Rt Hon Helen Clark
Prime Minister of New Zealand
Hon Steve Maharey
Minister of Research, Science and Technology
Hon Trevor Mallard
Minister for Economic Development

21 August 2007 Media Statement

OECD report highlights innovation policy

A government-commissioned OECD report finds New Zealand has many of the conditions needed to encourage innovation and entrepreneurship, including a favourable business environment.

Prime Minister Helen Clark today launched the report ‘OECD Review of Innovation Policy: New Zealand’ with Research, Science and Technology Minister Steve Maharey and Economic Development Minister Trevor Mallard, to representatives of the business and science sectors.

The report points out notable areas of strength in innovation in New Zealand, as well as some challenges. It says the ‘knowledge and skills of the population represent its most important asset’, highlighting our unique Kiwi ingenuity and creativity.

The OECD cites Zespri as an example of outstanding research success in New Zealand’s strong natural resource sector. The report describes the gold fleshed kiwifruit developed by HortResearch for Zespri as an ‘innovative breakthrough’.

The report also highlights pockets of success in the fast-growing creative and software industries, with Weta Workshop, Chain Mail, and Animation Research as examples of innovative companies in the film production and ICT sectors.

Prime Minister Helen Clark says the report provides a valuable international perspective and its recommendations are already being addressed.

"Innovation is a key driver of productivity and critical to New Zealand's economic transformation. The Labour-led Government believes strongly in the need to support and develop our innovation system. This report provides a valuable insight into how New Zealand companies can become more internationally competitive.”

The OECD report points to challenges facing New Zealand, including insufficient broadband infrastructure, low business spending on research and development, and some shortcomings in the diffusion and absorption of technology.

Research, Science and Technology Minister Steve Maharey says the feedback from the report can help improve policy, "although the government has already introduced policies to meet some of the challenges which the report has highlighted.

"For example, Budget 2007 introduced tax credits to encourage businesses to invest more in research and development. This is a serious commitment from the Labour-led Government of more than $630 million over the next four years.

"We are also implementing the New Zealand Digital Strategy and local loop unbundling to provide wider access to broadband. We have reduced uncertainty for Crown Research Institutes by providing them with more stable funding and by emphasising their critical role in working on the application of their research with industry," Steve Maharey says.

Economic Development Minister Trevor Mallard notes that the OECD also recommends better co-ordination of government support for research and development-based industries.

“That work is already underway. Following a review of business assistance programmes, the Labour-led government is aligning activities across the Ministry of Economic Development, the Tertiary Education Commission and Ministry of Research Science and Technology.

“The environment for innovation has also been strengthened through the government's Venture Investment Fund, an additional $87.8 million in expanding export marketing assistance programmes, and $6.3 million in Beachhead support which provides top level expertise to Kiwi firms in key offshore markets.

"Businesses succeed through a culture of innovation, adaptability and risk taking. We need great inventors with great ideas, and ways of transforming those ideas into products and processes that will make a difference to our economic development," Trevor Mallard says.

Trevor Mallard says further work is underway to address the reviews recommendations, including the development of an innovation policy strategy.

The ‘OECD Review of Innovation Policy: New Zealand’ report was jointly commissioned by the Ministry of Science, Research and Technology (MoRST) and the Ministry of Economic Development. Further work is underway to address its recommendations.

The report is available in hard copy from the office of Steve Maharey or MoRST.

ENDS

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