The research function will go to a new advanced technologies agency.
The Government earlier said enabling legislation for the agency – which will focus on new tech like AI and quantum computing – will be passed in the last quarter of this year, and the agency set up in 2026.
The Public Service Association has predicted a brain drain of scientists – many of whom have already been laid off from Callaghan – in the meantime.
But it seems the start-up advisory role is simply being canned.
“As part of the disestablishment of Callaghan Innovation, a number of products and services are being shut down,” a Callaghan spokesman said.
“This includes our Grow product, which has supported frontier ventures – companies driven by novel and potentially disruptive ideas and innovations – and other businesses with commercialisation.”
After Callaghan manager Richard Quin posted on LinkedIn about the business advisory group’s demise (see post below), Staples VR chief executive Glen Willougby replied: “You and your team at CI have been instrumental in supporting the clean tech, deep tech industry in New Zealand and off shore”.
“Personally, they have opened doors in the US and facilitated and developed exceptional opportunities for founders and CEOs.”
‘Hypocritical’
“The Government is sacking these smart and successful business advisers while loudly beating the drum about its economic growth agenda – it’s hypocritical, and makes no sense,” said PSA national secretary Fleur Fitzsimons.
“If the Government want to nurture the next Rocket Lab, then the wraparound services offered by the commercialisation team are exactly the support start-ups need to go to the next level,” Fitzsimons said.
“These are industry experts hired from the private sector who’ve been helping young companies navigate the commercial world and prepare them to scale up and succeed ...
“There is no Government agency picking up this work – the next wave of smart, innovative Kiwi entrepreneurs is being left high and dry.”
Fitzsimons added: “It’s ironic that the Government just last week announced additional venture capital funding [with a $100m top-up to the Elevate fund] but is pulling the rug from under the very service that helps start-ups get to the stage of being able to seek venture capital".
Brown: New agency should be based in Auckland
Auckland Mayor Wayne Brown this morning said he is establishing an “innovation and technology alliance” – a broad-strokes initiative that will involve public and private groups co-operating on strategies to promote the tech sector in the city.
His only immediate specific policy was a call on the Government to establish its planned research agency in Auckland.
Callaghan Innovation’s research operation was centred on Wellington and Lower Hutt.
Reti responds
“Planning for the new advanced technology public research organisation is still under way and decisions around its structure and location haven’t yet been made,” Science, Innovation and Technology Minister Shane Reti told the Herald.
“However, there is a case for the advanced technology public research organisation to have a presence in Auckland.”
‘Conflicting functions’
On the more immediate development of Callaghan’s 15 business advisory staff being shown the door, Reti said: “This Government is taking a different approach to stimulating economic growth through science and innovation”.
“We’re undertaking the most significant science reforms in 30 years and backing Kiwi innovators with targeted investments in young, innovative firms that can create higher-paying jobs and attract further investment.
“Callaghan Innovation was spread too thin across many conflicting functions – it struggled to work to a clear focused purpose, resulting in poor financial performance and an over-reliance on Crown funding.
“That’s why the decision was made that it should be disestablished and replaced with a new organisation focused on advanced technologies.
“I acknowledge that these changes will be challenging for staff involved, but I am confident that the science reforms changes will strengthen our science system and create more opportunities for economic growth over time.”
Although details of the new advanced research agency are still months away, the Government earlier revealed plans to consolidate Crown research institutes and science organisations – including plans to merge the Institute of Geological and Nuclear Sciences Limited (GNS Science) with the National Institute for Water and Atmospheric Research (Niwa), which is also acquiring the MetService as a subsidiary.
Chairs and boards for the new public research organisations were named last week.
The Government wants the sector restructure, including the new advanced technology PRO, to be achieved within the current $1.2 billion science budget – a contrast to across the Tasman.
Callaghan’s history
Named for Sir Paul Callaghan, Callaghan Innovation was created by the National-led Government in 2013 as Industrial Research Ltd (IRL) – a Crown Research Institute – was renamed and given an expanded role in supplying financial assistance to startups via direct grants and loans.
As Labour came into power under Dame Jacinda Ardern, Callaghan’s role diversified further from IRL’s more research-orientated function as the agency became responsible for administering a new tax break for research and development (which had little initial impact with NZ’s R&D as a percentage of GDP remaining stubbornly low next to OECD peers).
The agency entered its current - and final - restructure from a point of political weakness following a governance controversy.
In December 2023, the auditor-general delivered a scathing critique of Callaghan’s conduct in deciding not to award contracts to We Are Indigo/Manaaki, an Auckland-based company offering services to startup firms, in 2022. A report tabled to Parliament found failed or inadequate due diligence, transparency and handling of conflict of interest issues. Boardroom infighting followed.
Chris Keall is an Auckland-based member of the Herald‘s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
