One reason for low private sector investment in research and development

By Grant Jacobs 17/12/2012 10

… is a lack of scientists running companies – ?

This thought was offered by Peter Hodgson, a former Minister of Science and Technology to New Zealand in a speech to graduates at the University of Otago:

In Germany, Japan and Scandinavia, scientists ran companies and their science influenced management decisions.

”In New Zealand, those same companies are run by accountants or lawyers.”

This was one of many reasons why this country had ”one of the lowest levels” of private sector research and development in the developed world.

It’s not a reason I’ve seen suggested before. What do readers think – ?

He also said science graduates were needed even if they didn’t do research and called for ‘a stronger science voice in social discourse’.

Other articles at Code for life:

Science PhD career preferences surveyed

Career paths, redux – the academic research career is the exception

More inclusive re-entry to encourage departure to businesses?

Brain drain and gain (brain flow) in 16 nations

Public called to contribute to NZ Science Challenges list

10 Responses to “One reason for low private sector investment in research and development”

  • Interesting…it would be good to have some figures to see if this is the case. BSc/ BCom is not a common combination – what wldbe the value in encouraging this?

  • The old MoRST did some interesting work back in the 1990s. They surveyed firms and central and local government to see what qualifications the CEOs and boards (or councils etc) possessed.
    There was a bias towards accountants and lawyers in top positions, except in local govt where engineers were quite common.
    However, you have to be careful about this sort of thing. If a firm depends on its technology for its competitiveness, you might want a scientist or engineer running it- but only if they have wideranging business skills as well.
    You might prefer to have an accountant running a bank or a retail operation.
    In my experience scientists and engineers are rational, numerate and often very good at IT, but many of them are naive about business, and some are anti-business.
    A counter-example is the electronics company Racal, which in the 1980s spawned Vodaphone- a wonderful example of technological foresight. Racal’s longtime boss was an accountant.
    In NZ, do we equip our scientists with the skills to run businesses? It’s a bit risky expecting them to learn on the job.

  • More later, perhaps, but one loose thought: I’d qualify ‘but many of them are naive about business,’ by qualifying ‘scientists’ with something like ‘within universities’. My own impression, subjective as that is, is that those outside academia quickly lose bias, naïvety.

    It’s worth remembering, too, that academics are the minority of those with PhD science qualifications as I’ve written about in the past (e.g. second link in Other articles at Code for life).

  • I am wondering if business size contributes. At least until recently (I will be interested to see the latest stats from next year’s census), a significant proportion of the private sector is in “small business”. A business that employs less than 5, 20, or even <100 (maximum figure I have come across in the definitions) will frequently lack the spare resources to fund a research project, especially when much research requires commitment during years,
    There is also the question of which business activities the biggest enterprises do. For example, a nationwide firm of real estate agents or retailers, even with resources might not consider research a useful expense (except for marketing surveys). What percentage of the businesses big enough to afford committing to research and development are engaged in science/technology?

  • Kerry,

    Good point about the NZ business scene being dominated by (very) small businesses. My (not very reliable) memory has it that statistics show that the majority of the workforce in NZ work for businesses that have 5 or fewer employees. Note that’s the workforce, i.e. employees, not number of businesses of that size. (This is something that has previously bothered me about some government policies which, on the surface at least, appeared to be largely focused on larger businesses despite that they represent a minority of the workforce.)

  • Given that the search for a CEO for CallaghanInnovation (one word) went overseas before it was advertised in NZ (so the story goes), it suggests that there is a fair bit of scepticism within the hirers and firers that NZ cannot find people to run the show from within the country.

    I contend that that is an indictment on the hirers and firers.

    It is not only in that sector the problem occurs. Today’s announcement the Education Secretary Lesley Longstone is about to leave is an example. Even though countries come clamouring to our doors to learn the NZ education system and take it back as “best practice” (I hate that) we went out and hired from over there.

    Convince me there really is no one in the country who can do these jobs.

    • Ross,

      Just to make sure (!), is your comment was meant for this thread? I seem to remember there was one up about the CI not long ago – my first reading of your comment was that it was meant for there!

      I think the context that Pete Hodgkin was referring to was in a more conventional product-producing or service company, rather than the more specialist R&D affair that I believe (?) CI is intending to be. That said, how people are hired (to lead companies or not) can be an issue.

  • I’m late and only have subjective experience here, but on the original post, in my experience in various science contexts it wouldn’t just be a matter of finding a scientist with good people and management skills. Finding scientists who actually want to do it (while still being competent at both management and their science) is yet another problem.

    With the way that much science works presently, a typical successful career is so often about peer recognition, getting publications, getting to conferences—often overseas—and perpetually keeping up-to-date with what’s happening in the field. Stall that for a while to do some management, and it can potentially be the end of someone’s scientific career and reputation if their not careful. In a university context, I’ve seen academics throw around a management job like a hot potato because while someone had to do it and it paid more, nobody wanted it for too long.

    If there are ever to be good incentives for some scientists to get involved in management, I think there needs to be acknowledgement that scientists often need room in the role to keep their hands dirty to keep their career going at the same time, and some scientists just want a decent career path which doesn’t involve them having to ditch much of what they enjoy if they ever want to shift further up the pay-scale. Merely expecting them to sit at the top of a company hierarchy and do what a typical manager would do won’t necessarily work that well for anyone.

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