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The Government’s Vision For Science And Technology

THE OTAGO INSTITUTE OF THE ROYAL SOCIETY PUBLIC LECTURE SERIES, HUTTON THEATRE, OTAGO MUSEUM, DUNEDIN

HON PETE HODGSON
MINISTER FOR RESEARCH, SCIENCE AND TECHNOLOGY

It is a pleasure to have been invited “back home” to give my first extended speech in the Research, Science and Technology portfolio.

It is an exciting portfolio, one that I held in opposition when I first entered Parliament nearly 10 years ago. Back then I seized the opportunity to quietly tour New Zealand for a year visiting research sites, talking to scientists and inevitably getting into debates on science policy. I am a veterinarian and failed amateur marine researcher myself so the big words have never bothered me. Nor has scientific method, scientific uncertainty or scientific debate. I thrive on it.

Science policy is a different matter. It’s hard. It has a logic and basis which is ambiguous, contradictory and changing. Its economic underpinning is fairly robust, at least by the standards of economics, but understanding the innovation system or the details of technology transfer, or intellectual property, or “learning by doing”, or how information becomes knowledge much less wisdom is pretty much in the eye of the beholder.

So much so that after a year I went to my leader and protested that I loved my portfolio, but I couldn’t understand it. Mike Moore replied, “If ever you can’t understand something you must write a book on it”. I left his room feeling confused, thought about it for week or two and over the following three months did just that. It was, and remains, an unpublished mess. But it helped me immensely to sort through the threads of academic thinking on science policy.

I became comfortable with the topic then inspired by it. I still am.

In recent years the importance of R&D has become well understood amongst my colleagues. As a group we are alert to its importance. We are alert to it because we are starting to describe our nation as in need of transformation.

I want to use this opportunity to outline our Government’s vision for science and technology. I assure you that this Government wants to be actively involved in the transformation of the nation’s economy.

That’s a bold aim. Transformation is not a word to be used lightly, but tinkering will not do.

Transformation means moving New Zealand beyond its traditional dependence on the primary industries for the generation of wealth. We are extremely good at primary production and processing. It is a vital part of our future and we continue to post remarkable productivity increases. But it’s not enough. The knowledge economy is already a cliché, but the basic premise is sound nonetheless: wealth is increasingly taking the form of knowledge rather than stuff.

So what is this Government’s vision for science and technology? Let me take a couple of minutes to paint you a picture.

It’s 2010 and New Zealand’s investment in research and development is at an all time high. Government investment has finally reached 0.8% of GDP and investment by the private sector has more than tripled from its level of 0.34% at the beginning of the decade.

We have successfully defended the Americas Cup another three times. Our expertise in marine technology has reached such a level that many nations are now contracting our research organisations to get access to some of the technologies that have been developed.

Our New Zealand researchers and technologists are strongly connected into the global community. We have overcome the limitations of our small research base by building a number of strategic bilateral relationships with key players.

An eminent New Zealand microbiologist has just been announced as the winner of the Nobel Prize for Science. She was awarded this for the ground-breaking research that resulted in the creation of an anti-cancer agent. This agent was derived from one of our unique native flora species.

As a result of the initial breakthrough, which happened needless to say at Otago University’s Innovation Centre, international biotechnology companies are competing to relocate their research facilities to Dunedin – now a recognised global cluster point for medical biotechnology.

As a result of these and many other achievements by New Zealand scientists, technologist and innovators, science and technology have been embraced as the engines of health, wealth and prosperity by New Zealanders. We have, at last, developed a culture that values and rewards innovation.

To make this vision a reality the Government needs to take action. We need to become a leader, a facilitator, a broker, a partner and an investor in the innovation system.

In this speech I want to outline three areas where the Government’s priorities lie and expand on them. Then I wish to dwell on three issues of the day that are topical and important components of the work plan we have to turn that vision into reality. Those three issues are the Royal Commission, the Biodiversity strategy and the new Science and Innovation Advisory Council.

But first the issue of priorities.

My main job is to lift our public investment in research and development to 0.8% of GDP by 2010. We hope to be the Government for much of that time so you are welcome to monitor our progress carefully. There are three areas I want to address as investment priorities.

First, we need greater levels of private sector involvement in research and development. In this area I intend to encourage partnerships between researchers and the private sector by supporting the work of Technology New Zealand and by converting the results of academic and industrial research into value added export opportunities.

