Archive July 2011

MSI portfolio — looking like the best ministerial game in town Peter Kerr Jul 28

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But wait….there’s more.

No, there’s not three but five current National MPs putting themselves forward as Minister of Science and Innovation after Wayne Mapp retires in November.

Perhaps the magic word’s innovation, plus the fact that the hard yards have been done as far as reform of the sector is concerned.

Whatever, it’s great news for the sector that some high quality people are putting their names forward for the portfolio after the election and that it is a sought after position.

From a political career point of view, the Minister of S&I has a fair bit going for it when you think about it.

It’s a good news portfolio, the national profile is excellent – economic growth and all that beyond the Number 8 wire stuff.

And, which is always good from a Ministerial POV, any bad news is insulated from leading the portfolio. Any changes, redundancies and the like can be sheeted back to the CRI or university – its comparatively hands off compared to health or social welfare as examples.

All in all, excellent.

I’d still like to see John Key in the role. It would certainly give him a chance from a posterity viewpoint to put a stamp on his Prime Ministership.

In much the same way that David Lange ‘captured’ education, and Helen Clark made herself the minister of arts and culture, Key has the opportunity to be seen as driving the economy-expanding part of our country.

Of course Key’s a pretty busy fellow, and would need an excellent second-in-command in the portfolio.

Looks like he’d have no shortage of people willing to put their hands up.

National MP’s lobbying for MSI position Peter Kerr Jul 26


Rumour has it that at least three National cabinet ministers are chasing the soon to be vacated Minister of Science and Innovation role. Present Minister Wayne Mapp steps down from Parliament after the upcoming election.

Assuming National gets back into power post-November, it’s an encouraging sign and recognition of role that science, and more particularly its income-generating kissing cousin, innovation, can play in the economy.

Ideally John Key would take on the role (though he’s not one of the three names being whispered at this stage). Like the Denmark and Finland’s of the world, having your top dog literally and figuratively trying to herd the economy down a growth path could only be good.

However, the recognition by politicians of both the benefits of a strong science and innovation platform, and for their own political aspiration, of the Minister’s role, is a welcome change.

Post-election, it might also be an opportunity for the Minister of S&I position to rise above its present ranking of 13. Again, if government really wishes to indicate the importance it sees for the conversion of good ideas to income, an elevation of its position can’t come soon enough.

Finally, on a ‘but of course’ moment, an observation as recently pointed out to sticK.

The recent merger of the Foundation and the Ministry of Research, Science and Technology into a single MSI entity makes things a lot easier from an overseas trade mission point of view.

Other countries, when visiting New Zealand, bring their trade, defence, science and other officials as part of the general discussion team.

The fact that New Zealand, until recently, has had two government science overview bodies, has made it problematic of which officials to take overseas when we head to other countries.

No such problem now.

Tech transfer vouchers starting slow, but will help crank up an innovation conversation Peter Kerr Jul 12

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Ten approved projects under MSI’s technology transfer voucher scheme that kicked off last November isn’t what you’d call a huge number.

TTVs are a way to provide science/innovation expertise to businesses who don’t have an in-house R&D capability.

But, just as the SMEs that the TTVs are aimed at, are learning about the scheme, so is the Ministry itself.
That’s part of the reason it has dropped the threshold for the 1:1 co-funding to $30,000 from $100,000.

Especially given the recession we’re either just coming out of, or still in, depending on who you talk to, coming up with $100k cash to spend on a promising project is often extremely difficult. $30k’s a bit more do-able.

At the same time, these high-value manufacturing targeted companies have little or no experience in dealing with either the government machinery or the relationships and projects with research organisations such as Weltec or IRL (among the six initially accredited providers, with another eight added from July 1).

So, given that we’re all on a learning journey of how to up the amount and intensity of money going into company-specific R&D, and that even at the time of its launch there was internal MSI debate that $100k was too large an initial hurdle, it’s sensible to change the rules.

As the TTV project coordinator Tony Brenton-Rule has observed in Finland and Denmark (both of which have used similar TTVs), these schemes start off small, with R&D investing companies ramping up further science spending as they see success and get comfortable with their innovation relationships.

In the first eight months of the TTV scheme, 10 projects worth $1.209 million (of the business’s money) were approved, and another five worth $422,000 yet to be considered.

