The Government is to end the competitive scramble for cash among its crown research institutes in a bid to improve the quality of their scientific work and their contribution to the economy.
Prime Minister John Key said the changes were to ensure publicly funded research institutions were responsive to New Zealand's economic needs and that resources were directed to areas in which the biggest economic benefits could be made.
"In recent years, scientists have been forced to spend too much time applying for funding and filling out forms, rather than getting on with the business of producing high-quality practical research."
Research, Science and Technology Minister Wayne Mapp said the changes were the most significant in the sector in 20 years.
Under the changes, which are scheduled to be largely in place by July next year, the Government will work with each CRI to develop a "statement of core purpose which will define the exact role each CRI should play in delivering benefits to New Zealand".
To achieve this, the Government will give each CRI certainty of funding on a long-term basis, rather than having to compete.
With this certainty of funding will come a commensurate shift of responsibility and accountability for their boards.
"CRIs will be working for the benefit of New Zealand as a whole, not just for the benefit of the individual CRI," said Dr Mapp.
The measures are the Government's response to the recently completed Report of the Crown Research Institute Taskforce.
The report found the prevailing structure appeared to encourage outputs that benefited the individual CRI "rather than on research that contributes to the wellbeing and prosperity of New Zealand".
It also found that the existing funding and governance model inhibited collaboration with natural partners, such as businesses and universities.
However, the taskforce, whose terms of reference included looking at the merits of reconfiguring the number and scope of CRIs, did not believe reducing their number or ownership status would improve their contribution to the economy.