Creating new plastic materials for 3D printing and designing cutting-edge sensor technologies will be among the first targets of a major Kiwi science collaboration launched tonight.

Funding of just under $33 million will go toward the Science for Technological Innovation National Science Challenge, the seventh of New Zealand's 11 sprawling science challenges to kick off.

Hosted by Callaghan Innovation, the project will focus top minds from three Crown research institutes, eight universities and one independent research organisation on developing new tech that will lead to commercially-successful breakthrough products.

"It will aim to enhance New Zealand's capacity to use physical and engineering sciences for economic growth with an emphasis on new materials, new manufacturing processes, robotics, automation and analytics," said Science and Innovation Minister Steven Joyce, who formally launched the challenge at Auckland University tonight.

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"We live in an environment where new technologies emerge every day, which will rapidly change and shape how we do business.

"To take best advantage of this, we must drive New Zealand's culture of innovation forward, beyond the immediate commercial horizon."

The effort will first focus on four areas: manufacturing technologies and materials, such as biopolymers; sensor technologies, like those to map groundwater flow, which had useful applications for agriculture; medical technologies for more personalised treatment of chronic disease, with a focus on diabetes; and data analytics that provided cloud-based decision tools for industry.

One key research initiative would work with New Zealand-originated biopolymers to create new, plastic-like materials suitable for 3D printing.

"Biopolymers use natural products, and so they can be difficult to work with. Solving this problem means biological waste could be used for 3D printing of a huge array of manufactured products, from engine components to furniture," Mr Joyce said.

Another project would investigate the fundamental physics of large-scale, sub-surface electromagnetic sensing, and its application for measuring groundwater.

"This project would revolutionise our understanding of groundwater flow by allowing us to measure the velocity of groundwater - in the region of millimetres per hour, over a scale of tens of metres - without having to drill monitoring wells.

"Understanding groundwater movement is crucial for making effective use of our agricultural resources and minimising the environmental impact of farming activity."

Translating science into commercial success key

Mr Joyce said New Zealand's innovation sector was now seeing some good progress, particularly in the close-to-market areas of high-tech manufacturing and ICT, "but this is really the over-the-horizon stuff".

"It's the kind of stuff that companies aren't yet ready to fund - it's five to 10 years out - but it obviously creates capability amongst the scientists, and also just pushes the boundary of what's possible.

"One of the important things is that Callaghan Innovation is chairing the challenge - and it is effectively a broker of the linkages to these companies, which will, I think, make it easier to commercialise some of it."

Mr Joyce said while much new research coming into New Zealand's innovation pipeline was being well utilised, he felt the country could "always do a lot better".

"We started seven or eight years ago from a pretty low base, and the sort of thing we've got to work on is the sheer size of our engineering and STEM and physical sciences areas."

"If you go through the university rankings released this week, you'll see New Zealand remains strong in social science and the humanities, but, outside of Auckland, a little less strong in some of the other disciplines.

"So we've got to bulk up those areas, and we are doing that - but that takes a bit of time to flow through to the sort of work you're looking for."

Professor Shaun Hendy - who co-authored the book Get off the Grass: Kickstarting New Zealand's Innovation Economy with Callaghan Innovation's namesake, the late Sir Paul Callaghan - welcomed the new challenge.

"I'm pleased to see the launch of this Challenge, which will help address the loss of science capacity at Callaghan Innovation by connecting it to researchers across the rest of the science and innovation system," he said.

Professor Margaret Hyland and her team had "done very well" to pull the challenge together.

"However, the challenge will face many of the same problems that plagued Callaghan's predecessor, Industrial Research Ltd: a widely dispersed industrial sector that has a limited capacity to absorb cutting-edge science and a thinly spread science sector that struggles to build the capacity it needs to be truly world class," Professor Hendy said.

"From my point of view, one of the most important aspects of this challenge is the research programme to examine how we can better translate science into commercial success.

"This may ultimately have an impact that extends well beyond the challenge into the whole economy."

Meanwhile, Mr Joyce told the Herald he was happy with the progress of the National Science Challenges, of which only four - "Healthier Lives", "Our Land and Water", "A Better Start", "Building Better Homes, Towns and Cities" - were yet to launch.

"I'm happy we've got seven underway and I'll be happier when we've got 11 away.

"A couple of them have taken a little bit longer to bring together and that's because of the collaborative model where you've got groups of scientists who are not used to working together having to sort out amongst themselves how best to do it.

"But I think it's well worth the cross-disciplinary benefit you get out of the challenges, which is quite different to perhaps a more specific project delivered to an individual team."

The new challenge money comprises $133.5 million over four years allocated in Budgets 2012 and 2013, and continuing funding of $30.5 million per year thereafter.

New Zealand's 11 National Science Challenges

1. High-Value Nutrition: Develop high-value foods with validated health benefits to drive economic growth (launched)
2. The Deep South: Understanding the role of the Antarctic and the Southern Ocean in determining our climate and our future environment (launched)
3. New Zealand's Biological Heritage: Protecting and managing our biodiversity, improving our biosecurity, and enhancing our resilience to harmful organisms (launched)
4. Sustainable Seas: Enhance utlilisation of our marine resources within environmental and biological constraints (launched)
5. A Better Start: Improving the potential of young New Zealanders to have a healthy and successful life
6. Resilience to Nature's Challenges: Research into enhancing our resilience to natural disasters (launched)
7. Science for Technological Innovation: Enhancing the capacity of New Zealand to use physical and engineering sciences for economic growth (launched)
8. Ageing Well: Harnessing science to sustain health and wellbeing into the later years of life (launched)
9. Healthier Lives: Research to reduce the burden of major New Zealand health problems
10. Our Land and Water: Research to enhance primary sector production and productivity while maintaining and improving our land and water quality for future generations.
11. Building Better Homes, Towns and Cities: Research to develop better housing and urban environments