Secondly, I want to unleash the creativity and imagination of researchers by better supporting New Zealand’s basic research base. This is currently funded through the Marsden and New Economy Research funds. Building our international linkages will also be vital if we want to access the ever-growing global pool of knowledge.

Thirdly, I want to ensure that the range of activities undertaken in the strategic research area is maintained and in some areas increased, and to signal some changes which I hope will help us achieve our vision.

The first area that I mentioned in my outline is the need to encourage the private sector to invest greater amounts in research and development.

There is no ducking the fact that overall, New Zealand’s total R&D expenditure as a percentage of gross domestic product is only half the average for countries in the Organisation for Economic Co-operation and Development.

The Government will do its part to improve this by restoring the target of raising public funding of R&D to 0.8% of GDP by 2010. Getting public funding back on track to this goal should send a powerful leadership signal to the private sector.

Private sector investment is very low by international terms, about one quarter or on a good day one third of the western world average.

To give business a more conducive environment for investment we have some specific measures in mind, such as investigating R&D tax issues, reviewing the cost to small business of protecting intellectual property and, perhaps most immediately, strengthening Technology New Zealand.

The Government also proposes to establish a small business research fund, open new venture capital avenues, examine barriers in accessing development finance, examine issues around capacity building and on it goes. These issues that I mention fleetingly are about economic development, industry development, regional development, small business policy and policy concerning Trade New Zealand. They are all part of the drive to transform the New Zealand economy, and they are portfolio areas that I am involved with.

They are not to do with R&D per se, but they are so closely related that I will wander across the boundaries a bit as I go.

My Government is determined to support business investment in R&D, rather than just complaining about the lack of it.

Part of this process is about acknowledging the businesses that are already out there and doing it. Here’s an example.

I re-acquainted myself last Saturday with a Dunedin-based company, Swing Thru International Ltd. Swing Thru is a company that is lifting the lid on a new container handling system whose revolutionary technology has drawn interest from around the world.

The innovative technology used by Swing Thru allows shipping containers to be loaded from either side of the host vehicle. The idea began five years ago when company founder, Ross Simpson, was challenged by the transport industry to devise an improved method of moving containers.

This project received support from the Technology New Zealand scheme. Without this support Swing Thru would likely not be in the enviable position that they are in today.

Technology New Zealand needs more support from Government. Expenditure in this scheme in past years has increased and credit needs to go to the previous government for that. But it has not increased significantly and this Government is committed to seeing that happen.

Government involvement is not just simply about pouring money into the system. There is a need to help firms to make connections with overseas markets, with universities and CRIs and with other firms with similar or complementary interests. That’s why we talk about the development of regional clusters.

That’s why on Monday the Government announced an incubator support programme, designed to oil the wheels of the many incubator or innovation centre initiatives now springing up around the country, including the innovation centre across the road.

The second area I mentioned in my outline is the need to expand New Zealand’s knowledge base. A critical part of this processes is to build a solid science and technology human capital resource. Science is much more about human capital than financial capital.

The sciences no longer automatically attract our best young people as they move through the education system. Nor does New Zealand hold a strong enough attraction for the brightest of our scientists, who leave in ever-increasing numbers for better positions overseas. But there is nothing inevitable about either of these facts. There are things the Government can and will do.

Increasing the recruitment and retention of talent for science must begin with the education system. In schools we aim to increase the number of teachers of mathematics, science and technology by offering bonded scholarships for these teachers. In the tertiary sector we will be negotiating adjustments to the funding model to cultivate centres of scientific and technological excellence. We will also use scholarships to attract and retain postgraduates in research areas where there are skill shortages.

Scientists need to know that the Government recognises the importance of basic research as the serendipitous source of the truly new. It underpins the integrity and progress of society. Our approach to tertiary education acknowledges the universities’ vital role, with a continued commitment to funding research as part of teaching.

The New Economy Research Fund unleashes the creativity of scientists to do some out-of-the box thinking about how tomorrow's wealth will be created differently from today's. It will generate new ideas as the basis for new industries and for R&D intensive industries emerging from existing sectors. The potential for creative leaps is exciting. The inaugural round of funding was announced two weeks ago today.

