Idealog: R&D and innovation

“Kids are missing out in New Zealand because there’s no connect between the education system and a vision for where we’re going to grow our economy.” -Sir Paul Callaghan

### idealog.co.nz 18 October 2011 at 3:36 pm
Let’s end the flip-flopping on R&D
By Sarah Robson
What do Rakon, Fisher & Paykel Healthcare, Tait Electronics, Gallagher Group and Weta Digital have in common? Aside from being successful and enjoying a high profile in business, they’re also the benefactors of the government’s first round of technology development grants, announced late last year. (A second round was awarded in August, with recipients including accounting startup darling Xero.) National pulled no punches in scrapping the Labour government’s all-encompassing R&D tax credit in favour of a targeted, grant-based approach. It’s not a given – businesses have to apply for a slice of the funding pie along with every other man and his dog, and there are no guarantees. But it’s time for government to stop flip-flopping on the issue. Cuts to government spending aren’t going to lift New Zealand out of the economic doldrums. Investment in R&D just might.

Prominent scientist and New Zealander of the Year Sir Paul Callaghan believes New Zealand needs to diversify its economy if its goal is to expand GDP per capita, and start selling ‘brain content’. That means you’re selling products where the manufacturing costs aren’t the main costs of the products – it’s the R&D content.

Read more

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Posted by Elizabeth Kerr

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31 Comments

Filed under Design, Economics, Innovation, Inspiration, People, Politics, Project management

31 responses to “Idealog: R&D and innovation

  1. Elizabeth

    ### radionz.co.nz Saturday 22 October 2011 at 09:08
    Saturday Morning with Kim Hill (Link)
    Sir Paul Callaghan: facing forward
    2011 New Zealander of the Year, Alan MacDiarmid Professor of Physical Sciences at Victoria University, Honorary Fellow of Corpus Christi College Cambridge, and a part of the team staging the 2012 Transit of Venus Forum – Lifting our Horizon. (32′06″)
    Audio | Download: Ogg Vorbis MP3 | Embed

    Professor Sir Paul Callaghan is the 2011 New Zealander of the Year, Alan MacDiarmid Professor of Physical Sciences at Victoria University of Wellington, founder of Magritek, and leader of the five-person Magnetic Resonance Innovation team awarded the 2010 Prime Minister’s Science Prize. Last month he was elected an Honorary Fellow of Corpus Christi College Cambridge in the UK, and his new book, Translational Dynamics and Magnetic Resonance (OUP, ISBN: 978-0-19-955698-4) has just been published. Next year, Sir Paul and partners are staging the 2012 Transit of Venus Forum – Lifting our Horizon in Gisborne, (5-8 June), to inspire thinking about New Zealand’s future prospects, based on a realistic, science-based appraisal of our current situation.

    • Elizabeth

      ### newscientist.com 21 October 2011
      A better way to price the future takes hold
      By Michael Marshall
      Short-term thinking is a criticism often levelled at corporations and banks by anti-capitalist protesters, and they may well be right. A lack of concern for the future is built mathematically into economic theory, and this carries through to the behaviour of companies and governments. But a different way of putting a financial value on the future is changing that.
      Read more

      Related: “Revealed – the capitalist network that runs the world”

    • Elizabeth

      An excerpt from Kim’s interview with Paul Callaghan:

      Kim: We need export-led growth… I mean, reading Thomas Friedman just makes you exhausted really, because he’s saying we need to increase our education levels – he’s talking about the United States – increase our education levels, tremendously.
      Paul: They do, they do, but we’re way better than that.
      Kim: But there aren’t going to be enough jobs to make it worthwhile for all those people staying on at school and university.
      Paul: There’s an issue there; you can run a two-tier economy. So if you develop an advanced economy around knowledge and innovation, it is not going to employ the majority of your people.
      Kim: That’s right.
      Paul: So how do you avoid income disparity as a result of that?
      Kim: Have you got an answer to that?
      Paul: Well yes, I think, first of all, that’s one of the reasons why tourism is a very good thing to have, although it doesn’t build prosperity it employs a lot of people. But you have to have redistributive measures present in your economy to avoid the growth of large income disparity. In the United States, culturally, they object to that. But there are many countries in the world that are very prosperous, whether it’s Switzerland or Sweden, or whatever, that have very small income disparity. So it’s a matter of choice for countries, how they want to use their wisdom in order to ensure that everybody benefits from the development of wealth.

