Joyce: Asia Pacific Science Policy Studies Conference

Hon Steven Joyce

Minister of Science & Innovation
9 February 2011 Speech
Address to Asia Pacific Science Policy Studies Research Conference, Wellington

Thank you for the introduction Steve. It’s a pleasure to be here this morning.

I’d particularly like to acknowledge our international guests, including:

• Professor Helga Nowotny from the Swiss Federal Institute of Technology

• Professor Roger A. Pielke Jr from the University of Colorado, and

• Professor Brian Wynne of Lancaster University.

I’m going to take the liberty of this being my first speech in the Science and Innovation space to place the sector in the context of the challenging economic times that the world is facing and where I see Science and Innovation fitting in and helping to meet those challenges.

And I want to say up front that this speech does not cover the whole spectrum of science policy and issues and I’m not intending to do that today.

From a political perspective, the Government is here today I believe more than for any other reason because New Zealanders decided last year that we would do the best job of setting our country up for stronger economic growth.

Then that begs the question which is how do we achieve that. How do you get economic growth?

And the simple answer is by getting businesses that live in New Zealand to grow.

When businesses grow, they sell more stuff to the world, which earns the country more money, and they employ more people which keeps us all in jobs, and the businesses and the people pay taxes that cover the cost of public services that we value.

Businesses depend on six key things:

• Customers who want to buy the product

• Skilled people to work in the business

• Access to raw materials

• Access to capital to grow the business

• Public infrastructure that the business depends on

• And, very importantly, the entrepreneurial spark, the ideas and innovation which create the business opportunity

It’s innovation I want to focus on today – and the role of science policy in innovation.

Innovation is a wonderful thing. It is innovation and its close cousin invention that has driven the improvement in our quality of life since the Stone Age.

Innovation is the new idea, the new product, the new approach, the new system, that allows something to be done that couldn’t be done before, or done in a new way which greatly reduces the cost of doing it.

Above all else – it’s innovation that is the key to business success.

If you have useful innovation, you will have a ready market, you will access the capital, you will be able to hire the skilled people, you will be able to more efficiently use resources, and you will be able to base yourself where the infrastructure can support you.

So it stands to reason that if we want faster economic growth for our country and – frankly in the world – then innovation is crucial.

The trouble with innovation is that it is not a straight-forward process. You can’t add money and stir and voila – innovation occurs. It is driven by individuals, by curiosity and sometimes it is accidental.

So how does a government encourage something which is often so intangible when it first occurs; how does government encourage innovation?

Well, in a whole range of ways, some of them not immediately obvious.

There are policies that can encourage, and alternatively discourage, entrepreneurs.

There are policies that can encourage, or discourage, curiosity and discovery...but I get ahead of myself.

Broadly, government innovation policy covers a range of areas:

• Education and training systems that develop the skills for innovation, at universities, polytechnics, private institutions, and in on the job training

• Fostering an entrepreneurial culture across the country

• Providing funding to encourage public research, and encourage strong well-governed institutions in which it can take place

• Provide policies and incentives that encourage business research

• Ensuring good competition policy – competition is one of the strongest catalysts for innovation

• Encourage the strong flow of knowledge, and an effective system of intellectual property rights

• Ensuring the right infrastructure is in place that facilitates innovation – especially ultra-fast broadband networks

• Encourage innovation across the public sector to enhance the delivery and efficiency of public services

• Improve international linkages and encourage innovation in some of the global challenges that the world is facing

• And evaluate innovation policy carefully so that you can be sure you are using the public funds in which you are entrusted wisely.

The Prime Minister has tasked me with further developing our innovation policy, and I will be working closely with relevant ministers in this crucial catalyst of New Zealand’s economic growth story.

Scientific Investigation is without doubt a key part of the innovation story. It’s not the whole story – not least because without some of the key things I mentioned earlier, the impact of science is diluted - but it is crucially significant.

And even more so for government because government is such a major player in the science space. The reality is much scientific endeavour is too “early stage” for it to be successfully funded by private industry – so it becomes publicly funded.

