By Michael Reddell 15/10/2017

I’ve been a little unclear what to make of the Rocket Lab story.   Don’t get me wrong, I liked the idea that our regulatory systems can, on occasion, be sufficiently adaptive to cope with new and innovative industries –  even if it is far from generally true.  And I wish all the best to any New Zealander with innovations they succeed in taking to the world market, and if that includes rocket launches that’s fine.

But there was the nagging question of why such an activity would be taking place in New Zealand at all.  We aren’t exactly close to anywhere, let alone home to great centres of expertise.  But there were those government subsidies –  up to $25 million of taxpayers’ money to Rocket Lab, as well as the cost of the regulatory regime (15 to 20 bureaucrats in the “New Zealand Space Agency”).  And I recalled that the French launch their satellites from French Guiana without –  as far as I’m aware –  much else happening in French Guiana.

But there was an interesting article on Newsroom built around an interview with head of the agency, a mid-senior level MBIE official.   It answered some questions, and not in a terribly encouraging way.

There was the disarmingly frank acknowledgement of how little expertise MBIE has

The biggest challenge, Crabtree says, has been the “classic small government thing” of lacking expertise.

“We didn’t have the experience or technological depth, but the focus is on picking things up quickly but also working with international partners who can bring that to you…

“I set the challenge which was, can we move as fast as Rocket Lab?”

Where are the incentives to get things right, when the hype is all around accommodating –  and keeping pace with – Rocket Lab?  You can pick up lots of things quickly, but often you don’t know what you don’t know.    (And, to be clear, I’m not asserting a need for regulation for its own sake, and have no idea what specific regulation might –  or might not – be needed in this industry, but the general point holds.)

And then there was the answer to what New Zealand had going for it, aside from the cheque book of the put-upon taxpayer.

New Zealand has what Crabtree deems “a natural resource endowment” when it comes to space-related activities, such as a range of launch angles.

“You want to launch a rocket to the east, and you want to launch a rocket over the ocean, and you want that ocean to be relatively clear of ships, and you want the sky to be relatively clear of planes…

“There are very few places in the world that tick all the boxes.”

So that would be New Zealand, Madagascar, the Falklands Island, and maybe Uruguay/Argentina?  Those great centres of economic activity, innovation and so on.   We have political stability going for us over each of those other places, but it scarcely sounds like the makings of  –  or even a marker of – a transformed economy, when the business has to operate in a place where nothing much else is.

Ah, but then there are the kids

Beyond the economic calculations, Crabtree hopes a booming space industry can encourage children to develop an interest in space and technology.

“Kids get interested in science either through dinosaurs or space, and we’ve had lots of dinosaur kids, but space hasn’t really had a fair go.”

The agency has been providing educational materials for schools to use, while universities also want to attract those keen on making a future contribution to the space race.

I guess at least the government is symmetrical –  we also subsidise the film industry which provides the most-frequent encounters with dinosaurs these days.

In my day, the Apollo programme, moon landings and all, was great for exciting interest in space, around the world.  Count me just a little sceptical that some rockets launching from remote sites on our east coast are going to make a material difference to the career choices of many New Zealand kids. Or that, if they did, many of the resulting –  higher value – jobs would end up in New Zealand for long.

Perhaps the industry can succeed here, standing on its own feet.  If so, I wish it well. But I’m a little uneasy about politicians and officials talking up, and then being pursued by, the hype.  Corporate welfare dollars all add up after a while.

0 Responses to “Remoteness….occasionally a benefit”

  • I’m getting a little tired of people talking about corporate welfare in the context of government grants to private businesses. There is a well-developed body of thought around the government’s innovation support work, much of which centres on the economic concept of spillovers. The presence of this NZ designed and US financed rocket operation is upskilling a lot of kiwi individuals and businesses to do things they’ve never done before.

  • You are entirely correct Ross, and I have experienced discussions with an acquaintance whose business benefits directly from Rocket Lab (they build components for RL in their business in Auckland). These components contain “spillover” technology – in both directions.

    That doesn’t get around the main issue of government funding support for business which is: if its such a great idea and has such strong likelihood of success, why is it not being funded by private capital?