Mark Peck Speech - Labour's Science approach

Mark Peck
Labours' Spokesperson on Research Science and Technology
MP for Invercargill

Science - A Precursor To The Knowledge Economy

Address to
Research Association's
Co-ordinating Committee
Turnbull House
11 Bowen Street
Wellington

Thursday 26 August 1999

You have asked me to outline the next Labour Government's approach to Research Science and Technology.

Le me first set the scene

Some things are now accepted as being fact.

It is fact that New Zealand farmers are receiving less in real terms for the fruits of their production than was the case when we were the farm for Britain.

It is fact that New Zealand can no longer rely on commodities (including aluminium) to keep us in the style to which we have become accustomed.

It is fact that today's value added product becomes tomorrow's commodity.

It is fact that New Zealand has more accountants in total than Japan.

It is fact that New Zealand invests less in Research and Development than most of the developed world.

It is fact that without policy changes New Zealand will have a critical shortage of scientists by the year 2010 as our scientists retire.

This picture provides us with serious challenge if Labour in Government is going to be able to advance it vision for a knowledge economy.

The choices we have to make are stark.

We can choose to fund opportunity - or we can choose to remain dependent on the rest of the world for our prosperity, or lack of it.

To do nothing is not an option.

Recently, Professor Michael Porter returned to New Zealand to check off New Zealand's economic development.

He gave New Zealand a clean bill of health as far as Macro Economic reforms were concerned but he was disturbed by New Zealand's lack of progress in the development of opportunities. His criticism was most strident at New Zealand's failure to take advantage of the high technology revolution and the lack of any coherent strategy to identify and exploit advanced technology solutions.

I know that oversimplifies the message from Porter's report card, but to engage too deeply into his message would be to distract us from the work we need to do. It is sufficient to understand that his message to us was that we can tarry no longer in our developing an environment, which will foster the growth of new opportunities.

In order to do so means we need to accept the need for a level of intervention. This is something Labour's major political opponent simply cannot do.

Recently the Government announced it's Bright Future package, essentially this package reshuffles $176 million of money already committed from vote Research Science and Technology, while including an additional $47 million of new money over the next four years.

Le's welcome that money for what it is - bank it - and use it.

But, this will hardly kick-start a knowledge economy.

The government has fallen short of its own target of achieving .8 of 1% of gdp funding for science in the last three budgets, and is now $35 million behind this objective.

I am concerned that the Minister of Research Science and Technology no longer sees this commitment as one of the government's goals. Indeed the Blue Print for Change (the government's policy document from the forsight project) in its very first paragraph, and in coded language, sends clear signals that the government's goal has changed.

So neither the Blue Print or the Bright Future package offer anything like a meaningful commitement to science and technology and therefore the knowledge economy as we look at entering the new millenium.

The problem for the Minister was that he failed to win two crucial battles within cabinet.

The first was to explain to the Prime Minister in language which she could understand his road to Damascus experience about the need for government intervention.

The second was that he did not achieve buy in from Bill English about the need to support research and development through the tax system. While we should all welcome the government's announcement to cut red tape, this announcement has been made nearly twelve months after the select committee inquiry into compliance cost reported to Parliament, and a cynic would say that the announcement was prompted by the government's desire to rebrand themselves at this late stage.

That really is the crux of the problem. Despite the announcement, this government does not believe in the measures it needs to take to stimulate growth in research and development.

This can be seen from their approach to tax relief for Research and Development, which was non existent in the announcement, but more importantly was specifically ruled out by the treasurer a week before the Bright Future package was announced.

What this highlights is that the government is lacking vision and is confused.

So what of Labour's vision for knowledge based economy.

Well, Pete Hodgson some time ago announced Labour's industry policy, which focused heavily on research and development, venture capital, tax breaks for research and development, depreciation regimes, assistance with patenting of intellectual property and local economic assistance funds where government can partner local initiatives which have attracted community support.

Paul Swain will shortly announce measures concerning e-commerce and the economic opportunities this provides us as a nation. Further more he has announced Labour's competition policy.

Steve Maharey is working on Tertiary Education Policy and its contribution to a knowledge economy.

And Helen Clark and Trevor Mallard have just released Labour's schools policy, which has some exciting ideas about how Labour starts to address the workforce development issues in our schools.

These are the pillars of Labour's approach to the knowledge economy.

Labour's science policy will be another pillar in an integrated approach to bringing about the knowledge based economy we dream of.

