One of the Government's flagship research and development policies promoted in last week's Budget will fail to deliver results, says the chairman of a Christchurch nanotechnology firm.

The Government said last week it would dedicate $90 million of operating funding and $76.1 million of capital funding over the next four years to create the Advanced Technology Institute (ATI).

Of this $166.1 million, $11.9 million is earmarked for the ATI in the 2012-13 budget.

This initiative was announced before the last election and will increase the size and reach of an existing Crown research institute, Industrial Research Ltd, to build up the sector and create new opportunities for high-value manufacturers.


A number of scientists welcomed news of the funding and New Zealand Association of Scientists' president Shaun Hendy said it would build stronger links between science and industry.

But the chairman of Izon Science, Hans van der Voorn, said the ATI was a bad idea and would not be successful in driving innovation.

"You're just chucking a whole lot of money back to a public sector organisation," van der Voorn said.

"If your aim is more innovation and more commercialisation, let's be honest: you're not going to get that from the public sector."

Van der Voorn said although Crown research institutes "do good science", they had no track record when it came to commercialisation. Instead of putting money into the ATI, van der Voorn said the Government should look at giving more funding to research centres at universities.

"Research institutes at universities can be quite dynamic places," he said.

"They do really smart research and have all these young people coming through with bright ideas ... that would seem to me to have a higher chance of success."

Science and Innovation Minister Steven Joyce said van der Voorn's criticism of Crown research institutes was fair.


"That's why the design of [the ATI] is so important, that's why it's important that we ... make sure it's driven by industry and not driven from the science end," Joyce said.