Major investment in research to benefit NZ

WEDNESDAY 18 JULY 2007

Major investment in research to benefit New Zealand

The Foundation for Research, Science and Technology today announced details of its investment of NZ$628 million in contracts for research that will help New Zealand develop its economy, manage its resources sustainably and respond to climate change.

The contracts are with more than 30 organisations including Crown Research Institutes, universities and other research organisations and the lengths of the contracts range up to eight years.

The investment totals about NZ$113 million in the first full financial year.

Foundation Chief Executive Murray Bain says the research being invested in will make a difference for New Zealanders, in a number of ways.

“Our biggest area of research investment in this round is the primary production sector, accounting for about half of the total investment. This reflects the innate importance of this sector to New Zealand’s economy and the need for us to be innovative if we’re to remain globally competitive.”

“We are also increasing the amount we’re investing in research to help us understand and respond to climate change.”

In this area the Foundation is investing in the continuation of significant long-term research projects led by the Crown Research Institutes NIWA, Landcare and GNS and is increasing its investment in research looking at mitigating and adapting to climate change, and modelling the impacts for New Zealand. This reflects an increase in funding in the Budget for research into managing climate change.

Other important areas of research in this Investment Round are new technologies, manufacturing and service industries, energy and infrastructure, and sustainable use of resources such as soil and water.

Most contracts will start from 1 October 2007.

These investment decisions are a major part of the public research, science and technology funding picture, but are not the total amount of investment. The Foundation has invested smaller amounts in specific areas through other processes and also invests about NZ$50 million a year to support firms undertaking R&D through its Technology New Zealand programmes.

“The majority of these investments are the result of a contestable process, where research organisations bid for funds. We have introduced some new elements to our process this year to try to provide a more stable funding environment for the sector,” says Murray Bain.

“We believe that overall we are achieving an appropriate and balanced spread of funding, while targeting investment to research that best fits with the Government’s objectives.”

“It is an unfortunate fact of a contestable process that there will always be some good bids that miss out, but we are confident that we have a robust process that has seen us target the money to the research most likely to benefit New Zealand.”

The Foundation is also today asking research organisations to put forward concepts for consideration for investment in the next year. Approximately NZ$100 million per year will be available for investment in the 2007/08 Investment Round and details are available on the Foundation’s website.

Background

What is the Foundation for Research, Science and Technology?

The Foundation for Research, Science and Technology is the funding agency that invests over NZ$460 million a year on behalf of the New Zealand Government, in public good research, science and technology and in assisting firms with research and development initiatives. These investments are made to enhance the wealth and well being of New Zealanders.

The Foundation is a crown entity, governed by an independent Board chaired by Dame Margaret Bazley.

The Foundation is separate from the Ministry of Research, Science and Technology.

What was the process for making the investment decisions?

The 2006/07 investment decisions announced on 18 July 2007 were made using two processes.

Approximately 30% of the funding was invested through a new process of negotiating extensions to existing major research contracts.

The remaining 70% was invested through a two stage contestable process.

In the contestable process, in July 2006 the Foundation asked research organisations to put forward concepts for consideration, and 383 were submitted. After assessment by independent advisory groups, research organisations were asked to submit full proposals based on 165 of the concepts. The full proposals were seeking in total about twice as much money as was available.

The proposals were then assessed and ranked by independent advisory groups. The advisory group rankings were then compared and considered alongside a number of balance factors, by an external Strategic Balance Group and the Foundation management and Board. The balance process takes into account issues such as maintaining capability, ensuring coverage of critical areas, supporting an appropriate spread of industries or areas, and balancing longer and shorter term proposals.

Final decisions are made by the Foundation Board, which has decided to invest in over 100 proposals, across over 30 organisations.

What other investments does the Foundation make?

In the 2006/07 year the Foundation has also invested smaller amounts through contestable processes in research in the areas of social research, māori knowledge, people and resources, sustainable development, energy and environment.

The Foundation also supports promising individuals through fellowships and supports international research collaborations.

Through its Technology New Zealand schemes the Foundation supports firms undertaking R&D.

Where does the money being invested come from?

Most of the money is available because previous research contracts are ending on 30 September 2007.

The Government has provided additional funding in the Budget, and most of this is being invested through this set of investment decisions. Other new Budget money is being invested through separate processes still underway.

How does this compare with previous years?

The size of the investment round is dependent on a number of factors including previous research contracts ending. It is several years since such a large sum was available for reinvestment.

In this year’s investment decisions, the average contract value and the average length are slightly higher than in previous years, which we believe will help provide more stability and certainty for the sector.

ENDS

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