Successful projects included research to explore vaccines to prevent Alzheimer’s disease and asthma; research focused on creating the next generation of communications technologies; research exploring opportunities for smaller, smarter electronics; and innovative electronic-based learning techniques. This Fund is a step in the right direction but with only $11 million dollars of new money going into this fund it is at the smaller end of the scale.

I think the most significant result from the recent bidding process was the sheer number of bids that were received. The Foundation for Research, Science and Technology received more than 200 applications for funding from the New Economy Research Fund, requesting some $100 million. With just $11 million available it would appear that there are many good ideas that will not get funded. My Government is committed to increasing the New Economy Research Fund over time.

The Marsden fund supports the curiosity of creative individuals who want to understand why and how things work in our natural, physical, social or cultural world. One example of a recent Marsden sponsored breakthrough is the work that was done by a team of Auckland-based researchers. These scientists are taking us a step closer towards confirming the existence of a mystery homing sense in rainbow trout. Another example is the new findings from a pioneering early learning research project at Otago University. This research is challenging many fundamental assumptions about the way infant learning and memory develops. This government is committed to growing the Marsden fund over time. This type of curiosity-driven non-strategic research is a vital part of our overall set of science portfolio investments.

The emerging global economy provides perhaps the greatest opportunity for New Zealand to tap into the global knowledge base. We shouldn’t lose sight of the fact that we currently only carry out around 0.13% of the total global investment in science and technology. That means that there’s 99.87% that we don’t do!

In order to gain access to this global knowledge base we need to build our networks and develop collaboration opportunities. Overall we need to improve the ability of our scientists and technologists to tap into the global knowledge base.

In order to build an inclusive, innovative economy we need to make a commitment to building a strong knowledge base. We also need to commit to developing the human capital needed to drive this knowledge base. And we need to grow our international networks. My Government is committed to increasing investment in these areas. Watch these spaces over the next three years.

The third area that I mentioned in my outline is strategic research. This is the most important part of the Government’s investment, for the simple reason that it is the largest. Several comments are pertinent.

For starters the Foresight Project, for all its perceived and actual shortcomings, has delivered a potentially significant redirection of research, particularly in the Crown Research Institutes. This is the process by which existing research has been redirected into the New Economy Research Fund category for future years. In summary, and perhaps simplistically, strategic researchers have responded very positively to the challenge to find research opportunities which may involve basic research skills but which nonetheless are directed from the outset towards a specific commercial or knowledge outcome.

Currently strategic research is poorly evaluated. The quality of the research is not in question but quite what, for all these hundreds of millions of dollars, is the taxpayer buying? Fear not – we are not about to subject New Zealand Science to a crude cost/benefit analysis. The bean counters have not been let out of their cage. But evaluation of the strategic outcome for New Zealand rather than just the scientific outcome of this very significant investment needs to be improved.

We need to address that.

I want to touch briefly on the issue of social research, because I shan’t have a chance to elsewhere. This is a difficult area for me, and I think for all of us. The three problems are insufficient academic depth, insufficient public engagement and insufficient co-ordination. The three problems are of course inter-related. They are however resolvable. From my end I have an obligation to produce systems that allow for researchers to better co-ordinate their efforts, be it operational research within the silos of departments of state, academic research in universities or social research now being more actively contemplated by industry, especially primary industry. I don’t yet know how to do that. If you do, let me know. Be it the aetiology of poverty, issues surrounding the sociology of the digital divide or a co-ordinated response to youth suicide there is work to be done in co-ordinating our nation’s effort.

I believe that if we can have a better co-ordinated approach to social research we can look forward to resolution of academic depth and insufficient public engagement. Why, for example, is no-one talking about a science strategy on marijuana policy options or the social effects of plantation forestry.

So that’s once over lightly on investment priorities. I have placed emphasis on using public investment to increase private investment, on ensuring that our basic research base is rendered adequate, and on ensuring that the integrity of our strategic effort is maintained and better evaluated.

I want to now turn to three issues of immediate priority that you will be aware of, or should be made aware of. These are the Royal Commission, the Biodiversity Strategy and the Science Innovation Advisory Council.

The Royal Commission on genetic modification will kick off soon and the reason we are having it is two-fold. The first reason is that the progress of science has outstripped the progress of values definition, cultural consideration or the debate on ethics. The second reason is that, because of the first reason, the public at large do not trust aspects of the technology and consumers are asserting their sovereignty stridently.

