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Building Innovation Report Launched

Hon Steven Joyce
Minister of Science & Innovation
21 August 2012 Media Statement

Building Innovation Report Launched

Science and Innovation Minister Steven Joyce today joined the Prime Minister in launching the Building Innovation progress report, the second in a series of six progress reports released under the Government’s Business Growth Agenda.

The Building Innovation progress report provides comprehensive details and updates on more than 50 Government policy initiatives covering the full spectrum of innovation policy. Areas covered include business innovation, competition policy, public science, research institutions, the innovation workforce, innovation infrastructure, intellectual property law, and international linkages.

“The aim is to give the business sector and other stakeholders a clear picture of what the Government has underway, and get their feedback to develop it and improve it further,” Mr Joyce says.

The report also provides a state-of-the play assessment as to where New Zealand is at in the innovation stakes.

“We are making good progress in areas like lifting business R&D, but we started from a low base so we have quite a way to go,” Mr Joyce says.

The report targets raising the amount businesses spend on R&D from 0.54 to over 1 per cent of GDP, and the amount of Government R&D from 0.6 per cent to 0.8 per cent of GDP.

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“The new co-funding tools we are using will make the real difference in business R&D,” Mr Joyce says.

“We are investing $115 million a year in TechNZ co-funding programmes with companies, and so far nearly $300 million alongside business in the Primary Growth Partnership. The benefit of these programmes is that they co-fund additional R&D, rather than just reclassifying existing spending into R&D to claim support.”

Initiatives to grow business R&D further include the development of the new Advanced Technology Institute, ensuring the Government funding is leveraging the maximum amount of R&D uplift, improving the New Zealand business incubator model, and encouraging multi-national firms to invest in doing R&D in New Zealand.

Programmes to help lift Government R&D include the National Science Challenges and the increase in the size of the Performance-Based Research Fund (PBRF).

“To get higher economic growth and greater prosperity, New Zealand as a whole will have to keep investing more in innovation – it’s as simple as that,” Mr Joyce says.

“We want to make New Zealand a more innovative, internationally competitive nation. More investment in R&D will allow our businesses to grow bigger and faster.”

Other innovation initiatives highlighted in the report include encouraging the development of innovation parks around New Zealand, increasing the Government’s investment in the teaching of engineering and science students, undertaking a review of the PBRF to ensure it incentivises innovation by researchers, improving the settings for intellectual property, and the development of the National Science Challenges.

“We need to focus our science on areas where New Zealand benefits the most. That’s why we’ve also set $60 million aside for the National Science Challenges to help find solutions to some of the most fundamental issues New Zealand faces in its future development,” Mr Joyce says.

The report is available at:

[Scoop copy: BGAprogressreportbuildinginnovationaugust2012.pdf]


Questions and answers
1. What is the Business Growth Agenda?
The Business Growth Agenda is a series of initiatives the Government is taking to build a more productive and competitive economy. Together they constitute a comprehensive agenda of microeconomic reform that will assist businesses to compete.

The Business Growth Agenda complements the Government’s macroeconomic commitments to responsibly manage the Government’s finances and deliver the ongoing stability businesses need to have confidence to invest and grow.

2. How does the Building Innovation report fit within the Business Growth Agenda?
Building Innovation is the second of six progress reports focusing on each of the six elements of the Business Growth Agenda. These reports provide a high-level assessment of the “state of play” in each area, give a clear picture of the advances being made in each area of work and projects the Government is focused on.

The reports provide transparency to businesses about the work of government agencies, and seek feedback and input into the work-plan. We expect business to use the reports to engage with the Government on its initiatives, indicating what they want to see more of, less of and any new initiatives they would like to see advanced.

3. Why is innovation so important?

Innovation has driven the improvement in our quality of life since the Stone Age. Successful innovation improves competitiveness, increases our output, drives productivity growth and creates successful exports by introducing new or improved products.

Policies to encourage innovators need to address a wide range of areas including: developing an entrepreneurial culture, high level skills, public and private research and research institutions, intellectual property rights etc. The Building Innovation report does this and puts actions in place to create the right conditions for innovation.

4. Are businesses investing enough in innovation?

New Zealand has a number of very innovative companies but we need more of them if we are to become a wealthier country and lift our overall growth rate. Over the years, New Zealand businesses have grown their spending on R&D, but it remains less than in other countries.

This Government is committed to encourage the business sector to double their expenditure on research and development to more than 1 per cent of GDP. At the same time, the Government is also continuing to increase its own investment in science and research, towards 0.8 per cent of GDP, subject to fiscal conditions.

5. How is the Government encouraging businesses to invest more in innovation?

We are investing considerable sums in co-funding business R&D. In 2012/13, we are investing $115 million in companies through the TechNZ co-funding programmes, and since its inception in 2009/10 Government has committed nearly $300 million to projects in the Primary Growth Partnership programme. The new Advanced Technology Institute will also assist firms with their R & D programmes. The Government has budgeted $166 million on the ATI development over the next four years.

6. What is happening with the ATI?

In July, the Prime Minister and Minister Joyce released the high-level design of the Advanced Technology Institute. An Establishment Board has been appointed to lead the implementation and make operational decisions on the ATI. Government intends to have the ATI up and running by the end of the year.

7. What is happening with the National Science Challenges?

The National Science Challenges will seek innovative solutions to some of the most fundamental issues New Zealand faces in its future development. The Challenges will seek answers to questions of national significance to New Zealand. These will include questions that are potentially solvable, but where the best solution is far from obvious.

The National Science Challenges will respond to complex problems by focusing effort and engaging resources in a way that is not possible at present. Ideas will be gathered from the public, and the science and business communities. These ideas will be grouped, and ranked by experts.

Budget 2012 set aside $60 million over four years for the National Science Challenges. Further announcements on the National Science Challenges will be made shortly.

8. Why is ultra-fast broadband and the Rural Broadband Initiative part of innovation policy?

Improving New Zealand’s communication network is a crucial enabler of innovation and innovative businesses.

While high-speed broadband services are obviously crucial for the ICT industry, they are also important right across the HVMS sector.

Areas as diverse as agri-technology and health technologies need high-speed broadband capacity. The Government’s UFB and RBI investments, coupled with next generation wireless broadband, will ensure New Zealand innovators have a 21st century digital platform to assist them to succeed.

9. What is the status of the Ultrafast Broadband Initiative?

The year one target for the Ultra-Fast Broadband initiative has been exceeded by more than 6000 premises. The network is now reaching more than 76,000 schools, businesses, hospitals and households.

More than 660 schools are now connected to the network. This is providing a wider range of learning opportunities for both students and their teachers. By July 2013, 1500 schools are expected to have received fibre.


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