New Zealand has been very active in science policy over the last three years under my predecessor Wayne Mapp:

• New Zealand now invests $2.4 billion a year in R & D

• Of that, the Government contributes a very significant amount. In fact it’s often talked about how business R & D is not as much as it should be

• There has been a very significant increase in public science investment through the Ministry of Science and Innovation from $650 million in 2008 to $773 million this year.

• The Government also established the Primary Growth Partnership with industry to drive innovation and boost the economic growth and sustainability of New Zealand’s primary, forestry and food sectors. Close to half a billion dollars has been invested so far.

• On top of that, in 2009 we established the Global Research Alliance providing $45 million to tackle greenhouse gases emissions from agriculture

• There has been an overhaul of investment in CRIs

• And we have sought to simplify the plethora of government agencies operating in the science and innovation space, by merging MoRST and ForST into MSI

Over two of those three years, I have been the Minister of Tertiary Education; and the tertiary sector of course is a very significant part of the science system

So it is I think a tremendous opportunity that I have been given, and in fact we have all been given by the PM in linking together not just the science and innovation and tertiary, but also the economic development portfolios.

Already, after a few weeks, for example, I find myself thinking how hard it is to see how government could ever consider the tertiary sector as separate from the rest of the science sector

So what is that opportunity?

The opportunity is to leverage this small country’s investment in science and innovation to maximum advantage, whether it be in education or in the wider economy

I’m determined to take advantage of that opportunity

Over the summer I have done a lot of research and reading

Much of that was down to the abysmal Auckland weather which encouraged me to stay indoors and read.

Before the Summer break I asked my respective departments to provide me with two or three items of extra reading that they thought would be useful to me. Some like MED stuck to the brief, while MSI gave me a pile the height of a small child!

I’m not ready yet to lay out all my thinking – but I think there are some high level questions we have yet to fully answer:

• Are we organised effectively to achieve the best possible outcomes from our investment?

• Is our science system easy enough for participants and potential participants to understand?

• Are we investing our funding in the right parts of the innovation chain?

• Are our funding systems too complicated?

• Are we set up well for translation and commercialisation of scientific insights into the commercial world?

• What is stopping our business R & D from growing more rapidly? Is it the normal public policy issues or is there something else?

• Are the incentives in the right places to encourage commercialisation and innovation?

• And are we taking advantage of our smallness? Are we using our size to advantage by being nimble, flexible, and quick, or are we wrapping ourselves in big country processes that cost a lot of money but nullify one of the key potential benefits of our small size. (As somebody said to me last week, “for a small country, we do big country really badly”)

This is not an exhaustive list. But I think it encompasses some of the key questions that are present in our science and innovation system. Some will be very familiar to you I’m sure.

I am intending on developing the government’s thinking with my colleagues and with the various sector groups in the coming weeks.

And you will of course be aware of the government’s commitment around developing IRL into an Advance Technology Institute, and the development of our Grand Science Challenges.

The way in which these two new elements of the science system in New Zealand are developed will be informed by some of the wider work and thinking about some of the key strategic questions.

Beyond the science challenges and the ATI there won’t be a lot of money around (no surprise). Government finances are tight as a result of the now Global Financial Crisis and that is unlikely to change much this term – with any new expenditure in any area having to come largely from somewhere else.

You could say (and many do) that you have to spend money before you make it - but I think it’s fair to say the world has gone about as far as it can go down that track – so we’re back to making ends meet, and making the most of what we have.

Still I back us to be successful. We are a small resourceful country that has a history of making the best of what we have. If we can recapture that approach, and be prepared to take advantage of all our opportunities then there is no reason we can’t be a whole lot more successful in science and in innovation.

To paraphrase Ernest Rutherford with a quote I have used more than once in the context of developing the ultra-fast broadband project: “We don’t have a lot of money, so we will just have to think”. And that, of course, is the essence of innovation!

Thanks for your time today and enjoy the conference.

ENDS