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.