge to new New Zealand applied research New Zealand problems enterprises Novelty Industry should pay Needs driven by Export growth Economic impact Takes resources the potential user away from basic Market failure without Peer review science or public State leverage good science Large irreversible Private benefit short-term gains capture
  • 16. New Zealand Science Review Vol 68 (1) 201114 ment investment in applied research such as the Research for Industry area has often been looked down upon by academics as being unworthy of their attention. Others have a part to play too. Let’s start close to home with the Royal Society of New Zealand. The Society has made a clear decision that its Academy will embrace a relatively broad church. It now includes scholarly research in the humanities alongside traditional science disciplines as well as applied sci- ence and technology. However, do its committees who elect the fellowship really apply a multidimensional set of excellence criteria in selecting its fellowship or does it continue to place an over-reliance on traditional research scholarship? For a number of years now I have berated the Academy on this issue – I have suggested that we try to elect say a couple of new fellows each year whose research has created a $100 million sector in the New Zealand economy. Surely these people exist, can be identified and their contributions measured and assessed – or is Fellowship the wrong accolade – perhaps it is, and for this reason I have recently been promoting the enhancement of the status of special medals such as the Pickering, and by giving out a couple of special President’s awards. I have also been very pro-active in lobbying the Tertiary Education Commission so as encourage them to make the Performance Based Research Fund excellence criteria more permissive of development as well as the more traditional areas of research and scholarship. Not all academics want to engage in development, and nor should they be forced in this direction. Their main job is to produce graduates whose education has been informed by current research. However, some academics – maybe 15-20% – do enjoy development, and would engage more actively in it if their career reward incentives placed higher store on it, and were permissive of the time so expended. In my view, graduates coming from a more entrepreneurial research and teaching environment might well be expected to be even more valuable to the country. This is not to mention the country achieving greater direct economic benefits from our large Vote Education contribution to academics salaries. Fortunately, too, we have a unique opportunity in implement- ing the CRI Task Force recommendations to refine the role in the New Zealand innovation system of the CRIs. The CRIs, the independent industry-controlled Research Associations, and private companies are the key to our progress in technological development. The CRI Task Force clearly signalled the need for the CRIs to become better focused on delivery of results to their sectors for the benefit of New Zealand. The CRI Act requires the CRIs to carry out research. In the context of this presentation, what does ‘research’mean and how will the Boards of the CRIs be in- structed or expected to interpret that? By research, do we intend them to behave as if they were ‘student-less universities’ with large platforms aimed at ‘science discovery’with international publication as the main objective? I hope not. It is widely believed in the international science community and indeed accepted by economists that science discovery often precedes technological development and that more investment in it might fuel faster technological growth. However, whilst I personally would agree with this in general as it pertains say to, say American scientists and the US economy, or even British scientists and the British economy, the issue is more subtle for New Zealand. I would certainly agree that open publication of New Zealand science in US journals might stimulate the US economy too, but will it stimulate ours? I think we have to ask more searching questions of our CRI investments and the benefit capture mechanisms they propose to use. Nearly all CRIs are likely to have an objective of ‘science excellence’. If so, which criteria would be used to assess it – academic research criteria or technology development criteria? The recent budget signalled a great deal of new funding avail- able through the primary growth partnership or for business- oriented research. This represents a major new opportunity for New Zealand-based scientists to engage with business and to win new resources for their research teams. However, the cul- ture required to succeed in this will be different. It will require a service mindset. It will insist that scientists meet with the leaders of industry and listen to what it is that industry needs from science. I hear scientists say that industry leaders need to listen to scientists, too, but that’s beside the point – they are unlikely to do so because they have many demands on their time and for their discretionary capital. It is my view that it is the scientists who need to do the listening for needs, not the other way around. It will require the services