Government Announces R,S & T budget
The Prime Minister today announced the research and science component of next weeks budget.
Most Government agencies will see no additional funding in the foreseeable future, but behind Health and Education, Science will get the biggest increase in operating spending in the 2010 Budget. So the main part of the Budget package is a boost in support for business R&D.
In total, the Budget allocates $321 million for new initiatives within RS&T over the next four years.
Of that, $225 million is new funding and $96 million has been reallocated from across other parts of the Vote. This level of new funding means that RS&T gets the third-biggest increase in funding in the Budget, behind only Health and Education.
Technology development grants
The biggest of the new measures is an investment of $189.5 million over four years to create a brand new type of R&D grant. These grants will be targeted at medium to large, research-intensive firms, which can show that their activities result in wider benefits to New Zealand. These will almost certainly include, but are not limited to, firms that undertake high-value manufacturing.
The Government will contribute 20 per cent of the firms' expected R&D spend for a period of three years, up to a set maximum. In turn, the firms can determine exactly what R&D activities this money is spent on. These firms are, after all, "R&D savvy" so know better than anyone where this funding would be best spent.
Retaining the existing TechNZ grants, which provide for 50% funding of a particular project. These work well for many firms and we are keen to continue with them, albeit with a sharper focus.
However the new technology development grants are something entirely different.
They are not project based, which cuts down on bureaucracy and lets research-intensive firms determine the best use of the funding. Neither are they delivered through the tax system. That means we avoid the sorts of inventive accounting and lack of cost control that plague tax-based measures like R&D tax credits.
Technology vouchers
$20 million over four years into these vouchers. They will be targeted at firms which don't have much of an in-house R&D capability but would really benefit from working with a public research organisation like a university or CRI.
Firms will able to apply for a voucher - typically worth around $100,000 to $200,000 - which they can then use to get a project completed with a research organisation. Having these vouchers will obviously result in more R&D being done, to the benefit of New Zealand firms. But they will also have wider benefits, in terms of improving links between business and the science system.
In particular, they provide an incentive for research organisations to collaborate with firms and to be responsive to what firms want and need. And they have the potential to demonstrate to all firms, including those who don't have vouchers, the benefits of working with public research organisations to improve their businesses and develop new ideas.
Technology transfer
Another $24.7 million has been set aside in the Budget for initiatives to help capture the commercial value of research done in public research organisations. There is scope in New Zealand to improve the way new technologies are transferred from research organisations - which generate new scientific knowledge - to businesses which can use this knowledge to produce and sell products.
In addition, to improve the way research organisations themselves commercialise the new knowledge they create, the Government will be investing $11 million over 4 years to establish a national network of commercialisation centres.
This network will bring together existing expertise from the commercialisation units already attached to public research organisations.
Innovation Pathway
Also the Ministry of Research, Science and Technology (MoRST) launched "Igniting Potential - NZs Science and Innovation Pathway". A document which captures and summarises the changes taking place in the science system, like setting clearer priorities for science, reshaping CRIs and today's announcements of business R&D incentives
A link to the MoRST site is below where you can read the full speech, see the Q & A, and link directly to the document "Igniting Potential".