Speech to the Royal Society of New Zealand - Auckland War Memorial Museum

Good evening, and thank you for the invitation to speak at this event.

I’m conscious as I talk to you tonight that this museum is also a war memorial.

The galleries here record the names of those who fell in the many conflicts New Zealand has been involved in.

So we remember the most recent of them – the five soldiers who lost their lives in Afghanistan over the last few weeks.

They are owed a great debt, both by this country and by the people of Bamyan province, in a country very far from New Zealand.

And as we remember those who have passed away far too early in their lives, I also want to make special mention of the late Sir Paul Callaghan.

Sir Paul was an outstanding New Zealander and one of our greatest-ever scientists.

He was also a public figure who made a very valuable contribution to public debate and to the understanding of science and innovation in New Zealand.

His message about getting value from scientific ideas was that much more powerful because he did what he talked about. He founded a company at the cutting edge of MRI and magnetic resonance technology.

This week we were able to honour the contribution he made to science and to New Zealand by announcing that we are going to name the new Advanced Technology Institute after Sir Paul.

We are grateful to Sir Paul’s family for allowing us to recognise him in this way.

I am fortunate to have another world-class New Zealand scientist as my Chief Science Advisor.

For three years, Sir Peter Gluckman has provided independent advice to me, and to the Cabinet, on the scientific challenges and opportunities our country faces.

He is hugely respected in New Zealand and around the world, and his advice is invaluable.

So I am pleased to announce that Sir Peter has accepted my request to continue as Chief Science Advisor for another two years.

Among all the other things he does for me, I want to thank him for his Transit of Venus report, which he summarised in the remarks he has just made.

The report is, as ever, rich in observations and analysis.

But as I understand it, the original Transit of Venus – or at least Captain Cook’s observation of it from Tahiti – was something of a ruse.

The scientific mission was cover for the real task at hand, which was to
discover the unknown southern continent and claim it for Great Britain, which of course Cook did.

That simply shows you that scientific endeavour has often gone hand-in-hand with politics. I’m sure that’s why you invited me here tonight.

On a more serious level, there is one thing I would encourage the scientific community to do, following on from the Forum.

That is to think about particular policies that would give effect to some of the higher-level directions you discussed.

As policy-makers, regulators and funders, Ministers have to rapidly get to the nitty-gritty of science policy, as we do with other policies.

Government deals in practicalities and has to constantly make trade-offs.

So help us out.

Bring us your ideas and we can talk about them.

Apply the same rigorous analysis you employ in your scientific endeavours, to the issues of public policy as it affects science.

And the more concrete you can be, the better.

I want to take a few moments now to talk about what the Government has been doing in the area of science and innovation over the last three years, and what we have been trying to achieve.

If I had to highlight three things we’ve been doing, I would choose the following.

The first thing I would highlight is that we have been actively working to lift the profile of science in New Zealand.

This has been an objective I have personally driven.

On becoming Prime Minister I established the position of Chief Science Advisor, reporting to me personally, which Sir Peter has filled admirably.

I also launched the Prime Minister’s Science Prizes, with total prize money of $1 million, because I think our scientists deserve their share of public acknowledgement and acclaim.

And we are continuing to improve the way the science system operates. Sir Peter’s Forum report highlights some opportunities in this regard and we’ll continue to work on those.

The second thing we have been doing is increasing our investment in research, science and innovation.

You all know how tight the Government’s budget is. It has been severely stretched by the recession, the Global Financial Crisis, and the Canterbury earthquakes.

Most areas of government have had no increases in funding over four Budgets and are not likely to for some time.

Yet after health and education, science has been one of the areas we have purposely increased our investment in. As conditions allow, we will continue to do so.

This year’s Budget, for example, contained $326 million of new funding over four years for science, innovation, and research.

Among other things, we allocated $100 million in additional funding to increase the size of the Performance-Based Research Fund to $300 million a year by 2016.

And in recognition of the importance of science for New Zealand’s future, we will be investing $60 million over the next four years in a series of National Science Challenges, to address some of the most fundamental science-based issues New Zealand faces in its future development.

In previous Budgets we increased core funding for CRIs, together with funding for the Health Research Council and the Marsden Fund.

We also established the Domestic Centre for Agricultural Greenhouse Gas Research, and helped set up the Global Research Alliance, to drive much-needed research on agricultural greenhouse gas emissions.

The Government’s total cross-portfolio funding for science, innovation, and research is now up to $1.24 billion a year – a rise of 17 per cent over the past four years.

The third thing I would highlight is the Government’s focus on encouraging business innovation.

As Government investment in research and innovation increases, proportionately more is being spent on projects that are business-led, or that encourage firms to increase their investment in, and application of, research.

We want to see scientific knowledge and insights being turned into business growth.

That is not, of course, the only interest the Government has in science.

Far from it.

Publicly-funded science and research make a huge contribution across all areas of interest to the Government, from managing natural hazards, to informing health policy, to understanding our indigenous flora and fauna.

But one of the Government’s key priorities is to build a more productive and competitive economy, and science- and technology-based innovation plays a key role in that.

In previous years, for example, we established the Primary Growth Partnership, to invest, alongside industry, in research and innovation to boost New Zealand’s primary, forestry and food sectors.

