Terry Mischefski (president of Plastics New Zealand), Michael Davies (Dean of the University of Auckland Engineering School), guests:

New Zealand's future relies on economic growth. If we are to raise our standard of living and provide the services and opportunities that will keep our young people here (and encourage older ones to return), we need to lift our performance. This objective lies at the heart of our approach to research.

Enhancing the interface between research and industry is one of the ways that this goal can be reached. We have to get science out of the laboratory and into the businesses that can develop and commercialise this intellectual capital. We also have to encourage business to be proactive about seeking research-based solutions to both short and long-term issues.

The Plastics Centre of Excellence is about achieving exactly that result. It is a combination of the research expertise of our largest university, investment from both the Government and business, and a proactive sector that knows what it wants. This formula is a winning one.

Our plastics industry has a value of around $2.6 billion. Half of this is exported - some of it as product, but the majority of it as packaging for every other export product. In a way, your materials are the first impression that the global consumer has of New Zealand.

In today's world, first impressions count. Not only does packaging have to be functional, it also has to look good and meet environmental expectations. New Zealand markets itself on a 100% pure image. The challenge for the plastics industry is immense. In the public consciousness, plastic has the twin burden of being assumed to use depleting resources for its production whilst also being seen as a product that is very hard to get rid of.

Not surprisingly, the Centre is focused on two major projects that directly address these concerns. These are packaging made from a renewable resource, and a recyclable alternative to PVC. Your third major project is also intriguing - the development of anti-reflective coating to reduce reflections from emitters such as mobile phones.

I note that the Centre is also involved in testing and promoting education and training. One year on, the sum of these activities has cemented your value to the industry. I know that in this tough economic environment it is a challenge for your industry participants to meet the investment required to match the Government contribution. I trust that your success will make it easier for the sector to maintain and enhance its level of support.

The hi-tech manufacturing sector, of which you are a part, is a sector that the Government wants to grow. Historically, New Zealand has been very successful with developing bio-based industries. These will continue to be the foundation of our exports. However, bio industries alone will not close the gap we have with Australia. We need to diversify our exports, and grow other sectors alongside what the Prime Minister has termed the "cultures"  - agriculture, horticulture and the like.

The RS&T review currently under way is aimed at ensuring our research sector is effectively engaged in supporting the economic growth agenda. We are looking to make the system simpler, and make more efficient use of public funding. To do this we have to develop clear priorities. Only by identifying priorities can we match the money available with the most important tasks.

We also need to eliminate wasteful competition. In many areas of research it is obvious where the expertise is. Contestable processes have sometimes resulted in researchers competing for contracts rather than working together and combining expertise. The solution to this is an increase in the amount of strategic funding that puts emphasis on the purpose of the science rather than who is providing it.

The RS&T review document is available now on the MoRST website. Submissions close on 18 November. Alongside this review, we have also established a CRI taskforce to look at how CRIs are organised, managed and funded. We are also looking at how businesses can be encouraged to invest in research, and better utilise the science infrastructure we have.

Your Centre of Excellence already incorporates many of the ideas that the review is considering. It encourages co-operation by providing a focal point for your industry to work together. It also has a mandate to ensure that ideas generated within the centre are made available to industry.

I congratulate you on your first year of operation and look forward to the results of your work leading the development of this important industry.