      • Elizabeth

        ### ODT Online Sat, 24 Mar 2012
        Top scientist Sir Paul Callaghan dies
        One of the country’s most high profile scientists has passed away after a long battle with bowel cancer. Sir Paul Callaghan was diagnosed with aggressive bowel cancer in 2008, which then spread widely and news came through this morning the New Zealander of the year had passed away. The 64-year-old created a name for himself in the world of molecular physics.
        Read more

  2. Amanda kennedy

    “…It’s disconcerting to see how connected things really are,” That could be describing little old Dunedin and our very own ‘network’ of interconnected ‘vested interests’. Wonder who will snap up our nice and available assets? or will that be commercially ‘sensitive’? I am guessing the same people who made a killing from the economic lemon stadium will be first in line for these nice high earning assets. Yes indeed, the rich get richer…

  3. Peter

    Good piece that you have highlighted, Elizabeth.
    You hear a lot about us getting into the ‘smart economy’, but precious little about what society does for those who can’t, for whatever reason, be part of that. High tech hubs of innovation and more research and development sound great (not for National though), but…. Aside from the fact that other countries are thinking along the same lines ‘to take their economies to another level’.
    We need enterprises that employ a lot of people. Tourism is one area, as Paul Callaghan has pointed out, but here in NZ I sense we have passed that peak in numbers for a while. Our 100% Pure NZ campaign may be wearing a bit thin and the world is looking more critically at our claims in this area with our dirty rivers etc. We are also at the end of the world which is a disadvantage in economically difficult times.
    Meanwhile we farm an increasing number of jobs off to China and elsewhere because they produce cheaper stuff – a lot of which we don’t need.
    I think NZ is more like the USA in its cultural attachment to not redistributing wealth. No better local example is in today’s ODT Business pages – ‘Spotlight on directors fees rises‘. Stuart McLauchlan, DCHL director, as well as directors on 15 other boards says ‘directors need to be on a number of boards to earn an adequate income’. Fees of $15-20k per directorship is quoted as a common figure for directors. He acknowledges the same names crop up in NZ and we are led to believe the talent pool, and those prepared to serve, is small. Line this comment up with his cry for a decent income and make your own judgement! ( Let’s not forget Stuart runs his own Accountancy firm.) Gee, some people do it tough.

  4. Hype O'Thermia

    There are many suburbs in NZ where “$15-20k per directorship” is more than the average household income. So what’s a “decent income” as in Mr McLauchlan’s excuse for constantly increasing fees (whether the companies are doing well or badly) that ‘directors need to be on a number of boards to earn an adequate income’?

    • Elizabeth

      If most of the country can get behind making an international sporting event a success, what is required to get them involved in something that’s really important?

      ### idealog.co.nz 26 October 2011 at 9:14 am
      Daily Bacon
      Making New Zealand too small to fail
      By Robert Hickson
      Rather than thinking that we can’t be prosperous (economically and otherwise) because we are small and isolated, we should consider how we can make New Zealand ‘too small to fail’ during turbulent times. Fail (with a capital F) is when our economic, social and environmental performance not only decline but remain where they are now. Because, as Sir Paul Callaghan has pointed out, we need to be a country where talented people want to live.
      Read more

  5. wirehunt

    What if Dunedin took the bull by the horns? I know it’s crazy talk!

    But why not? There is a wealth of knowledge in this town, and skills to go with it.
    We’re blowing what? 50mil or something on the upgrade of some council building that really doesn’t need it. I wonder what we could do with that in the right hands when it comes to R&D?

    Electric cars spring to mind as one thing with a long way to go and are going to be the future…..
    I better add, pet subject of mine, keep getting shouted down about my idea’s on them, then months/years later those same ideas are proved right ;)
    Or maybe windmills. We bought them from overseas, but god only knows why. We should be leading the world with things like this.
    Then we have chopper pilots going around the world doing pest control.

    A big pot of resources in this town, someone just needs to take the lid off it.

  6. Elizabeth

    Deals worth as much as $150 million are already in the pipeline for some Auckland businesses following the Rugby World Cup.

