FRI 50th Jubilee Conference Dinner

Greetings.

In July 1896 timber merchants gathered for a conference in Wellington. The politician wheeled on stage that time was the premier, Richard John Seddon. Although not renowned as a political theorist, he offered up his views on the states role in forestry:

It has often been said in the past that governments should not interfere in matters that should be dealt with by commercial men.... we have been told time after time [that the timber industry] is not a matter for Government concern, but that those engaged in commerce and industries will settle it for themselves. Well, my experience through life has been this: that everybodys concern is no ones concern, and if you trust to everybody, you will find... that no one is doing anything.

And so the government began planting trees in earnest.

Fifty years later, after the State Forest Service had planted vast tracts of the North Island with exotics, officials began to wonder whether the scientific know how wasnt lagging behind the seedlings advance. In 1947 the Director of Forestry, Alex R. Entrican, came to the view that, with a few marked exceptions, research, in the true sense of gleaning fundamental knowledge, has been sporadic over most of the history of the Forest Service, owing solely to the inadequacy of technical staff. Spurred to action, they reorganised the department. All research was assigned to the Development Division, which was centralised at the Forest Experiment Station, Rotorua.

From those humble origins a proud research tradition has developed. Today we celebrate FRIs 50 Jubilee. New Zealand now enjoys immense forest resources and the complementary human collateral.

In the last 13 years a lot has changed in the timber business. Governments have been less confident than King Dick in the states ability to run the industry. Recent reforms have seen:

the privatisation of Governments investment in forestry, and subsequent welcoming of foreign capital;

the dissolution of the New Zealand Forest Service (a 10th anniversary of that event is also marked this last weekend);

the formation of the Ministry of Forestry (which initially included FRI);

the re-establishment of FRI as a Crown-owned Research Institute;

the introduction of user-pays;

the establishment of FRST and the introduction of contestable bidding for PGSF funds.
Relationships have changed between FRI and the industry it serves. They are now more purposeful, more business-like, and framed within a service-to-customer philosophy.

FRI must foot it in a market-orientated science environment which demands a regard for clients, be it the Foundation for Research, Science, and Technology or the commercial forestry sector and here I include those companies supplying goods and services to the forest growing, wood processing, and wood utilisation industries.

Certainly, at a jubilee it is proper to be congratulatory. But its also a good time to ponder the significant challenges ahead.

The industry is at the front end of major expansion. The forest harvest will increase by some 80% to 30 million m3 by 2010. It has the potential by then to increase its contribution to GDP from the current 6.9% to nearer 10%. Export earnings could double to about $5.5 billion. But somewhere along the line we will require billions of dollars investment in processing plant if New Zealand is to gain the full benefits of adding value.

Then, most crucially, new markets are needed for our prodigious supply of wood. Our best chance here is to produce high-quality and differentiated wood products that can compete not only against other commercial wood species but also alternative materials therein lies FRIs chance.

John Butcher can rattle off a list of opportunities technology will open up: Research in the advanced breeding of radiata pine, the deployment of molecular biology techniques, and better propagation technologies will deliver designer trees targeted for specific end uses. New methodologies will allow detailed information to be gained on each stand, of external characteristics and internal wood properties that dictate end-product performance. Advances in the development of decision-support systems that predict accurately yields and values will help forest managers decide when best to harvest.

At the mills, new scanning technologies will deliver conversion solutions for optimum yields targeted at specific end uses. New wood processing technologies will increasingly integrate presently discrete processing steps and move towards in-line, just-in-time processing. We will see the development of new engineered products and the use of smart chemical processing to produce materials of predictable properties.

Its exciting and I know many of these topics are being addressed at this conference.

As is the thorny issue of environmental sustainability. This is not just a matter for New Zealand forestry but one that confronts the world, and I am pleased to see it on the conference agenda. New Zealand has the opportunity to make a unique contribution here. I am heartened by the significance given to sustainable forest management by the Forest Industries Council.

FRI has its particular challenges. It must maintain, if not increase, its strategic science focus because it is from strategic science that commercial opportunities are created. As a creator of opportunities, FRI can stimulate stretch in industry and a focus on tomorrow. This is important when so many companies are busy grappling with the harsh realities of today.

Secondly, FRI must cultivate its rapport with the sector - particularly as the industry is in an expansionary and dynamic stage, carefully juggling its investment portfolios. Economic reality demands that it be responsive to change and innovative not only in science but in how it relates with industry. On the other hand, industry might well bear in mind that competition, while it keeps organisations sharp, can be a blunt tool that damages strategic science capability. With research and development it is essential to react to the big picture and not sacrifice the future for short-term benefit.

From a government perspective, CRIs now operate as profit-making, tax-paying companies. These companies undertake long-term strategic research (the focus of much of the PGSF investment but also notably attracting industry funding) and applied research, which accounts for most private sector investment. The big challenge confronting science in New Zealand is to heighten the flow between strategic research and the delivery of commercially viable products. The Technology for Business Growth scheme is strategically placed for just this, as it creates meaningful partnerships (that word again) between a research provider and a research user. I am, of course, aware of the many similar relations built between the industry and FRI without the involvement of TBG.

The point is, that this is an area where weve only just begun.

Technology transfer and commercialisation demands tenacity and perseverance. How many good developments have not achieved commercialisation simply because the last few hurdles appeared too high to clear? Technology commercialisation requires good and considered management, and it requires a fusing of the science and industry teams to build mutual understanding of the differing demands of research and commercial reality. In many ways, the key drivers for successful commercialisation are having committed champions in both the science organisation and the industry, and the establishment of long-term relationships which build mutual confidence and trust that concept of partnership again!

But partnership alone is not enough it must be underpinned by performance and realisation of mutual benefits. If research translates into commercially viable products which creates value to clients, those clients will want to re-invest for the next opportunity. Isnt this what we have aimed at achieving through the science reforms?

Success breeds success. Both industry and FRI have been highly successful to date long may it continue.

Returning to Seddons comment. Remember he said, my experience through life has been this: that everybodys concern is no ones concern, and if you trust to everybody, you will find... that no one is doing anything. Well, the answer to that is in your hands.