of generalists who are capable of linking science expertise to the needs identified. It will also require a willingness on the part of scientists to drop what they are doing in order to respond to the issues identified. Some members of the science community may regard what I am saying today as heresy, but what I am talking about is nothing other than excellence in applied research. We don’t need every scientist in the country doing applied research. But we do need an army of scientists doing it if we are going to close the standard-of-living gap with Australia. The CRIs in particular need to take the lead in this. Industrial Ressearch Ltd made a start last year with its competition, ‘What’s your Problem, NZ’. We must avoid denigrating those scientists who do devote their careers to the application of science to New Zealand issues. Often this will be the application of old science to a new problem. The results might only be relevant here. The New Zealand science journals published by the Royal Society of New Zealand are often avoided now because they have low impact factors. However, they were developed as a vehicle for communicating what matters to us, not to the audience for a prestigious US journal. If we are not to denigrate these applied scientists, ourAcad- emy and our institutions will need to learn how to assess them and do better at recognising them. We simply must recognise their creativity, their energy, and their intellectual contribution. Their contribution will typically integrate across a broader skill- set of expertise and normally combine this with a pronounced focus on leadership. Just as all of us would love to see one of our basic scientists win a Nobel prize whilst working in New Zealand, so too wouldn’t it be good if we could equally celebrate someone whose ideas and creativity have led to the develop- ment of an extra $1 billion per year of wealth in our economy and enabled us to enjoy the standard of living to which our community aspires. Reference Carnaby, G.A. 2009. ‘The’ New Zealand Science System – An approach to evaluating structure. New Zealand Science Review 66(4): 131–135.
  • 17. New Zealand Science Review Vol 68 (1) 2011 15 Over the last 40 years New Zealand has gone from being the 8th to the 23rd in the OECD rankings of GDP per capita. Its rate of productivity growth has been low for at least 30 years. As a consequence, average annual wage rates are roughly 25% lower thanAustralia’s, and 20% lower than Denmark’s. Between 1983 and 2009 our share prices remained nearly static, while those of Australia and Denmark both rose by 500%. The situation has been recognised by government, and there are a number of proposals under way to significantly boost public and private investment in research and development. Many of these will affect the roles of current and emerging players in the science and innovation field including tertiary education. It is well known that the average OECD government invests 0.65% of its GDP in research and development. New Zealand invests one-fifth less than that, and our private sector invests two-thirds less than the average OECD private sector. The 2010/11 Budget created several interventions, many of them formulated on the back of the new Economic Growth Agenda, which is focused on: a better regulatory environment for business; a growth-enhancing tax system; better infrastruc- ture; better public services; improved skills and education; and improved science, innovation and trade. So the environment seems set for New Zealand to rectify its poor innovation performance, and polytechnics and institutes of technology have an important emerging role in the innova- tion system. New Zealand’s Institutes of Technology and Polytechnics The system of Institutes of Technology and Polytechnics (ITPs) in New Zealand is unique and the envy of many other jurisdictions: • They specialise in applied, practical learning outcomes at the high end of the qualifications spectrum. • ITPs offer their own degrees and postgraduate qualifications, and have access to the Performance-Based Research Fund (PBRF). • ITPs have strong and intimate links with industry at national and regional levels, but especially with Small/Medium En- terprises (SMEs). As a feature of our tertiary education system, ITPs are closely associated geographically not only with centres of population, but also with centres of economic interest, including agriculture, aquaculture, and manufacturing and other industries (Figure 1). The largest ITPs have combined to work together as the Metropolitan Group. These six Metropolitan ITPs (Metros), Re-setting science and innovation for the next 20 years The role of polytechnics in the innovation system Linda Sissons* Wellington Institute of Technology, 11 Church Street, Wellington 6011 *Correspondence: linda.sissons@weltec.ac.nz Figure 1.  Distribution of the 20 Institutes of Technology and Polytechnics in New Zealand. Dark circles, Metro Group; light and grey circles, provincial ITPs. Linda Sissons has been chief executive officer of WelTec, the Wellington Institute of Technology since 1999. Dr Sissons has served on a range of government taskforces and inquiries, including the Tertiary Education Advisory Commission in 2002.