    ### idealog.co.nz Wed 9 Nov 2011 at 11:29 am
    Venture
    Rugby World Cup spawns investment deals aplenty
    By Idealog
    Auckland Tourism, Events and Economic Development aimed to use RWC 2011 to make international business connections and showcase investment opportunities in Auckland, and ATEED business and sector development general manager Clyde Rogers said it was encouraging to see some significant negotiations already on the table. ATEED’s investment showcase programme featured events that showcased Auckland’s priority sectors – marine, food and beverage, health technology, screen, creative and ICT – and highlighted the country as an innovative business hub.
    Read more

  7. Elizabeth

    ### idealog.co.nz 29 Nov 2011 at 2:26 pm
    Venture
    Ministry boosts funding for R&D internships
    By Idealog
    An extra 140 undergraduate students will be carrying out state-funded research and development projects for New Zealand businesses this summer. Science and innovation minister Wayne Mapp said demand for the MSI’s undergraduate internships programme was so strong, 341 internships would be awarded instead of 200. Funding for the annual programme, which provides funding of $16 per hour (excl. GST) for up to 400 hours of work by a student, has increased from $1.28 to $2.4 million.
    Read more

  8. Elizabeth

    ### idealog.co.nz Mon 26 Mar 2012 @ 9:15 am
    Farewell, Sir Paul Callaghan
    By Esther Goh
    Tributes are flowing in for Professor Sir Paul Callaghan, who passed away aged 64 at his Wellington home on Saturday, March 24, after a battle with colon cancer. A website has also been set up in memory of New Zealand’s most public and most recognised scientist for messages of condolence at paultcallaghan.wordpress.com. Back in 2010, Callaghan told Idealog the only thing that could ‘save’ science was good science itself.

    “I walked into Tait Electronics the other day. They have wonderful machines producing six-layer printed circuit boards, which make fabulous electronics that are exported around the world. I find that sexy. Am I strange? I don’t know. But what turns people on is the fact that smart New Zealanders are making things that are up there with the best in the world..”

    He was optimistic about the next generation of Kiwi scientists, but challenged his long-time colleagues to lift their game.
    Read more

    • Elizabeth

      ### idealog.co.nz Monday 23 Apr 2012 @ 9:42 am
      Venture
      YouTube cofounders’ new company establishing Dunedin office
      By Esther Goh
      Avos Systems, a company led by led by YouTube cofounders Chad Hurley and Steve Chen, is setting up shop in New Zealand. Avos is headquartered in San Mateo, California with offices in Beijing, China and is now advertising for a visual designer in Dunedin with a qualification from a “top university” and three-plus years of experience to work on end-to-end user experiences.
      Read more

    • ### ODT Online Wed, 12 Jun 2013
      Top award has F&P cooking
      By Dene Mackenzie
      World-class work from Fisher & Paykel Appliances designers in Dunedin has won a global award and the winning product, a built-in oven, is one of 70 products being launched today by the company. The success of the products, and the scale of the design work being done in New Zealand, may mean extra research and development (R&D) staff being employed in Dunedin and Auckland. F&P product development executive vice-president Dan Witten-Hannah said in an interview the focus was on establishing the company’s New Zealand operations as the R&D ”centre of excellence” for the group worldwide. F&P is now owned by Chinese company Haier.
      Read more

      (our emphasis)

      • ### ODT Online Thu, 13 Jun 2013
        Editorial: The primary industry powerhouse
        Governments have tried over the years to steer attention away from New Zealand’s primary industries as being the powerhouse of the economy.
        As examples, tourism has been accepted as a large earner of foreign exchange, and with a prime minister serving as tourism minister, the spending ploughed into promoting New Zealand as a destination has increased. Sir Peter Jackson and the Weta Workshops have for some time now been used as illustrations of what clever New Zealanders can achieve. And the phrase ”knowledge economy” has been bandied around for a generation as ministers of the Crown promote learning and technology as a way of breaking down the barriers of distance for New Zealand.
        All of this has worked. News from Fisher and Paykel Appliances this week showed how top scientists, engineers and designers have combined their talents in Dunedin to produce a global award-winning oven. The company has called for more money to be spent training scientists, engineers and designers – and less to be spent on accountants, lawyers and arts students.

        But humming along in the background, as they always have, are the primary industries. This week, we learnt they contribute to the economy about $30 billion a year in exports.