There has been $5 million a year over four years set aside for the scheme, though Brenton-Rule expects to see demand for the vouchers exceeding that by 2014.

By that time too, other SMEs will have observed the success generated by R&D investing colleagues, and be looking to get onboard themselves.

One of the main points of the exercise is to crank up the conversation, as well as the means and opportunities for small firms without an in-house R&D capability to get more science into their business.

With more science comes innovation, and the chance to either move higher up the value chain or lower costs – both of which mean more profit.

For small companies, busy enough with day-to-day existence, the TTV scheme is an ideal (and possibly the only) way for them to dip their toes in the R&D environment.

Necessarily, most of these initial projects in outsourced innovation will be closer to the development end of the spectrum. That is, solving today’s problems to generate a return as soon as possible. Even then, such a project may take 18-24 months from whoa to go before they begin to make money.

But, as Brenton-Rule says, from such small ‘nibbling’ larger R&D projects start to occur, and with step-wise lifts, often they’ll become comfortable looking at projects with a five to seven year timeframe.

In other words, success begets success, and inspires increasing confidence in the value of science. Other SMEs looking over the figurative fence at the usefulness of R&D decide in turn to give this outside innovation expertise a go.

And so, the country’s conversation about science and its place and value in business is positively promoted.
Of course, MSI’s TTV scheme is a punt, but one that’s worked in other countries. It is also cleaner and neater than muddied tax write-off type options for participating companies.

It is certainly better than nothing, and small beer in the totality of things.

From sticK’s point of view though, it punches above its weight in giving visibility and credence and value to science’s input to high-value manufacturing.

As importantly, SMEs from the agriculture sector are now eligible for TTVs too.

Given that agriculture’s our main business activity with scale (as dull as it is sometimes portrayed and perceived), that too is a sensible MSI change to the scheme.

Woolly thinking it’s not Peter Kerr Jul 07

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For a change, you can’t call this woolly thinking

The wool industry got some interesting ‘innovation things’ happening at the moment.

Firstly, there’s a consortium consisting of the Wool Research Organisation of NZ, industry participants and the Ministry of Science and Innovation, that’s collectively investing $3m a year over the next five years on a range of projects. This is being managed by Wool Industry Research Ltd. (WIRL) and is examining some industry good projects and confidential individual company co-funded wool projects to help move the fibre up the value chain.

But, of more immediate interest is a project, initially kicked off by WRONZ, now managed by WIRL, which commissioned a New York based innovation consultancy to find some new, better paying, markets for wool.

Fahrenheit 212 is to report back in mid-August with four ideas ranging from radical to very different, and parties are being invited to provide an Expression of Interest to be in the room when the ideas are presented.

These ‘new products/new uses’ concepts being explored by F212 strikes sticK as being clever.

As WIRL chairman Graham Brown says, ‘it’s a novel idea, but also risky.’

The risk is that none of the ideas to be presented by F212 will be exciting enough for commercial entities to pick up. Fahrenheit 212’s chief executive is expatriate New Zealander and Timaru-raised Geoff Vuleta, a former worldwide director of Saatchi & Saatchi.

But, nothing ventured, nothing gained.

If the ideas, currently being assessed in conjunction with AgResearch Ltd. as to whether they’re scientifically possible, are deemed worthy of further exploration, then the process WIRL’s put in place becomes really interesting.

Fahrenheit 212 has already had a third of its (potential) finders fee, literally in this case, paid upfront by the consortium.

The final two thirds, to be paid for by the potential business partner(s), is based on F212’s idea being a commercial success.

Which provides a pretty large incentive for F212 to come up with genuinely ‘do-able’ ideas.

Obviously the people wanting to be in the room in mid-August have to sign a non-disclosure agreement, and maintain a strong degree of secrecy about the ideas they’re exposed to.

‘But, once the outside company takes up the idea, we’ll step aside,’ says Brown. ‘However, the consortium may assist in R&D funding around the idea.’

‘They’ll take up the idea and do the rest of the work to take it to market. Fahrenheit 212 will get paid a success fee on that.’

