More science crumbs

Some of the phrases from the distant past were stirred in memories by the Government's announcement of extra funding for science and technology research.

Fancies that New Zealand could become "the Switzerland of the South Pacific" or "the new Singapore" sprang to mind, along with notions of becoming a world financial hub, or another "silicon valley".

The plain truth is that although New Zealand scientists and researchers have made some notable discoveries and improvements, the country remains tagging along in the dust of many others.

The world financial hub proposal has already been overtaken by our closest competitor, Australia, whose Government last week announced incentives to attract international fund managers and to make trading by foreign banks much easier.

It is difficult to imagine our Government matching or bettering that arrangement in Thursday's Budget .

By the same token, years of indifference to adequately fund scientific innovation for the longer term - at least 10 or 20 years - has seen New Zealand gradually fall behind its competitors in the intellectual markets in which we compete for skilled thinkers, researchers and inventors.

There was some progress during the Clark government's term in office, with its research and development tax credit and the $700 million Fast Forward Fund, and Labour has grounds for criticising the National-led Government's announcement last week as not being sufficient or early enough.

The Government's Primary Growth Partnership has, Labour says, not paid one dollar to its intended recipients and, further, business has received nothing from the Government for research and development for the 18 months the Government has been in office.

Still, even a few crumbs is better than nothing at all, and of the $321 million earmarked by the Government over the next four years, $225 million is "new" funding.

There are aspects of the arrangements which look promising, including a trial scheme to establish links between private companies and publicly-funded research organisations such as universities and Crown research institutes.

Additionally, money has been set aside to provide science scholarships, and to attract science entrepreneurs to set up here.

But the main focus is on direct funding to large and medium-scale companies to use as they judge appropriate.

In short, the Government has decided to trust business to spend the money on the purpose for which it is being made available.

One snag is that some $96 million is being taken from other government science funding that has been deemed not to be delivering value; quite what the consequences will be for those involved has not been spelled out; another is that the total sum is considerably less than National was talking about before the 2009 election.

There is a degree of reassurance that science and research is, however, back on the list of Government-funded priorities, and a good deal of activity is taking place beneath the surface of state pronouncements.

For example, during the next year the Tertiary Education Commission is sponsoring meetings at all eight universities where greater collaboration across a range of disciplines, including biotechnology, energy, nutrition, education, design and creative arts and manufacturing, is to be discussed between private business and academia.

It certainly makes national economic sense for New Zealand producers and manufacturers to exploit to a far greater level than is occurring at present the commercial value of publicly-funded institutional research and invention.

Of course, ideas and knowledge are but one half of the equation; much more venture or risk capital will also be required to develop products and sell them internationally- a notion the Government should certainly be addressing in the Budget.

An extra challenge is to attempt to meet the needs of small to medium-sized - even start-up - enterprises which appear to be excluded from the announced funding.

So much innovation takes place in low-cost, small-staff enterprises that it would seem potentially an investment prospect well worth far greater state support than is the case, even though the risks of failure may be greater.

Admittedly, these are straitened times for the Government, but, having sat on its hands for so long after having promised so much before being elected, it is bound to be judged by its actions: so far they amount to a limited commitment for a limited period.