The Government's plan to boost the size and reach of Industrial Research Limited could end up being a waste of taxpayers' money, says a leading academic.
Prime Minister John Key announced last week that the capabilities of the organisation would be doubled over the next five years, turning it into an "advanced technology institute" with 700 staff - double the number currently employed by IRL.
The Lower Hutt-based Crown research institute works with industry to commercialise technology.
But University of Auckland science dean Grant Guilford said if the 350 additional staff working at the advanced technology institute were new appointments, their salaries would consume much of the extra funding promised by the Government.
Little would be left in the coffers for paying the indirect costs of the new employees or for funding their research.
Key said an extra $24 million to $30 million would be provided annually to the advanced research institute.
Up to $80 million would also be earmarked from the Future Investment Fund - which the Government plans to establish with proceeds of partial state asset sales - for capital spending on new buildings and equipment.
If the additional 350 staff at the advanced technology institute were each paid $50,000 a year, the annual salary bill for those workers would be $17.5 million.
Guilford said the main challenge around providing research support for New Zealand's manufacturing sector was not a shortage of world-class engineers and scientists, but a lack of funding and effective communication with industry.
Small-to-medium manufacturing firms did not have large amounts of capital to spend on outsourced research, he added.
"Certainly not enough to significantly defray the cost of 350 new scientists and engineers."
A spokeswoman for Minister of Science and Innovation, Wayne Mapp, said the funding announced on Thursday was in addition to IRL's current revenues of $60 million.
"As it evolves into the new advanced technology institute, it will become more and more attractive to manufacturers and businesses, who currently spend $1 billion per year on research and development," the spokeswoman said.
Guilford said a better approach from the Government would be directing the funding to the scientists and engineers already employed by New Zealand universities, which they could use to support manufacturing firms.
"Their salaries are already being paid and they are ready to get going now."
An advanced research institute that brought together university and IRL staff into a consortium would also be better use of the Government funding, Guilford added.
But ManufacturingNZ executive director Catherine Beard said there was a tendency for universities to be slow in developing research for businesses.
Beard said: "I once heard a big US multinational say you can get some really good stuff out a university if you've got a million bucks to put in."