I am not today announcing policy. This work is not complete. What I will do though is to let you into what we are thinking about as we complete this work.

What you can see from my preceding paragraphs is that the vision depends on a coherent integrated approach. What is done at the level of compulsory education in the next ten years or so will vitally affect what we are able to do as a nation when students emerge from tertiary education, and for some, postgraduate study.

So, Labour's science policy will be built around the following planks:

First, Labour recognises that basic research is the driver for innovation. From Basic research springs the new intellectual property that we will want to develop as a nation as we seek to add value to our primary produce and as we identify the advanced technologies that will allow us to diversify our economy.

Second, if we are even to start this work we must have the people who have the necessary education and disciplines. Research completed by Professor Ian Pool at Waikato University makes sobering reading when looking at workforce development issues. Not only that, our culture has been to encourage our young people to go to the occupations which deliver the BMW. Not many scientists drive BMW's. Starting salaries for our scientists in Crown Research Institutes are low, less than thirty thousand New Zealand dollars.

By comparison the same scientist can attract a starting salary nearly double that in US dollars if they take a position in America.

Therefore the next Labour Government will have to take a leadership role in bringing about the cultural change needed by investing in people at an early stage during their compulsory education years to encourage entry into science and technology courses at university and postgraduate level. Then, in order (as far as is possible) to stop our scientists becoming just another "commodity", we have to ensure that at the very least encouragement is given to scientists to use their skills in the most imaginative ways possible. This will mean attracting levels of investment from the private sector as well as direct government money to ensure that scientists can do their work without fearing loss of tenure and with the understanding the their work will be valued.

This is where Pete Hodgson's work on industry development is so crucial, not only for the venture capital that comes on stream, but more importantly for the fine tuning of the tax system, which is necessary to recognise the value of research and development, and to encourage greater private sector commitment to it.

Third, The Labour Government will need to engage the private sector in the debate about raising New Zealand's contribution to research and development and it must do so with clean hands.

Therefore, Labour will need to put a halt to the erosion of public science funding that has occurred over the last three years.

If we are serious about the statement - basic research is the driver for innovation - then there is no substitute for public funding, to fund this work. Basic research by definition cannot have an identified end user. It is understandably unlikely that the private sector will want to fund scientific research that may ultimately benefit a competitor.

Fourth, leadership is also about encouraging alliances. Clearly, centres of excellence working collaboratively are best in forging these alliances. In the case of science and technology such collaborative pursuits can and often do give rise to the "incubator" a phenomenon where new ventures and companies develop from the collegial work that ensues. Incubators attract venture capital, and venture capitalists. Incubators are not new - indeed IRL a New Zealand Crown Research Institute may well have become one by accident if not by design.

Fifth, leadership is about valuing our scientific community. Money is not all of it. Many scientists tell me that they do the work because it interests them. However, why don't we occasionally recognise the good work that is done. How often do we recognise scientific achievement and its contribution to our economy with a knighthood?

One of the instructive measures in the science budget this time was the reduction of $200,000 from the science promotion fund. Not a major matter - hardly likely to cause the fall of the government.

But, at a time in our history when we need to encourage more people to become scientists it is a negative signal to a sector, which has more than enough negative issues to deal with.

As we then think about strengthening the profession, attracting more young people to the profession, and improving career structures why don't we also give an opportunity for our scientists to have input at the very top.

The Prime Minister has an Enterprise Council. From what I know about the membership on this council there are no scientists.

Labour as part of it's policy work is thinking about whether or not we should set up a new council specifically to look at issues impacting on the development of policies which will encourage innovation. This body would be a Science and Innovation Advisory Council, reporting directly to the Prime Minister on these matters.

I see this council identifying the opportunities, which could accrue to the nation from the new knowledge based initiatives.

And as I look through the 15 pages of closely typed script which is the first cut of Labour's science policy, that is finally what I get down to - opportunity!

I have had a gutsfull of a directionless lazy government who are more interested in the trappings of power than in using their ministerial warrants to do something good for us as a nation.

Pardon me for being parochial for a moment, but I watch with anger as every month another three busloads of Southlanders leave for opportunities their home can no longer give them.

And then I look at what could be done, and I talk to those who have the passion to make the effort to bring about these opportunities and I know that we have to spell out the vision to excite them into action, and then be prepared as a Labour Government to take the risks this government won't take to achieve the vision.

What can the next Labour Government offer through this approach.

We can offer opportunity and hope.

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