Who is accountable for this mess?

By Peter Kerr 14/08/2013

If there was even half a thought that Callaghan Innovation’s actions had a modicum of common sense, then there would be no worry.

But, as has to be the case when a year-long-in-the-making strategy is being made up on the fly, CI’s recently announced decision to get rid of KiwiStar Optics smacks of stupidity.

Now, this was a quietly developing business unit of the former IRL that has gradually built a 40 year expertise which as recently as last April saw the University of Hawaii’s Prof John Tonry describing it as one of the best in the world.

Late last year the IRL board made the decision to keep developing KiwiStar (and remember, it had potentially over $5 million of orders on its books) and eventually find a private investor for the business. The initiative to find an investor was well underway when in January, without any discussion or reasoning, CI called a halt to the process and then made the decision to close down the operation.

It is always easier to offload something of value when it has contracts and contacts and its capability is kept intact for someone who is interested in developing it further.

Now, CI has said it doesn’t want to be in business under its own name; but exiting KiwiStar by simply shutting it down is plain crazy.

What is happening is abandonment – along with the attendant costs of redundancy and loss of expertise and fracturing of connections into other industries.

At the same time it also takes away a customer of CI’s Measurements Unit – the group that ensures that weights and lengths and volumes are actually what people say they are.

Working on complex areas such as making extremely accurate astronomical optical equipment helps keep this Measurement Unit match fit.

If CI’s mandate is to create and maintain capability around high value manufacturing, simply getting rid of KiwiStar is the polar opposite.

At the same time, CI has made the decision to keep GlycoSyn, what is essentially a scaled-up and contained laboratory to manufacture complex chemicals. Now, almost 100% of its revenues come from offshore too; and it has an extremely close relationship with CI’s carbohydrate chemistry team – which itself is in a stoush as to whether it becomes part of some university’s faculty.

Talk about a lack of consistency in thinking whether CI is or isn’t in business, there is no logic to these two decisions when you put them back-to-back.

And while we’re on the general topic of all things restructuring, the old IRL engineering workshop is being reorganised; though to what, yet again nobody knows.

This engineering workshop, which acts as a type of halfback between the intellectual forward(thinking) grunt of scientists and the backs/finishing/put it into action expertise of engineers was an important part of IRL’s offer to New Zealand.

It was in this workshop for example that IRL created a prototype roebel cable winding machine – this roebel cable being the heart of High Temperature Superconductors.

Restructuring this workshop in the absence of a strategy is plainly silly.

It was a pity that the Labour’s associate science and innovation spokesperson Megan Woods didn’t take more of an opportunity to rip into CI’s KiwiStar decision and dig deeper into CI’s performance or lack of over the past 12 months. Its press release was underwhelming.

In fact, and as an aside, given such a wealth of ‘what are these guys up to’ stories coming out of the amorphous monster that is Callaghan Innovation, Labour’s missed a number of opportunities.

The decisions being made by the CI board clearly reveal that it doesn’t understand the commercial necessity of growing New Zealand’s international innovation footprint.

It begs the question whether CI is being held accountable by its owners; the government (and by proxy, us) for its questionable decision making and lack of performance.

Without doubt its Minister Steven Joyce needs to take a more hands-on approach to this agency, since to call what is happening a mess is to do an injustice to the word.

As an aside, one point of interest has been that the demise of KiwiStar has spurred the NZ Association of Scientists to action.

Its press release on KiwiStar actually reflects an even bigger question and its headline is one of the more pertinent ones I’ve read.

KiwiStar abandoned – for what?


0 Responses to “Who is accountable for this mess?”

  • Not defending, merely explaining…

    Apparently GlycoSyn, along with the Food Bowl, Supercritical Processing, Fermentation Halls, etc., are considered “Pilot Plants” – which are a strategic part of CI’s planned support of historically-uninterested NZ manufacturing companies.

    The minor detail that GlycoSyn has been financially successful for several years may also have affected decisions, as losing contestable funding may mean CI’s commercial revenue could be a significant part of new management performance targets.