        …Society cannot call for farmers to restrict their use of nitrates and preserve waterways without giving them skills and options to do just that. The challenge for the primary industries is to develop resilience – to protect farmers’ ability to continue to produce and export, as well as add value. Primary industries will long remain a powerhouse of the New Zealand economy. Although increasing the earnings of our other industries is crucial to attracting and retaining our brightest graduates, as a country, we need those vital skills – and retention of the country’s best and brightest – in our primary sector. Not to do so would undoubtedly jeopardise the future wellbeing of New Zealand.
        Read more

    • ### ODT Online Sat, 28 Sep 2013
      Great boost for Dunedin
      By Sally Rae
      ”A great story” for Dunedin’s manufacturing sector is how Milmeq chief executive Mike Lightfoot describes the awarding of an $A18 million ($NZ21.7 million) contract to provide processing technology to a new beef plant in Australia’s Northern Territory.
      The company, which manufactures in both Dunedin and Auckland, will provide the $90 million Livingstone Valley facility, being built by the Australian Agricultural Company about 50km from Darwin, with all its processing equipment. That includes boning and slaughtering processing equipment, refrigeration, air conditioning and chilling and freezing systems, along with operations for materials-handling and palletising.
      Work would begin on the site next month, with the plant scheduled for completion in mid to late 2014.
      Read more

  9. Mike

    It’s a small world guess who’s house Alex is buying …

  10. Mike

    Oh not me – he did ask about all the swords ….

  11. Hype O'Thermia

    You’ve got me curious. Swords without bloodstains. That would rule out backstabbers. Someone well-known apparently but could be anyone else, since there is no tradition of Dunedin people who cause major cockups and get found out falling on their swords.

  12. Anonymous

    Very small world, it’s up the corridor from my office.

  13. Elizabeth

    “It’s a global company and you see their [ADInstruments'] equipment all around the world. I’ve seen one in every lab I’ve visited and worked in. It’s great to see something that was born out of the physiology department in Dunedin.”

    ### ODT Online Sun, 12 Aug 2012
    Dunedin invention goes up in world
    By Nigel Benson
    A Dunedin invention has scaled new scientific heights on Mt Everest. University of Otago researchers recently conducted experiments with the ADInstruments PowerLab on the world’s highest peak, to measure the effects of altitude on human health. The international scientific expedition involved researchers from six countries spending six weeks at the Pyramid Laboratory, near the Everest south base camp, at an altitude of 5400m, University of Otago research fellow Dr Sam Lucas said yesterday.

    The results were logged on a device created in Dunedin, called the PowerLab data acquisition system, which converts electrical signals from living matter into digital data. The $10,000 PowerLab was developed in the University of Otago physiology department to supersede old paper chart recorders and is now used worldwide in universities, hospitals, research institutes, pharmaceutical companies and private industry research sectors.

    Read more

  14. ### ODT Online Mon, 4 Mar 2013
    Editorial: Right direction for Dunedin
    Fisher and Paykel is a name deeply entrenched within the history of Dunedin and the surrounding districts. The company, which made appliances on the Taieri, employed thousands of local people over decades of production.

    It was particularly pleasing, therefore, last week when Fisher and Paykel Appliances announced it was expanding its Dunedin and Auckland operations. The company, now owned by the world’s largest appliance manufacturer – China’s Haier – is creating 100 research and development positions as well as further jobs in other parts of the company. The expansion of specialist skills will entrench the company’s expertise.

    Already, the company employs more than 100 highly skilled research and design staff in Dunedin. Now, not only will their numbers be swelled significantly over the next two years, their expertise will be used by the wider Haier group, along with other appliance manufacturers seeking the very best technology available.

    In the next few months, Fisher and Paykel Appliances will be releasing the largest number of new products at any one time in the company’s 79-year history. These products include new refrigeration, cooktops, a new oven platform and new laundry products.
    Read more
    http://www.odt.co.nz/opinion/editorial/248031/right-direction-dunedin

  15. ### ODT Online Wed, 1 May 2013
    Need for diversification identified
    By Dene Mackenzie
    The need to diversify Otago’s economy was clearly identified in a report released yesterday by Economic Development Minister Steven Joyce, Otago Chamber of Commerce president Peter McIntyre said. While welcoming the Regional Economic Activity Report, Mr McIntyre said it identified how reliant Otago was on the Government for jobs through the health and education sectors. ”We need to diversify where we can while still maintaining our strong links with those sectors. It is important to take advantage of other opportunities which we come across.”

    Mr Joyce said the regional report pulled together for the first time in one place the available economic data on all regions. It provided a breakdown, at the regional level, of some of the specific initiatives the Government had under way in its Business Growth Agenda. “The report is designed to encourage more debate about what it takes for a region like Otago to be successful and to more clearly link the decisions that are made by local stakeholders about resource allocation and usage to the number of jobs available in a region.”