Brown says that at this EOI stage, the consortium’s casting its net as widely as possible, and those wanting to be in the room don’t have to currently be in the wool industry. WIRL’s building its database for the initial high-level briefing, where individual meetings will be arranged for those that are interested in pulling a development proposal together.

Depending on the level of interest, there may be a meeting in both the South and North Island, though at this stage Christchurch appears to be a certainty.

Naturally Brown has to maintain a degree of confidentiality, but describes one of the ideas as being in a brand new space for wool and ‘way out there.’

Another three are variations on current themes, but with a very different marketing and attributes’ focus.

F212’s approach is to look at marketing versatile, part-processed materials rather than simply scoured fibre (as is often currently the way). The end result should hopefully be the adding of significant value to materials that are suitable for supplying into major international brands.

The consortium asked F212 to flesh out, and make more robust some of its original thinking, and Brown says that the process of coming back to present the new wool ideas has probably taken a couple of months longer than originally intended. The small matter of a couple of Christchurch earthquakes hasn’t exactly helped things either.

However, Brown says it’s worth taking the time to get this part of the process right.

From sticK’s POV, the process undertaken by what is often a fractious, infighting industry demonstrates some refreshing thinking.

The industry as a whole will benefit from successfully commercialising a good idea, and spread across the entire industry, coming up with those ideas is relatively cheap.

The company picking up F212’s ideas, progressively pays them as the product achieves defined milestones heading towards the market. F212, who were approached by WIRL have a track record of putting their proverbials on the line, and putting at risk a large part of their recommendations and ideas. Though the company’s fee was much larger than other marketing companies who would’ve been happy to draw up a marketing plan for ideas that WIRL put to them, F212 clearly has skin in the game.

At the same time however, the sometimes thorny issue of intellectual property ownership is avoided; the company who pick up the idea gets it, simple as that.

If nothing else, the whole process will generate a virtuous cycle of greater innovation.

Heck, they’re even in danger of the whole thing being a wild success; lifting coarse wool beyond a commodity status to match its merino cousin.

Can’t happen soon enough really.

(Note: those who are happy to sign a Non Disclosure Agreement are welcome to attend the F212 presentation(s). See for contact details)

Scientist for a Day stirs the innovation pot Peter Kerr Jul 05

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There’s a real need to crank up the amount of innovative thinking that goes on in existing businesses.

Given the small size of many Kiwi companies, the bosses are often going to be so busy that they’re swamped simply running the business on a day to day basis.

Being able to think about solving current challenges or dream up new ideas for the business is simply too hard.

Still, that doesn’t mean innovation’s not required.

Which is why IRL’s latest initiative, Scientist for a Day is clever thinking.

The chance to have someone from outside the business, who has some different insights and understandings around physics, chemistry, applied mathematics or applied engineering is a great opportunity.

IRL’s had its SFAD competition open for the past month.

Commercial manager Gavin Mitchell says the 30 days the research institute had to ‘give away’ have been oversubscribed.

‘Most of the applications are going to take more than one day’s worth of science,’ he says. ‘The applications describe what the problem looks like and what they want to get involved with.’

Mitchell says the challenges come from across the spectrum of manufacturing and are specific to their businesses.

Those lucky enough to obtain the services of a SFAD will be selected in the third week of July, and find out whether they’ve been successful at the end of the month.

The ‘day’, (which could be more than this) will then be arranged.

What sticK likes about this idea is bigger than simply the visit and report by a scientist……and of course the possible follow on, chargeable work that could benefit IRL.

And, sure there’s a risk that the scientist doesn’t come up with any new breakthrough, any actual solution.

In the first instance, so what? It hasn’t cost the company any hard cash, and just as importantly, has got it thinking wider than the day to day.

More importantly, it is helping to create a bit of a national buzz, generate the notion over and above the competition itself, that there’s value in thinking creatively, using others peoples’ smsrts to help solve your own problems and come up with new ways of making money.

IRL in this regard is helping to alert many companies as to the significance of having some critically applied thinking at their disposal. Industrial Research is helping to stir the pot for everyone.

What’s the bet that other research bodies and engineering companies and various consultants get a inquiring phone call, ‘can we have a look at?… it possible to?….I’ve been thinking about,’ as a result of IRL’s initiative?

I’m sure they’ll all pay IRL a finders fee!

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