“Of the $246m in funding allocated, only 6 per cent is supporting the development of novel health technologies, with the vast majority going to environmental or agricultural-related projects.”
The government budgetary allocation to health is the single biggest item at $30 billion annually and is forecast to continue to grow.
“Investment in health technology grows local expertise with significant downstream impacts on the health outcomes for the NZ population,” Malpas says.
Local health technology companies generate in excess of $3 billion in revenue with a five-year compound annual growth rate of 12.1 per cent, Malpas said, quoting figures from the Technology Investment Network’s annual surveys.
“Healthtech companies generated more than 90 per cent of their revenue from exports in 2021. Thus, MBIE is failing to support and enhance one of the most vibrant and growing sectors of the economy and instead is focused on building resilience against climate change, natural disasters and pests. While these are all worthwhile endeavours they are not going to transform the income stream of the country.”
Is this just sour grapes?
Malpas says Endeavour actually played a key role in his own company’s success. Along with colleagues at Auckland University’s Bioengineering Institute - where he remains a professor - Malpas received $12m in Endeavour funding in 2017 to develop smart sensors.
He told the Herald he could not have founded Kitea Health and got it to its current phase, on the brink of human trials for its wireless sensors (which measure fluid pressure on the brain or heart), without the Endeavour funding.
But he said for more recent rounds, he’s helped other health tech startups put together applications for grants, only for none of them to get past go.
Earlier this year, Kitea raised $6m in funding from the private sector. Malpas said Endeavour’s focus should be on startups that are trying to commercialise research.
There is a chunky alternative for funding: The Health Research Council, which allocates $120m annually.
“But this is predominantly oriented towards improving health outcomes for the population rather than building a backbone for new health tech companies,” Malpas says.
The HRC’s most recent funding round included projects for “the therapeutic potential of kava in the treatment of psychological trauma” and research into whether “stop vaping” interventions have an unintended effect on smoking rates. All 44 grants went to academics.
HRC chief executive professor Sunny Collings said, “These project grants are an important way for us to help develop and sustain the country’s health research workforce.”
Chance for a reset?
Successive Governments had failed to bring Endeavour into sharper focus, Malpas said.
Is the latest regime change a chance for a reset?
National Party science, innovation and technology spokeswoman Judith Collins seems set to replace Woods as the Cabinet Minister responsible for the Endeavour Fund. The minister also appoints the panel that decides how the $246m is divvied up. But Collins said it was best to leave comment until after the new Government is formed.
MBIE responds
The Herald put Malpas’ comments to MBIE.
“The Endeavour Fund invests in excellent research with the potential to transform Aotearoa New Zealand’s economy, environment and society. In doing so, it supports a range of ideas and research programmes not limited by sector,” MBIE contestable investments manager Alan Coulson said.
He rejected Malpas’ assertion that health tech did not have enough representation among the Endeavour Fund’s decision-makers.
“Each Endeavour Fund proposal is assessed by eight experts in the field of the proposal from our independent college of assessors – four for science excellence and four for impact for New Zealand. This college of assessors includes independent experts in health technology ready to assess proposals submitted in that field,” Coulson said.
“The Science Board, appointed by the Minister of Research, Science and Innovation, considers the pool of proposals received in each Endeavour funding round and how best to allocate the funds. This board is informed by scoring provided by the independent assessors and can only fund proposals that meet the fund-specific criteria detailed in the Gazette notice.”
The Government also has other investment mechanisms specifically designed to support innovation in the health technology sector, including the MBIE-funded Te Tītoki Mataora MedTech Research Translator and the HealthTech Activator run by Callaghan Innovation, Coulson said.
In 2021, Te Tītoki Mataora received $8.1m in funding to cover the next three years. The HealthTech Activator offers an online directory of health tech players and resources. It’s designed to make it easier for health tech startups to find and access support.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
