"The R&D Growth grants are not about having officials try and judge what it is the right strategy or not," says Joyce. "But if you are engaging in R&D and spending a certain percentage of your turnover on R&D, and spending at least $300,000, then you qualify for that 20 per cent funding."
He is confident the changes to the Government's R&D grants system will benefit business.
Joyce stresses the Government is insistent that R&D is conducted in New Zealand. "We are less worried about the ownership and more concerned about where the R&D occurs. Fisher and Paykel Appliances and Endos are examples of where the companies are owned internationally."
He's also sanguine about the policy shift to ensure the equity is ultimately recycled so that others get a go. "It is not a scheme to line entrepreneur's pockets ... it is a scheme to encourage and build an ecosystem of R&D that captures the benefit of having the right researchers and being able to start their own company."
Joyce points to a 25 per cent increase in business R&D over the two-year period from 2012-2013 as measured by Statistics NZ. This was equivalent to 0.5 per cent to 0.58 per cent of GDP, he notes. The high dollar value has also driven firms to be more innovative. Though the the increase in innovation is driven in part by the ecosystem - more so it is out of necessity. "They are out there selling at a much higher dollar, and have to be able to set their price levels, be more unique and less price-sensitive to deal with the significant dollar appreciation."
Though dairy is still 20 per cent of New Zealand's exports of goods and services, ICT and high tech manufacturing together is currently just under 8 per cent. "That's the area we have to work on," he says, noting that high-tech manufacturing exports have grown at a faster rate than our wine industry over the past few years.
Joyce wants to see a big push on skills, particularly in the engineering sector. The biggest change he has noted around innovation hubs is the level of private sector engagement.
"I think the hub idea is great, but there is a potential tendency, to draw a ring around those existing players and say we're a hub.
"What I'm looking to see is governance structures involving private sector, research facilities and companies on the sites - we already have that happening in Palmerston North - so we get a genuine cross-pollination between public and private sector."
Callaghan's 1st year milestones
• Worked with 230 businesses on 800 different R&D projects
• Over 500 companies have received 750 grants worth $200 million
Organisation
• Recruited world-class executive leadership team
• Transferred 50 staff to two new Victoria University research institutes co-located at the Gracefield Innovation Precinct
• Stakeholder advisory board, led by Andrew Coy, appointed
• Strengthened sales capability
Incubators
• Transferred incubator support programme from NZTE
• Working with MBIE on new tech focused incubators which will administer the repayable grants scheme
• Two staff are working with the Product Accelerator - which has led to at least two dozen new R&D engagements
• Embedded a tech expert into another company as a prototype for Callaghan's Tech Experts capability
• Identified critical technology platforms supporting multiple businesses, and have begun hiring national technology managers (the first being in the ICT/digital arena - who has begun bringing companies together to identify common technology needs such as in the telematics and big data spaces)
• Took ownership of the Foodbowl (with Ateed), and are growing the number of companies using it to develop award-winning new products
• Discontinued involvement in the contestable funding process
Collaborative innovation projects
Took a lead role in the Christchurch Sensing Cities project - funding a health informatics pilot project and providing personnel and expertise
Partnerships
• Strategic partnerships signed with NZTE, NZVIF, the MacDiarmid Institute, Ateed, CDC, Lincoln, Scion, KiwiNet, Metro Group (polytechs)
• Became a member of KiwiNet
• Established links with EU innovation networks
Sponsorships
Motivating best practice through sponsorships of TIN100, the World Class NZ awards, IPENZ, Morgo
Plan
Completed three year business case, statement of intent, operating agreements, implementation plans and now have well established processes
Categories
• 381 Project grants which provided to the firm a discount of doing R&D of up to 50 per cent
• 40 Growth grants which generally are for bigger companies, larger amounts, typically provided a discount of 20 per cent on their R&D
• 343 Internships, to cover the cost of students or Post-Docs - the business applies for the grant
