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Perhaps because they can’t whisper in the Prime Minister’s ear?

igniting-potentialI’m kidding. (It would be a worry if there were some truth in it.)

More seriously, I would like to understand why.

Don’t get me wrong. My initial impression is that it is a fine initiative for those it does serve. I’m just curious as to why smaller players have been left out.

John Key’s speech outlines several initiatives: Technology development grants, technology vouchers, technology transfer, science capability and introduces the Igniting Potential document (PDF file). The latter is ~60 pages long and I’m still coming to grips with it. In the meantime I will rely on the speeches and summaries.

As (very) small player, this line in the MoRST summary (PDF file) of the requirements for applicants to the new Technology Development grants catches my eye:

and revenues of at least $3 million a year

OK, let’s forget about helping smaller ventures or those at an earlier stage.

It’s like John Key says in his speech:

These grants will be targeted at medium to large, research-intensive firms, which can show that their activities result in wider benefits to New Zealand.

It is good to see the broad issue receiving attention and I applaud that. But why the focus only on larger players?

John Key said:

They are not project based, which cuts down on bureaucracy and lets research-intensive firms determine the best use of the funding.

I hope this is set up to encourage new initiatives to start on seeing the opportunity rather than after protracted application processes. My impression is that one of the key reasons the top institutions are the top research institutions is that they are able to react to new directions swiftly. (The same can be said of businesses.)

But why deny the smaller players? Without supporting them, it would seem to want to ’institutionalise’ R&D in New Zealand.

My concern over the absence of support for smaller players extends to other initiatives in the package. The Technology Transfer Vouchers are limited to ’accredited research organisations.’ Readers are welcome to offer odds that smaller players will be included. (Mine are very low…)

The approach sets up a familiar catch-22. Smaller players can’t get to ’Go’ because the entry point is too high and favours the existing larger players. The best they can hope for is to prostitute ally themselves to one of the larger players, if one fits their venture. (Assuming there is a means to benefit this way.)

If the intention is to allow quicker responses to new opportunities within the existing institutions I appreciate the thinking and support it, but–in my opinion–the criteria that make this work, over and above funding being present, are the skills present, their fit to the venture and how research is managed within the organisation, not the size of the organisation or even it’s past record per se. (Size will affect what kind of research is tackled and how.)

Shortly after writing the draft version of the above I received in my email a news release from NZBio, also available on-line. Running under a subject line of ’NZBIO URGES GOVERNMENT TO INCLUDE INNOVATIVE SMES’ (capitals in the original, it’s a media release), it presents similar concerns:

’One potential concern is that the largest of the new measures is an investment of $189.5 million over four years to create a new type of R&D grant targeted at medium to large research intensive firms. With New Zealand’s predominantly SME economy and a focus on improving tech transfer new enterprises will be created. NZBIO and its members look forward to seeing the Government’s strategy for supporting these small, innovative companies.

’Major contributors to New Zealand’s science and innovation industries are often small to medium sized enterprises. It would severely impact their ability to contribute to New Zealand’s economy if these companies are ineligible for the benefits targeted at larger organisations.

[For the full article, please read the on-line copy.]

As these initiatives are not being launched until late this year, it would be good to think that there is still time to add support for SMEs.

Footnotes

Don’t confuse the meaning of R&D here with that in Labour’s tax credit. (The implementation of this I believe was actually headed by Peter Dunne of United Future.) R&D in Labour’s scheme more-or-less was any ’investigative’ activity that might further the success of a business. My understanding is that the R&D in the current initiative is the more traditional research that takes place in universities, CRIs and so on.

On a personal note, when Labour’s R&D package was announced it explicitly included players of all sizes, right down to self-employed operators. When implemented the small players got quietly dropped from the frame. Talk about offering hope only for it to be dashed.

(Updated to remove the reference to Christine Ross being the CEO of NZBio; the CEO is Bronwyn Dilley. My apologies.)


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