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Scientists critical of venture capital plan

28 February, 2001 NEWS RELEASE

Scientists critical of venture capital plan resourcing

The NZ Association of Scientists is concerned about proposed Government plans to take “special dividends” from CRI "profits" to set up a Venture Capital Fund. It has also been proposed that CRIs could increase their debt by up to 20-30% of assets to support this fund.

Science restructuring that began in the late 1980s left scientists shell-shocked as government science institutions were transformed into Crown Research Institutes charged with following a business model. They were told that the government would not bail them out if they got into financial difficulties.

The CRIs were not originally set up to make money and a Labour Party pamphlet issued in support of their pledge card at the last election specifically promised that they would continue to “allow CRIs to reinvest ALL their profits from research and development”.

Plundering financial resources of CRI "businesses" that have been set aside to replace expensive equipment and support new science innovation, often at the expense of staffing levels, in order to provide a high risk Venture Capital Fund is seen by the Association as breaking an election promise. Furthermore, the proposal will effectively reduce the science budget and slow Government's commitment to move towards 0.8% GDP invested in science by the year 2010.

Scientists often work long unpaid hours to complete work on time for clients, and for rates of pay that do not adequately reflect either their skill or their contribution. They were motivated to ensure that their Institutes remain financially secure, thus being able to ride out the ups and downs of sudden changes in government policy while continuing to do good science to the benefit of New Zealand.

The attitude of scientists is also coloured by the nature of their CRIs. For example, scientists in Landcare, Water and Atmospheric Research (NIWA), Geological and Nuclear Research (GNS), and to some extent Environmental and Scientific Research (ESR) mainly undertake public good research dedicated to understanding the New Zealand environment. This is work that no one other than the government is prepared to support. These CRIs also act as consultants, using their intellectual capital to perform technical jobs on behalf of clients, e.g. natural hazard assessment, obtaining resource consents, conducting surveys. Without a background of solid research and constant updating of knowledge this valuable resource would soon disappear.


Other CRIs including AgResearch, Hort Research, Industrial Research (IRL), Forest Research (FRI) and Crop & Food perform research for various sectors of the economy. They are expected to bring the results of their work to the marketplace. Their research is largely focused on the generation of new products and processes, problem solving, and basic research related to the science and technology areas of each Institution.

Those in environmental CRIs and perhaps AgResearch will face the prospect of the resources that they have worked so hard to build up being reinvested in areas of science and technology unrelated to the work of their Institute. It is hardly surprising that scientists feel disenfranchised and that morale remains low in some organizations given the casual way that the scientific workforce is treated.

There appears to be a current belief that scientists can be retrained on the whim of a new departmental head or minister as they come and go. It seems that those driving and applying policy are unaware of modern theory of management of workers in knowledge organizations. It appears to have been forgotten, or never understood that scientists have invested large amounts of energy and money over years or decades in developing highly specialized expertise.

The New Zealand Association of Scientists urges Government to rethink the resourcing of their venture capital proposal and to consider its effects on science and the further negative messages it sends to scientists in CRIs about the value of their work, their science, and their standing in the community.


Council of the NZ Association of Scientists
Contact: Dr Mike Berridge, Malaghan Institute of Medical Research
Phone: 04 389 5096 x 825; Fax 04 389 5095
Home: 04 566 8781

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