Wayne Mapp

10 December, 2010

Technology Development Grants Announcement

In May this year, the Government announced a significant funding boost for business research and development (R&D). $234m over four years was set aside in new money for several initiatives.

All this was done with a view to grow New Zealand’s economy through science and innovation.

It is very clear to us that New Zealand can only be a player on the world stage if we know how to outsmart the competition.

This can be achieved by developing smarter products and technologies, or by adopting leading-edge science from overseas and making them work to our advantage.

Improving support for business R&D

This was our major focus in Budget 2010.

We know that our levels of business R&D are low by OECD standards. This is partly a function of our primary sector, where the majority of research is actually undertaken through the CRIs and funded through industry levies or directly by the Government. It is also a reflection on the small size of many businesses.

Our response was three-fold.

We have introduced the new Technology Transfer Voucher. This is aimed at smaller companies that do not have their own R&D capability. It will enable them to access services through our research institutions.

I announced the six initial research providers a few weeks ago. They will be working with companies to shape their research projects and outcomes. There is a lot of interest, and I expect the vouchers will be well over-subscribed.

The next step is to improve the links between research organisations and business. New Zealand is good at producing research, but not so good at turning that knowledge into successful companies.

Businesses are the ones best placed to know where the opportunities in the market are for, say, a new technology. It is also businesses that can identify innovative applications for research that may be nothing like those envisaged by the scientists. But they need to know what research is actually available.

We have just put out the Request for Proposals to develop a national network of commercialisation centres. These will improve co-ordination and efficiency, and encourage easier access by firms and investors to publicly generated knowledge.

This brings me to the third initiative, tthe one that brings us here today. In terms of funding it is the most significant initiative of the three.

Technology Development Grant

The new Technology Development Grant is aimed at research-intensive industries. This will in effect give them an additional 20% of R&D investment. Over the next four years, we will be investing $190 million through this scheme.

This includes making Government support for business R&D more effective and easier to access. We are going to grant $190 million to R&D-intensive businesses over the next four years.

Investments are capped at $2.4m per year for three years.

Remember that this is only 20% of the firm’s R&D spend, so at the top level of the grant they will be spending up to $12m a year, or $36m over the three years.

Today we are rewarding no less than 26 of New Zealand’s most R&D-savvy businesses — up to a maximum of $92m over three contract years.

The investments start at $490,000 and range up to the maximum level of $7.2 million over three years.

Companies span a range of sectors including manufacturing, biotechnology, 3D scanning and modelling, furniture design, digital technologies and software.

This is the single largest investment the Government has made into business R&D. It will come on top of $50m already being invested each year in other businesses through TechNZ, the Government’s well-established business R&D investment programme.

The high level of investment demonstrates this Government is taking R&D and its contribution to economic growth very seriously.

My message here today is that those businesses with the ambition to grow through R&D will find a willing investor in the Government, whether it is through the Technology Development Grant or through other forms of TechNZ support.

Government backing through the Technology Development Grant will mean businesses will have more financial certainty over the next three years.

They will be able to accelerate the development of innovative products and services and take them to their clients all over the world.

These are tricky times to be competing in global markets, and New Zealand’s leading high-tech companies need to retain their competitive edge for the benefit of us all.

Helping to take some of the risk out of R&D will encourage these firms to stretch for more ambitious R&D goals.

These businesses are the R&D frontrunners. The New Zealand economy needs more of their commitment to innovation.

It is no coincidence 19 of these companies feature in the TIN100 list of leading technology businesses.

They do very well, and when they do well, New Zealanders will reap the benefits, in terms of more jobs, more export revenue and thus more income. And so it makes sense to support these high-flyers.

We are already planning for the 2011 round when, again, we will be investing in more businesses so they too can take their R&D to the next level.

The following businesses have been successful in applying for the Technology Development Grant in the 2010/11 investment round.

Applied Research Associates NZ Ltd $1.32m
Compac Sorting Equipment Ltd $1.72m
Dynamic Controls Ltd $5.28m
Douglas Pharmaceuticals Ltd $7.20m
Enatel Ltd $2.46m
Endace Technology Ltd $6.70m
Fisher & Paykel Healthcare Corporation Ltd $7.20m
Formway Furniture Ltd $1.22m
Gallagher Group Ltd $7.20m
Gentrack Ltd $1.44m
Integrated Control Technology $0.85m
Jade Software Corporation $3.20m
Media Transfer Services Ltd $2.10m
Orchestral Development Ltd/Orion $7.20m
Rakon Ltd $7.08m
Scott Technology Ltd $3.78m
Serato Inc Ltd $0.49m
Simcro Tech Ltd $0.93m
Sika Technology Ltd $0.95m
Skope Industries Ltd $3.21m
Tait Electronics Ltd $7.20m
Vista Entertainment Solutions Ltd $1.24m
Weta Digital Ltd $7.20m
Zeacom Ltd
$2.11m
Zelam Ltd $0.87m
4RF Communications Ltd $1.89m

I look forward to seeing the results from every business’s R&D programme in three years’ time.

Thank you.

ENDS

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