  • 18. New Zealand Science Review Vol 68 (1) 201116 based in Auckland, Manukau, Hamilton, Wellington, Christch- urch, and Dunedin, work very closely together, and have led the development of a web-based tool for identifying where business-based innovation resources are available in any one of the contributing Institutes through the website Innovating New Zealand at www.innovatingnz.org.nz . Some regional ITPs also have a strong track record in re- search and technology transfer, such as the Eastern Institute of Technology (EIT) in Napier, and the Bay of Plenty Polytechnic (BOPP) in Tauranga. These are fully fledged tertiary education institutions that devote some time and effort to research. The research and development that they do relate closely to the characteristics of their local economies: for the EIT the focus is oenology and agriculturewhile the BOPP focuses on marine biology, aquaculture, and local environmental issues like the cause of lettuce bloom in the Tauranga harbour, and the impact of boat disturbance on sea grass. The Metropolitan ITPs have similar patterns. While gener- ally more broadly-based than regional polytechnics, they have particular strengths that relate directly to their local economies and interests of employers. So, for example, Wintec in Hamil- ton has a strong focus on agribusiness; WelTec, in Wellington, has a strong focus on enhanced manufacturing; Christchurch Polytechnic Institute of Technology has a strong focus on IT and electronics. So it should be noted that the ITP sector within New Zea- land’s tertiary education system is geographically dispersed and also reflects the geographical dispersement of communities and industry around the country. It also has growing strength in research and development (RD) and technology transfer (TT), both strongly linked to the needs and interests of the regional businesses, many of which are small and medium enterprises. Size and saliency of the Metropolitan ITPs Together the Metros within the tertiary education system offer joint qualifications and services, and make a sizeable contribu- tion to New Zealand’s education and intellectual landscape. In 2009, they were responsible for delivering 50% of the entire (20-strong) ITP sector equivalent full-time students (38 000). They won $500 m revenue, 50% of the entire sector’s total revenue. They awarded 15 000 undergraduate degrees, by far the majority of degrees within the sector, and another 1200 post-graduate degrees. External research revenue earned in 2009 was $2 m. By contrast, the internal investment in research was around $9 m (Metro Group 2010). As ‘research polytechnics’, the Metros are marked by very close connectedness with industry, both large and small com- panies around New Zealand. This is manifested by a number of key characteristics. About 850 or more companies form part of the decision-making and advisory apparatus of the ITPs. Their representatives form advisory committees, give guidance on the content of qualifications, and are often involved in deci- sions about appointing staff. They second their own staff to act as teaching staff within their local institute of technology. They are frequent visitors. Some of them are actual industry ‘partners in residence’, others give time and space for students of those institutes, and frequently, employ the graduates. These companies often co-fund equipment, or at the very least, they are regular users of equipment that has been bought with public funds for education and research. Figure 2 shows the evolution of the role ITPs play in an industry’s ability to innovate and commercialise a product or service over the past decade. In addition to an industry’s evolu- tion over that time the contribution of ITP’s to the sector itself has evolved. Traditionally (Phase1) ITPs delivered graduates with pre- employment training in the skills needed to service the core, commodity-based industries, and to keep the basics of the domestic economy ticking over – we trained builders, farmers, foresters, meat workers, office staff, cooks, nurses. That phase pretty well reflected the stage of development of much of the New Zealand economy at that time. The second phase is where many of those same industries/ companies started to build ‘value- added’ into their products, and differentiated on the basis of value for money. The third phase is where industries and companies take decisive steps into international markets with highly developed and differentiated products, where imitation becomes difficult because of the cluster of skills and ways of working that are bundled up in it. There are a number of key characteristics: • These companies earn big money. • RD is integral to their success. • Because of the bespoke nature of their skill and knowledge requirements, they are learning companies, and for those who find an education provider they can partner with, the relationship is a genuine partnership. Phase 4 belongs to industries and companies that have not evolved in this way but are created to meet an entirely new need. They need the highest level of partnership intensity, and have the highest requirement for fully infused RD. That combination of focused skills development and participation in the company’s own RD goals is what is likely to deliver the greatest economic value. The most advanced ITPs are now able to meet the needs of Phase 4 companies. The ability to innovate consistently and with sufficient ‘new- ness’ and to deliver economic value through innovation is not easy. It requires high levels of achievement in research, and a business strategy that encompasses both capital development and organisation-wide skills. New Zealand’s ITPs can play Figure 2.  Key characteristics of New Zealand companies on the spectrum, commodity-based to high-tech high value, in the evolution of industrial innovation, and the potential contribution of ITPs (based on Webb Grant 2003).
