An ATI set to fly… a turkey

By Peter Kerr 10/07/2012 5

If rumours are to be believed, the Advanced Technology Institute, is to be established as a separate crown entity.

The ATI is meant to be a hi-tech, engineering-oriented link between science and industry to boost New Zealand high value manufacturing and its ilk.

If true, there’s only two words for it – Oh & no.

Information recently released by The Treasury gives some idea behind its thinking.

So, a separate board, whole new startup and establishment phase, creation of an edifice, building of relationships – a full scale duplication of what already exists in embryonic form from the creator of the original ATI idea, IRL.

There will also be the not inconsiderable challenge in forming a ‘relationship’ between IRL (whose own mandate will have to change) and the ATI – and the inevitable turf war that will go with that.

And if said rumours are true, it’s a heck of a convoluted way to avoid possible redundancies while IRL morphed into a new beast. Not that there would necessarily be that many redundancies.

Supposedly IRL’s doubling in size from about 350 scientists to 700 experts would mostly be engineering and applied science based anyway. So, mostly new people, not many, if any, redundancies.

What’s the bet too the ATI is set up in Auckland’s former tank-yard farm the Wynyard Quarter – a type of government inspired effort to convert a camel into a racehorse.

Not that these comments will make a scrap of difference, but we’re all going to pay for what will be a drawn out, badly designed, poorly executed bureaucratic mess.

Instead of allowing IRL to organically reinvent itself, and reinvent itself, and reinvent itself into the structure(s) which best fit our New Zealand environment, government as god will command from on high.

I look forward to seeing the ‘evidence-based’ rationale for going down this dead-end path.

Let’s hope for all our sakes that for once, it’s a rumour untrue.

5 Responses to “An ATI set to fly… a turkey”

  • This is not a dead end, it’s what should have occurred long ago. The ATI is intended to help NZ business, and the whole history of IRL shows what a struggle it has been, and remains, to get NZ industry to use them as a partner.

    For maximum taxpayer value, the ATI should be sized and closely linked to investments by NZ industry.

    When IRL was formed 20 years ago, the vision was that crown funding and overseas commercial revenue would become a minor contributor over the next decade or two, and over 70% of revenue would be from NZ industry. That has not happened.

    IRL has done OK on the global R&D contract work ( eg GlycoSyn ), but has been unable to build many long term relationships with NZ industry, mainly because it remains a distress purchase of research and development with quick and obvious returns.

    It’s hard to see how IRL can change greatly ( new locations aren’t change ) while still servicing current funders, and not knowing what NZ industry wants to invest in.

    That’s not for lack of IRL’s marketing or scientific ability of IRL staff, but the reticence of NZ corporate management to invest in strategic R&D because it may only generate long term returns.

    Rather than throw another $150 million to IRL, on top of the $500+ million over the last 20 years, creating an institute that could respond quickly to partner investment should provide a superior return for NZ taxpayers.

    Such an institute, without IRL’s current costly infrastructure, could also work with other Universities, CRIs, and overseas research providers who already support many NZ industries.

    However, I’ll be surprised if the plan to morph IRL into the ATI changes, as giving money to IRL is still the far easier path.

  • Yes Bruce, but it is not clear what the new institute might have that will make R&D any less of a distress purchase for New Zealand’s advanced technology companies. No overhead will mean it has nothing to give them except an introduction service – useful but not game changing. And available already from a variety of sources. There is something about making outsourced R&D a vital part of technology company growth in New Zealand that needs to be addressed.

  • George,

    I’m not sure what your experience of NZ corporate management perception of “strategic R&D ” has been, but mine has been that multi-year projects within NZ companies need strong and respected champions within the company to produce successful outcomes, regardless of the technical challenges and obvious potential advantages.

    The issue remains that, for many NZ companies, management sensibly focuses on projects that are favourable to their next annual balance sheet, because boards understand those KPIs, and they are essential for corporate survival.

    Management and boards expect investment should demonstrate rapid returns to shareholders, whilst offering minimal risk. I suggest NZ’s current pathetic Internet infrastructure is an example of such myopia over the last couple of decades.

    The required change is for additional KPIs based on longer-term strategies, rather than just revenue. However, those require governance skill sets somewhat different to those displayed currently in many NZ companies, such as an appreciation of risk versus potential longer-term returns.

    I’d be interested in any suggestions you have on how to link the ATI to partner with NZ technology companies lead by clear-sighted visionaries. Are there more visionaries leading other industries, eg artistic/IT companies?.

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