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Steven Joyce

4 December, 2012

Third Reading: Callaghan Innovation Bill

I move that the Callaghan Innovation Bill be now read a third time.

Mr Speaker, this is a special day in a special year for New Zealand science and innovation.

This Bill is the latest evidence of this Government’s absolute commitment to the growth and development of New Zealand’s science and innovation system alongside initiatives like the National Science Challenges, increased investment in the PBFR and increased investment in developing engineers and scientists. In fact there are 50-odd initiatives in the Building Innovation stream of our Business Growth Agenda. 

Mr Speaker, an important part of the Government’s Business Growth Agenda is ensuring there are better linkages between business, science, engineering, and design so that great ideas are commercialised and generate income and jobs for New Zealanders.

This Bill provides the legislative framework for establishing Callaghan Innovation as the high-tech HQ for New Zealand businesses.

Callaghan Innovation will be a one-stop shop offering high-tech New Zealand companies the business innovation support they need, whether it be in science, engineering, design or technology, in order to become successful internationally.

The organisation carries the name of the late Sir Paul Callaghan in recognition of his belief that science was not only about great ideas but about getting value from those ideas through innovation and commercialisation.

Alongside the passage of this Bill through the House, the Government is currently finalising the detailed design of Callaghan Innovation, to have it underway by 1 February 2013.

Cabinet will shortly consider its accountability and performance framework; what business innovation support functions will transfer from the Ministry of Business, Innovation and Employment; and how Callaghan Innovation will align with New Zealand Trade and Enterprise to ensure there is ‘no wrong door’ for businesses accessing Government services.

New Zealanders are great at coming up with smart ideas but we need to be better at turning those ideas into commercially successful high-tech products that we can sell to the world.

We need science, engineering, and design expertise joined at the hip on product development, and we must encourage an entrepreneurial spark amongst our science and research community.

New Zealand is blessed with outstanding entrepreneurs and outstanding scientists, but we are not yet as successful as we need to be when it comes to converting ideas and intellectual property into business success. 

The challenge in this case is to fire up more of our young scientists so they see starting their own business, or joining a start-up team, or an established innovation business as a viable alternative, or addition to, an academic career.

In many ways the pathway has been established, with some of our top businesses coming from entrepreneurs who have applied innovative thinking to home-grown science and engineering.

The challenge for Callaghan Innovation will be to accelerate that activity, to help more firms reach that level of success by connecting them with the know-how and the facilities they need.

Based in Auckland, Wellington –including the Hutt Valley – and in Christchurch, Callaghan Innovation will be strongly business-focussed, and responsive to commercial imperatives.

Its initial focus will be on industries with high growth potential such as food and beverage manufacturing, agri-technologies, digital technologies, health technologies, therapeutics, and high-value wood products.

Callaghan Innovation will offer value-adding services such as product testing and analysis, access to specialised expertise and facilities, national measurement and standards work, commercialisation advice, and of course, its own research.

Collaboration will be the key. As well as offering its own services, Callaghan Innovation must improve connectivity between businesses and the significant but highly-distributed capability that exists across New Zealand’s many public and private research organisations and within businesses themselves.

It will build partnerships to maximise commercialisation opportunities and develop global connections through which New Zealand companies can access international expertise and keep abreast of technology trends and market opportunities.

It will also manage the Government’s business R&D co-funding streams. However, it will not be responsible for allocating contestable science funding – that will continue to be administered by the Ministry of Business, Innovation and Employment.

Much of the foundation of Callaghan Innovation will come from the assets and staff of Industrial Research Ltd, which will become a subsidiary company of the new organisation.

The Government sees greater business innovation as a key to growing the economy. There is a big gap in private sector investment in R&D in New Zealand, and while there are multiple reasons for that, research shows that increasing business R&D expenditure drives economic growth.

Mr Speaker, the Government has set a goal of raising the amount that firms spend on R&D from the current 0.54 per cent to 1 per cent of GDP, and we see Callaghan Innovation playing a critical role in helping to leverage that greater investment.

The success of Callaghan Innovation will be measured by how many companies it helps to become R&D capable, how many spend more on R&D, and most of all, how many it helps to innovate, to become more competitive, and lift New Zealand’s exports.

Mr Speaker, I firmly believe that Callaghan Innovation will be a great step forward in New Zealand’s plan to achieve faster growth through the application of our innovation, of our Kiwi ingenuity.

I commend this Bill to the House.