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Funding for R&D in New Zealand – Expert Reaction

Research, Science and Innovation Minister Dr Megan Woods has today announced $401.3 million funding for research and development through Budget 2020 and the COVID Response and Recovery Fund.

The fund includes $150 million for an R&D loan scheme, $196 million for Crown Research Institutes, and $33 million for Māori research and development opportunities, among others.

The Science Media Centre gathered expert commentary on the announcement. 

John Morgan, NIWA CEO and Chair of Science New Zealand, comments:

“This is a timely and most welcome investment into the CRIs.  It recognises our key role in helping New Zealand recover and rebuild.

“The immediate support from the CRI Covid-19 Response and Recovery funding of $45 million this year and $72 million next year will help address the financial pressures caused by the Covid-19 situation. The Government is also increasing the funding for Strategic Science Investment Funding (SSIF) programmes by $19.5 million a year and the Nationally Significant Databases and Collections (NSDBC) that CRIs steward by $3 million a year.

“The sudden downturn and uncertain future came on top of long-term cost pressures. It put at risk critical research programmes and progressing the facilities our staff need.  Now we can plan with more certainty. It will help support our science capability to address the immediate and the longer-term needs of New Zealand, as the nation recovers and rebuilds.

“This investment is also important for our partners in the public, private, NGO and Māori sectors.  The CRIs are in every region in New Zealand.  We touch every New Zealander every day in some way, through our work across the economy, environment and social arenas. Our work helps create new jobs, increase productivity and sustainability and develop new products, processes and opportunities.”

Conflict of interest statement: Science New Zealand members are the seven Crown Research Institutes: AgResearch, ESR, GNS Science, Manaaki Whenua Landcare Research, NIWA, Plant & Food Research, Scion. 

Associate Professor Nicola Gaston, University of Auckland, comments:

“I completely agree with the Minister’s statement that new ideas and innovation are needed for economic rebuild, and that research, science, and innovation are vital as we move into COVID recovery mode, after the initial phase of response. But we must keep at the top of our minds one thing: our rebuild needs to reshape our economy and future-proof it for a world in which carbon will cost. The ambitions of government, outlined in the Zero Carbon Act, require structural changes in our science system to deliver the necessary outcomes: business-as-usual investment in current institutions and funding tools alone will not be enough. I completely agree with the need to support the capability in our CRIs; however, it is not clear that there is a vision behind this investment for how we grow capability in the areas of future and emerging need most relevant to climate change.

“One funding mechanism that is most promising is the $33 million investment into a fund to be co-designed with Māori, to deliver on the research, science, and innovation priorities of Māori. We know that there are many examples of success in the Māori economy that demonstrate the potential for values-led enterprise to make a difference, in particular on issues of sustainability; this is perhaps the most hopeful signal in the funding package as it stands.

“The post-COVID business case for investment cannot be the same as what it was six months ago. The research system is deeply connected internationally and the flow-on effects of closed borders for the careers of emerging researchers will be significant, as will the impact of reduced access to internationally-based infrastructure. These issues are of far more concern than the financial impact of lost international fees for our universities, yet seem to have received almost no attention from government.

“There is urgent need for funding to support the career development of researchers through postdoctoral fellowships, whether for those now unable to take up opportunities overseas, or for Kiwis who wish to bring their expertise home after international training. These people are in the business of creating their own jobs, whether within established industry or the start-up ecosystem, and we need to increase the pathways available for them to do this here in New Zealand.”

Conflict of interest statement: Nicola is Co-Director of the MacDiarmid Institute for Advanced Materials and Nanotechnology, a NZ Centre of Research Excellence (funded through the Tertiary Education Commission).

Professor Troy Baisden, President of the New Zealand Association of Scientists, and Waikato University, comments:

“The Government’s R&D funding announced today will help maintain the capabilities of our research system to keep us competitive with comparable nations, helping to keep R&D investment growing toward 2% of GDP despite the economic impacts of the pandemic.

“The R&D loan scheme lacks details but will be critical to support business R&D during a period when the lack of profit blunts the use of the tax incentive scheme. It will be useful to hear from businesses whether and how a loan scheme may be useful to them, particularly to enable transformations accelerated by lockdowns or the economic downturn.

“NZ Association of Scientists has expressed concerns that Māori researchers and academics are likely to be on temporary contracts and more vulnerable to the downturn, so the designation of a fund with significant support for Māori researchers is welcome. Previously, funds designated specifically for Māori-led research were insufficient to fund full-time PhDs or early career researchers, so this could provide a transformational opportunity.

“The funding for new buildings for AgResearch and ESR will also be welcome. Site preparation started and stopped during the repeated business-case rethinks of the AgResearch building on the Lincoln University campus has left a ‘shovel-ready’ crater that deserves progress. Some researchers may question whether the support for institutions with fragile finances is fair, but few can argue that our agriculture and health research institutions shouldn’t have adequate modern accommodation.”

No conflict of interest.

Professor Travis Glare, Director, Bio-Protection Research Centre, Lincoln University, comments:

“The announcement today highlighting the R&D funding increases in the 2020 budget, focused on a few areas where boosts to current spending are helping research and development. The increase to Crown Research Institutes baseline funding and the $12M more for national Significant Collections and Databases are important areas that needed funding increases. The new funding to support Māori partnerships is also welcome.

“But good science will be critical to rebuilding New Zealand’s economy after COVID-19 and it still feels the government has missed an opportunity to raise our basic funding to closer to the OECD average. The scope of the issues facing New Zealand as we reposition our economy post-COVID and move to a robust response to climate change issues will need more research depth than the currently over-competitive and underfunded system can provide.”

Conflict of interest statement: As a Director of a Centre of Research Excellence, we are largely funded by government investment.

Professor Rod McNaughton, University of Auckland School of Business, comments:

“The announcement of an additional $401.3 million of funding to support R&D and innovation is a positive signal of the role innovation must play in NZ’s economic recovery. Businesses often reduce R&D expenditures during a recession, which is the opposite of what we need to see happening. Many aspects of the global economy and consumer behaviour will be permanently changed by the pandemic, and firms need to be prepared with new products and ways of doing things, to meet New Zealand’s needs, and to create new opportunities in global markets.

“The effectiveness of the loan scheme depends on the details of its implementation. The scheme will likely follow the eligibility requirements for the R&D Tax Incentive, especially the controversial ‘science test’ and minimum $50,000 spend, which limits access for smaller firms, those in certain sectors, and overlooks the importance of incremental innovation to firm growth.

“The substantial investment in Crown Research Institutes to help them retain their staff and research capability is laudable. There is growing concern globally about a potentially ‘lost generation’ of researchers, especially junior researchers from diverse backgrounds, whose innovative ideas may be lost just when they are most needed. However, we shouldn’t forget that much of New Zealand’s research capacity is provided by its universities, which have collectively lost at least $300 million in income so far because of Covid-19. Universities are in dire straits with major job losses looming, yet have received little assistance so far.”

No conflict of interest.