Biotechnology Investment Seminar

  • John Luxton
Food, Fibre, Biosecurity and Border Control

This seminar is very appropriate in focussing on biotechnology investment. This is a key area of New Zealand's potential growth. As we enter the 21st century, businesses are facing a conundrum. On one hand businesses must grow or they die. And the world economy must keep pace with the needs of an ever expanding population. On the other hand, experience tells us that growth sometimes can lead to unacceptable abuses of the environment.

Sustainable development is the theme of the 21st century. It is all about meeting the economic needs of the world in a way that ensures that future generations can still have access to the same resources. Biotechnology is going to be increasingly relied upon to provide answers. Plants have been altered to resist insects which could lead to less use of harmful pesticides in agricultural systems, most of which ends up on the soil and is wasted. And innovative and more sustainable ways of meeting old needs are already being investigated e.g. the production of plastics and vaccines in plants. What is the role of government in biotechnology and what are we currently doing about it?

Firstly, biotechnology is a powerful research tool. It is now widely used in many biological research programmes because it allow researchers determine and test their ideas on how biology works. For more than two decades, New Zealand has invested in biotechnological research mainly for research and development purposes. The bulk of funding for this research has come from government, initially through the Health Research Council, MAF and DSIR, but subsequently from the Public Good Science Fund following the restructuring of science in 1992. Much of this investment underpins agricultural and health industry strategies aimed at maximising the benefits to New Zealanders.

This has resulted in a biotechnology community that is based on our advanced agriculture, forestry and bioscience sectors, our unique natural resources, excellent animal and plant health status and high quality research facilities. This community can be harnessed to address our unique needs. For example, New Zeland has very high rates of diabetes. Biotechnology can help us find the reasons why, and may also supply the solutions to help improve our nation's health and wealth.

Government remains committed to increasing its investment in science to support research and development. In the Government 's research strategy to the year 2010, the goal is to lift its investment in science from a current approximate 0.6 - 0.8% of GDP. It is a continuing challenge for us that private investment in science in New Zealand is less than public investment - the opposite from the situation that exists for most of our trading partners. This means that technology transfer issues are critical for us where innovation is involved - we must find ways to encourage better interaction between the funders, providers and users of our research.

This is one of the major drivers for the Foresight Project currently being undertaken by the Ministry of Research, Science and Technology. Government must also ensure that the products of biotechnology are safe to both people and our environment. Safety, and confidence in safety

measures, are critical to the acceptance of any new technology. New Zealand has very strong regulation to achieve this. For instance, the current emotive debate about genetically modified foods often overlooks the fact that the safety of all genetically modified organisms must be approved on a case-by-case basis by independent statutory bodies before they are released in New Zealand. Both the Australia New Zealand Food Authority and the Environmental Risk Management Authority have public processes that allow any interested person to make information available before a decision is reached.

A third key role for government is to ensure that our business environment is competitive in the global marketplace. We are continually reassessing policy to ensure that businesses are not facing unnecessary or excessively burdensome cost. I am sure you are all aware that we do not offer tax incentives for research and development in New Zealand. I note that in many overseas countries where this policy is used, it has resulted in businesses reclassifying other activities as research and development.

Government will continue to encourage research and development and its uptake through its purchasing of science research where users are also prepared to demonstrate their financial commitment. One specific example is the Technology New Zealand scheme run by the Foundation for Research, Science and Technology. This year this scheme is investing S16 million in partnership with industry to increase the technological competency of firms. The top 10 products developed with Technology New Zealand support have generated over $200 million in their first four years of sales.

I do see some hurdles to the future development of biotechnology in New Zealand. Public acceptance is a key issue. In general, New Zealanders are positive about biotechnology and its usefulness to society. A 1997 international survey revealed that 87% of New Zealanders supported the usefulness of inserting plant genes into crops to make it more resistant to pests. However, New Zealanders are also concerned about the risks associated with science and its applications. In another survey conducted last year, only 12% of people surveyed thought that the benefits of genetic engineering outweighed the risks.

Exactly how biotechnology is used is very important. A further hurdle is the current legislative constraints on the marketing of dairy, kiwi and apple products, which outlaws new investment and innovation unless it is either generated or approved by the current monopoly marketing bodies. New Zealanders need to recognise the magnitude of the investment by individual multinational companies in the area of biotechnology far exceeds the New Zealand's entire investment in science. We are going to need to be careful to ensure that our investments complement the work of multinationals and are not compromised by disputes over the ownership of intellectual property.

Most of us have few concerns about the use of pharmaceuticals produced by biotechnology, however more than a few people have concerns about some ethical and social issues surrounding the use of genetically modified foods. While government can provide a regulatory environment to best assure the safety of manufactured products, and ensure appropriate labelling where it is technically justified, it cannot meet everyone's needs for information and choice. This can only be achieved by regulators, industry and the public all recognising that they have roles to play in the introduction of new technology with industry being responsive to public needs. I know of few examples where consumers have rejected the ethical and intelligent marketing of new products delivering positive benefits. There is one final challenge is that I would like to leave you with. As we move towards the next century, we are going to need a workforce that is more skilled in science and technology.

In 1996, 27% of graduates in New Zealand were from science and technology. The average in comparable OECD countries is 41%. New Zealand students are keen to study business, law or accountancy but science, technology, mathematics and engineering do not have the same appeal. This situation will need to be reversed if biotechnology is to deliver its potential contribution to the future of New Zealand.