    Otago-Southland Employers’ Association chief executive John Scandrett said there was a wide range of material in the report and, as expected, there were positive and negative aspects. In Otago and Southland, the good news was that the region was placed above the national average on employed share of working age population with Southland heading the country by a considerable margin. But in both provinces, household annual income levels trailed the $80,000 national figure, he said.
    Read more

    Otago is the second-largest region in New Zealand by land area and accounts for 5% of New Zealand’s economy in employment terms. Its household incomes are lower than the national average but its employment rate is above the national average. These factors relate to the very high proportion of tertiary students in Dunedin, some of whom work part-time, and the significant presence of seasonal labour in other parts of the region.

  16. Hype O'Thermia

    “…household incomes are lower than the national average but its employment rate is above the national average…” so it’s vital we do more to encourage tourism with its peon-wage casual seasonal jobs – right? Diversifying from health & education being real important eh. Actually finding more opportunities for health & education, and health education, branches & sprouts would work well because they, like the range of computer-associated work, benefit from being in a cross-fertilizing, idea-sparking, loosely collegial hub.

  17. Mike

    I don’t know how many times I’ve tried to make the diversification argument on the ODT site – no one giant hotel or rugby stadium will save your bacon – lots of little companies will, some will grow and probably most will fail – but we need to keep replacing things like F&P that leave and you can’t make new giant companies out of whole cloth, you have to start small and grow them. As I said most new companies fail, big ones fail bigger.

    So we need hi-tech companies, and ag-support companies, and more small engineering, and yes tourism companies, and bio-tech companies, fashion and design houses, and whatever else we can encourage bright smart people to do – especially companies that make things or services and export them out of the region – the trick is to encourage them to start here rather than Auckland and to stay, and to make it easy to start on the smell of an oily rag – I’ve always said the space where the stadium is ought to have been an R&D park in walking distance of the Uni.

    • Of course. I’m a believer from way back (comes from experience in exporting).

      Remember only a very VERY small percentage of Dunedin companies have given any thought to export – bloody abysmal.

  18. Mike

    Doesn’t have to be export from NZ to create local wealth even exporting to the rest of NZ brings wealth into our community.

    The thing we shouldn’t work hard on (despite what this article says) is supporting the local service industries (lawyers, retail, entertainment etc) they don’t bring more wealth in to grow our economy, if we need them they’ll appear as a result of the rest of the economy growing. Better to focus on companies that will bring new wealth.

  19. ### ODT Online Tue, 25 Jun 2013
    Toxinz may gain US sales tonic
    By Simon Hartley
    Subscriptions to the life-saving database painstakingly built up by New Zealand’s National Poisons Centre in Dunedin during the past 50 years go on sale in the United States this week. Those sales could provide millions of dollars for further research and development.
    Award-winning Toxinz, which represents the poisons centre’s database for sales, already provides 250 subscriptions, worth hundreds of thousands of dollars, to hospitals and other centres throughout Australia, Canada and Singapore.
    Through the World Health Organisation, Toxinz supplies the database free to 110 developing countries, while some subscriptions cover a provincial government’s entire hospital system.
    The University of Otago’s commercialisation company, Otago Innovation, is operating global subscription sales of the Toxinz database. The university continues to operate the separate National Poisons Centre, which is part-funded by the Ministry of Health.
    The Poisons Centre now has 190,000 items on its database, ranging from poisonous industrial chemicals and pharmaceuticals, to snakes, household products and mushrooms, Otago Innovation chief executive Colin Dawson said.
    Read more

    ****

    (via ODT) On its KiwiNet win, a judge noted Toxinz was a ”case study” in monetising previously undervalued assets”It illustrates that simple ideas are often the best ideas, and how you are able to derive great value from data,” the judge said.

    Other KiwiNet Research commercialisation award winners:

    • Commercialisation collaboration award: Callaghan Innovation – Ovine Automation Consortium.

    • Researcher entrepreneur award: Profs John Boys and Grant Covic, electrical and computer engineering department at the University of Auckland.

    • Research and business partnership award: Callaghan Innovation – Advanced Sonar Technology.

    • People’s choice award: AUT – Growing the New Zealand surf clam industry with the Cloudy Bay Group.

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