We introduced new technology development grants and vouchers, to increase the amount of research that is done in, or commissioned by, New Zealand firms.

And this year we made science and innovation a key part of the new Ministry of Business, Innovation and Employment, under Steven Joyce.

On Tuesday, alongside Ministers Joyce and Amy Adams, I launched a publication called Building Innovation – the second progress report of six in the Government’s Business Growth Agenda.

This puts innovation at the heart of the Government’s plans to build a more competitive and productive economy.

Building Innovation looks at what is happening in science and research in New Zealand, and considers the challenges and opportunities before us.

It details and updates more than 50 Government policy initiatives in areas such as business innovation, competition policy, public science, research institutions, the innovation workforce, innovation infrastructure, intellectual property law, and international linkages.

The aim of the Building Innovation report is to give the business sector, the science sector and other stakeholders a clear picture of what the Government has underway, and get their feedback to develop it and improve it further.

As I said before, we are very interested in what you have to say about science and innovation policy and I would encourage you to read the report and tell us your thoughts.

The Government is making good progress in lifting business R&D – the rate of growth of business R&D in New Zealand has outstripped that of most OECD countries over the last decade.

And the 2012 Global Innovation Index, which ranked New Zealand 13th in the world, showed that although we are a small country, it’s the quality of our people, their ideas, and the regulatory and business environment that matter.

The Building Innovation report targets raising the amount businesses spend on R&D from 0.54 to more than 1 per cent of GDP.

The new co-funding tools we are using will assist with that. We are investing $115 million a year in co-funding programmes with companies, and investing nearly $300 million so far in the Primary Growth Partnership.

But further initiatives will be needed.

In addition to the development of the new Advanced Technology Institute, we will be looking to ensure that Government funding is leveraging the maximum amount of R&D possible from local firms.

We also want to strengthen the process through which the results of research are taken up and applied.

A key aspect of that is improving the New Zealand business incubator model, and other small, advanced countries like Israel have some interesting ideas we want to pursue further. I’ll have a bit more to say about that in a moment.

We also want to look at ways of encouraging multinational firms to invest in doing R&D in New Zealand.

The international evidence is clear – in most developed countries, large firms undertake the bulk of R&D.

We obviously want to grow the R&D undertaken by the large firms we already have. But encouraging more multinational research can boost this process, attracting new infrastructure and skilled workers.

These ideas for further initiatives are only a selection of the possibilities being investigated.

This is one area in particular where we would welcome your ideas, given your invaluable ‘hands-on’ knowledge of the science system.

I want to say a bit more about the Advanced Technology Institute now, and then finish by talking about another new initiative which we are in the process of kicking off.

The ATI, as I mentioned earlier, will be named after Sir Paul Callaghan.

With operations in Auckland, the Hutt Valley and Christchurch, it will become a high-tech HQ for innovative New Zealand businesses.

And in this year’s Budget, the Government set aside $166 million over the next four years to fund it.

You may recall that the establishment of an ATI was recommended by the Powering Innovation report, which came out last year.

The aim is to help get our best, most innovative ideas out of the lab and into the marketplace more quickly.

It will help high-tech firms become more competitive by better connecting them with innovation expertise and with facilities that will exist both within the Institute and across New Zealand’s CRIs, universities, polytechnics, and other research organisations.

It will encourage greater mobility of researchers, graduates, and academics between institutions and industry by organising co-appointments and secondments.

We expect the Institute to focus on industries with significant growth potential such as food and beverage manufacturing, agri-technologies, digital technologies, health technologies, and high-value wood products.

This will encourage innovation, competition and greater commercialisation and investment in R&D in these sectors.

Businesses that are competitive and successful on the world stage drive New Zealand's economic success.

The Institute will help push innovation in key sectors of the economy by bringing science and business closer together.

In establishing the Institute, the Government looked at successful international models such as the Danish Technology Institute.

New Zealand can learn much from the experience of countries such as Denmark.

So I am pleased to announce that New Zealand will be hosting a meeting of small advanced economies later this year.

Five countries – Denmark, Finland, Israel, Singapore and New Zealand – will contribute senior leaders in the areas of science, innovation, foreign policy and trade policy.

Participants will work on how our countries can best position themselves for growth, in particular by developing and harnessing the power of innovation.

Other countries have also expressed an interest in attending.

This initiative is about how small nations that face similar challenges and opportunities in an increasingly inter-connected and competitive global economy can learn from one other.

New Zealand, for example, needs to make progress on better commercialising our ideas.

That’s an example of where we can learn from the experience of other small economies which have also grappled with this issue.

The initiative is being jointly led by Sir Peter, the Ministry of Foreign Affairs and Trade, and the Ministry of Business, Innovation and Employment.

It will be held over two days in Auckland in November and more details will be announced closer to the time.

So can I conclude by thanking the Royal Society for putting on this event as well as thanking those involved in organising the Transit of Venus Forum.

Science and innovation are important. New Zealand’s future economic performance depends to a considerable extent on having a skilled, technologically confident workforce, and a society which can generate and use new ideas and new processes.

And in a wider sense, science is hugely important in improving the living standards of New Zealanders – not just in an economic sense, but also culturally, medically, environmentally and across a whole range of dimensions.

So I encourage you to continue your good work.

Thank you.