  • 19. New Zealand Science Review Vol 68 (1) 2011 17 a unique role in reconciling that tension, and in the journey between these poles. The New Zealand Institute in its NZ Ahead Report (New Zealand Institute 2010) draws on both OECD surveys and the World Competitiveness reports to dig into New Zealand’s busi- ness innovation and business sophistication track record to see how we are doing against others on a raft of measures. Table 1 summarises the Institute’s findings. Technology Transfer • Although ITPs conduct ‘blue sky’and development research as well, technology transfer is peculiarly appropriate territory for them. • This means that applications developed elsewhere are adapted to New Zealand or company-specific conditions, and the problems of implementing them in specific companies are more able to be solved. • Some of the skills needed for successful technology trans- fer within firms and industry are systems thinking and problem-solving in a multi-disciplinary setting. ITPs prepare adept graduates through workplace projects, problem-based learning and mechanisms such as internships, cadetships, and outplacement which are often integral and compulsory parts of courses of learning. • Technology transfer is often as much about skilling the new users as it is about the technology itself. Because of their vocational and technical training mandate, ITPs can be the right research partner for this work. Training • Training, up-skilling, and company-wide skill development are the core business of ITPs and the ‘research polytechnics’ in particular. • This function is much broader than training for use of new technologies. It is also cultural, strategic management train- ing so that, for example, a new technology can be embed- ded into a newly ‘lean’ environment and work processes. Typically, it can also involve raising technical literacy and computational skills to high levels. • Training should not be discounted as a contributor to innova- tion. ‘The .... current focus on fostering productivity growth via exciting high-tech breakthroughs misses a big part of what really drives innovation, the diffusion of better busi- ness processes and management methods’ (The Economist 2010) To summarise, ITPs, and especially the ‘research polytech- nics’, have a particular and important role to play in science and innovation. They are supporting the next TIN100 (Technology Investment Network top 100 New Zealand companies) and the next after that. References Economist 2010. How to Grow: A special report on the world economy. Economist 9 Oct: 22. http://www.economist.com/ mode/17173886 New Zealand Institute 2010. NZ Ahead: A report card of New Zealand’s social, economic, and environmental wellbeing. http://www. nzinstitute.org/index.php/nzahead/ Webb, C.J.; Grant, C. 2003. Economic Transformation: An Implementation Framework. New Zealand Tertiary Education Commission, Wellington. Basically: • There are important things going right, but they are some- what fragmented and isolated from one another. • There are many important things not going so well. What they have in common is that they spring from an unwilling- ness by companies to invest their own money; and they are often the product of too few of the players joining the dots and working together. Ways to enhance New Zealand’s innovation scores Ways in which ITPs can help to enhance New Zealand’s innova- tion scores can be summed up in the acronym RDT3 (RD plus TechnologyTransfer plusTraining).The key features potentially available include: Strong applied research capability • Degree programmes are applied and students spend signifi- cant time in industry and workplaces. • The Innovating New Zealand website takes clients to which- ever of the particpating ITPs staff or student research groups can assist. • ITPs are typically home to sophisticated technologies that are there for use by industry, with staff and student resources to assist. Much of this resource enables the creation of proto- types and ad hoc devices which companies can requisition or make for themselves. Table 1. New Zealand’s innovation and business sophistication rating. What New Zealand does well Quality of scientific research institutions (14th of 139 countries) Sophisticated production process (26/139) Local supplier and quality (16/139) Willingness to delegate authority (10/139) What New Zealand doesn’t do so well Ranked 20/31 OECD countries in innovation Low innovation score a key determinant of low GDP per capita 95% of OECD average value since 2006 Competitive advantage through unique products/processes (74/139) Availability of scientists and engineers (67/139) State of cluster development (56/139) Company spend on RD (38/139) Private sector invests two-thirds less in RD than ‘average’ OECD country Source: The New Zealand Institute NZ Ahead Report (Sept 2010)