It is utterly vital that our nation manages this debate in an honest and tolerant manner. There are issues that are well defined, and issues that are ill defined that need to be addressed. If they are addressed in a reasoned and reasonable way then the outcome, whatever it is, can be decided by us as a society, peaceably.

No-one has the franchise on wisdom in this debate.

Everyone knows that genetic engineering has a place in our society and everyone knows that, like any other technology, it has its societal limits. We need to find them. I think it is time to remind ourselves of the term “appropriate technology”.

Let me give you two examples to illustrate the sort of decisions we need to weigh up. In both cases the issue is perceived risk versus potential benefits.

The first is the field trials of GM canola crops to this country. In recent years we have seen a number of applications for field trials of GM canola. Canola is not an important crop in New Zealand and is one of the more risky species to grow, with pollen that has the potential to be spread by wind and bees. It can cross with weedy relatives and has small seeds that are viable in the ground for up to five years. This type of GM trial is one that offers New Zealand little opportunity and a degree of risk. We have to ask ourselves as a nation, do we want such genetic engineering technology in New Zealand?

On the other hand there are genetic engineering technologies that offer New Zealand high economic and medical benefits, with zero or low risk. The production of human pharmaceutical proteins is an important and growing biotechnology industry. PPL Therapeutics has developed a transgenic sheep with a human gene that produces a valuable pharmaceutical product, human alpha-1antitrypsin (hAAT), in their milk. This product has important medical benefits and is being developed and clinically trialled in the Waikato region for the treatment of cystic fibrosis. There are also significant downstream opportunities for applying this technology to other applications should this trial prove successful.

We will come, I hope quietly and reasonably, to a worthwhile and legitimate decision on this issue in the near future.

The second issue I want to touch on is biodiversity. Our biodiversity strategy will significantly strengthen, and partly redirect, our environmental science capability. Science strongly underpins policy in these areas.

No science: no strategy.

Of course our nation’s environmental science is already in good shape and makes the development of a biodiversity strategy relatively straightforward. But there are gaps. In particular I see these as gaps in state of the environment reporting, in marine science, and gaps in biosecurity issues on the land and in the water.

Our strategy seeks to address those gaps and a few others as well. It is currently the subject of budget negotiations so I shall refrain from giving further detail. However detail is likely to emerge well before the budget in June.

The third and final contemporary issue I announced on Monday. It is the establishment of the Science and Innovation Advisory Council.

The idea of the council met with a great deal of enthusiasm during the election campaign. The door has been closed for so long that there is obvious relief at its opening. We have chosen the door to the Prime Minister's office for the simple reason that it is the surest route to results.

The inclusion of "innovation" in the council's title is significant. We do not seek a committee of eminent scientists. Instead we seek original and creative thinkers, people with the ability to draw together all the elements that combine to create innovation in New Zealand and identify how these can be best applied to create a future that benefits all. People with vision. People who are wise. If those people happen to be eminent scientists, well and good. Indeed if our eminent scientists do not have amongst their ranks people with the qualities we seek I would be very surprised indeed. I look forward to receiving a whole bunch of excellent nominations.

Now it is time for concluding remarks

I have two.

The first is that you, as scientists, have an obligation to liaise.

The second is that I, as Minister, have an obligation to promote.

Your liaison should be with commercial interests, with international peers, with other New Zealand research institutions, and with the public.

My promotion should be with New Zealand industry, with other Governments, towards a more co-operative framework between New Zealand research institutions, and with the public.

Why all this liaison and promotion? Because interactivity is the prize. And because interactivity is the future. If there is any scientist left in this country who believes that science funding exists for them, personally, and not for the knowledge they create and its appropriate transfer to the business community, the policy community or the public would they kindly go outside and retire.

If ever a responsible Minister, present or future, is caught dealing with this portfolio in a bored or flaccid manner, kindly arrange for their personal defeat at the next election.

Remember the idea of an innovation system, and see yourselves as active interactive players in such a system. Please never forget that. Only by building and nurturing a multiplicity of links will we develop the fabric of a society that values innovation and science to the extent that it should.

I am honoured to be the Minister for Research, Science and Technology. I am lucky to represent this particular electorate and the intellectual horsepower within it. I am lucky too to be part of a Government that wants New Zealand to be “on to it” – a lot.

Thank you.

ENDS

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