A world-leading model of the human lung, developed for its own sake, is yielding dividends for Fisher & Paykel Healthcare.

The model's author, Dr Merryn Tawhai, and her colleagues at Auckland University's Bioengineering Research Institute created the mathematical simulation "because we just wanted to understand".

But that exercise has also become a model of a different kind - an all-too-rare example of how New Zealand might create economic value out of the $800 million taxpayers shell out each year for research.


The human lung is not so much a single organ but a massive tangle of 60,000 progressively smaller airways that make a jumbled ball of string look simple in comparison.

Tawhai has used mathematics to make sense of that chaos.

"It's like a sponge to look at from the outside," she says.

She described every point on the surface of that sponge mathematically, then solved the equations to minimise the distance between each point and the surface.

Finally, she used another mathematical formula to fill the volume inside the surface with airways like those observed in human patients.

"There is really nothing that compares with our anatomical models in the heart and lung," says Tawhai.

She took her findings to Fisher & Paykel where her husband, Jamie, is technical manager. The company dominates the world market for medical humidifiers, which help patients with tubes stuck down their throats, keeping the air going in at the right temperature and humidity.

The humidifier is still relatively new, and in many countries doctors disagree with F & P Healthcare's views on the right temperature and humidity levels.


The company's clinical research manager, Dr Stuart Ryan, says Tawhai's computer model confirmed their assessment of the right levels.

"There is also a huge amount of potential for developing new products and to modify our current products."

As a result, F & P Healthcare has become a funder of the Bioengineering Research Institute, which now boasts a budget of $4 million a year.

Coincidentally, Merryn Tawhai has just been awarded the inaugural Maurice Paykel Postdoctoral Fellowship.

The director of the Institute, Professor Peter Hunter, believes the market for Tawhai's work is almost endless. The institute has already had a taste of market success - and failure.

It sold a licence for its computerised model of the human face to a company called Life FX, which rose in worth to US$1 billion on the Nasdaq exchange only to collapse in the dotcom bust.

Six months ago the institute bought back its licence and now plans to develop its own applications of the technology, such as a computerised face that speaks the words you type into a computer.

"Teaching English as a second language across the internet would be one use," says Hunter.

But the really big one would be a drug discovery. Hunter is off to Switzerland next week to a conference sponsored by two major drug companies on using computer models to design medicines.

"They [drug companies] are interested in finding ways to speed up the process and cut costs, and computational models are a very important part of that," he says.

"This is potentially of enormous benefit to New Zealand if it all works out."

Hunter is not alone. Other scientists are heeding the advice of Masterton-born Nobel Prize-winning scientist Alan MacDiarmid at this week's Apec science conference in Christchurch to "think big".

"We must ask ourselves how can one's country play an important and unique role in the world economy."

Technologies developed for one purpose are being used in completely different industries.

Navman founder Peter Maire told the conference about his plan to transform his company from a marine navigation business into one that sells to the vastly larger car market.

Nigel Kirkpatrick of Industrial Research Ltd (IRL) aims to use technology developed to scan logs to scan human beings instead, shifting from low-value forestry into super-high-value medicine.

A report for NZ Trade & Enterprise has recommended that another IRL invention, a material conducting electricity without resistance, should be the basis for developing an entire new industry.

In this case, however, there is no obvious local firm that could easily switch its business into this new field. It raises questions about whether New Zealand has the right match between science and business.

Yoshio Matsumi from Japan's Itochu Corporation told the Apec conference how his company constantly trawls through the world's top universities and research centres looking for ideas to commercialise.

New Zealand has no such multi-tentacled businesses, apart from the local branches of multinationals.

Originally, therefore, our government research institutes were set up to serve the modest economic needs of farmers and local industries, environmental goals and social needs.

University research was supposed to meet all three kinds of needs - economic, environmental and social - as well as help students.

Today, public institutes such as IRL have washed their hands of small local businesses. Kirkpatrick says they are now referred to a pilot scheme IRL has set up with the Manukau and Wellington Institutes of Technology.

"Given that we want to develop world-class science, therefore we are saying we should support New Zealand industry that wants world-class science. That takes out a huge number of companies," Kirkpatrick says.

Colin Harvey, chief executive of animal remedies firm Ancare and president of the industry group NZ Agritech, says Crown institutes such as IRL and AgResearch now compete with local businesses, rather than supporting them.

"They see AgResearch as a competitor across everything from animal breeding to grasses. They have a very difficult time getting hold of that technology," he says.

The Crown institutes, and increasingly universities, are now driven by a need to maximise their profits - perverting their original goals of meeting society's needs into making money for their institutions.

Yet the examples of both IRL and the Bioengineering Research Institute also reveal the limitations of the old non-profit public research model.

Both, in the course of pure curiosity-driven research, have come up with new technologies of huge potential value to the world, but with no easy links to local businesses. That is often how science works.

"At Auckland University, something like 80 per cent of the inventions or discoveries are serendipitous. They are not done to order," said the chief executive of the university's commercial arm UniServices, Dr John Kernohan, in Christchurch.

In principle, UniServices and IRL aim to spin off new technologies to local businesses or license them out.

Stuart Ryan at F & P Healthcare is also impressed with the Bioengineering Research Institute's advisory panel, on which Healthcare sits.

"They have been very responsive to our needs, getting our goals built into their programmes," he says.

Industry in general, he believes, does not realise the potential riches locked up in our research institutions. One way or another, we need to find ways to unlock them.


New Zealand spends $1.44 billion a year on research and development (2002 figures).

* $768 million paid for by the Government.

* $535 million paid for by business.

* $136 million paid for by overseas funders and charities.