  • 20. New Zealand Science Review Vol 68 (1) 201118 Universities exist to innovate – and to train innovators. Some- times the discoveries emanating from universities have direct economic value through their value in industry, while sometimes the value is to society or humanity without any apparent direct impact on our economy. Governments and their advisors con- tinue to fret about whether universities focus sufficiently on eco- nomic outputs, as if these are somehow opposed to intellectual pursuits. Yet there is plenty of support for the concept that the intellectual and the economic are inextricably linked – that the greatest economic gains any country can make in a competitive world depend on deep investigation of difficult problems. The key to unlocking the value in university innovation is presum- ably then to ensure that universities are well linked to industry, while enabling the universities to do what they do best. Are such linkages in place in New Zealand? While it’s dif- ficult to provide a nationwide assessment, at least some of our universities now have deep experience of the paths between in- novative research and its commercialisation, and signpost these clearly to their staff. As a result, for many university staff in New Zealand, there is no conflict between an academic output and an industrial one – you can discover, protect, publish, then commercialise in one smooth journey. Universities are also making their intellectual capital available to industry in con- tract research, and many academics are setting aside their own research passions to pick up questions lobbed in from outside. These two activities – innovation that drives commercial op- portunities, versus innovation that responds to commercial need – require different management, and some universities have developed specialised systems to support both. Can universities do better in fostering innovation? Uni- versities can tweak their own research engines, especially in developing long-term strategies to grow world-leading research programmes. Universities might also engineer more effective contact with a commercial sector that often has limited knowl- edge of their capacity. And universities can work together, and with other partners, to generate national research consortia of sufficient scale to compete internationally. New Zealand universities seem ready to accept a greater role in actively promoting economic development. Many aca- demic staff recognise there is no fundamental conflict between academic freedom and maximising the economic benefits of their work, since the availability of pathways for research commercialisation need not interfere with the pursuit of excel- lent research. Regardless of how greater economic impact is achieved, universities are likely to insist that the diversity of the academic community needs to be preserved, along with the capacity of its members to innovate in whatever field they choose. This ‘universality’ within universities is one of the hallmarks of a successful industrialised nation, and allows some of the most valuable innovation to spring from the most unexpected corners. Rod Dunbar graduated MBChB from the University of Otago, and later completed a PhD in im- munology at the Wellington School of Medicine. After 6 years at Oxford University’s Institute of Molecular Medicine, he returned to New Zealand in 2002 under a Wellcome Trust International Senior Research Fellowship, and founded a new laboratory at the University of Auckland’s School of Biological Sciences. Associate Professor Dunbar’s current research encompasses a multi-disciplinary programme to develop new immunotherapies for cancer and investigate the use of primary human cells in medicine. In 2008 he was appointed the Director of the Maurice Wilkins Centre for Molecular Biodiscovery, a Centre of Research Excellence. Re-setting science and innovation for the next 20 years Role of universities in innovation (Abstract) Rod Dunbar*  Maurice Wilkins Centre for Molecular Biodiscovery, University of Auckland, Private Bag 92-019, Auckland *Correspondence: r.dunbar@auckland.ac.nz