Published in the National Business Review 4 June 2004
The engineers' growth plan for the nation has gained only modest and qualified endorsement from the commentators nominated by the engineers' professional body IPENZ

The "Growing Smartly" report from IPENZ reviews NZ's growth prospects ten years after the reforms of science funding and a year or so after the launch of the government's Growth and Innovation framework and the merger of Industry NZ and Tradenz.

IPENZ argues that labour productivity needs to grow by at least 4% per annum, although it has been "more like one to two per cent over the last 15 years, " says President Ian Parton. On other factors IPENZ sees

• intellectual property as not well exploited
• the isolation of R&D from market intelligence as 'wrong"
• transfer of technology as 'not good'
• "unclear" national research priorities

"New Zealanders are innovative and entrepreneurial but at a low level - it's almost improvisation. The transfer of know how is poor and the level of technological literacy among business leaders is low."

On macro economic issues IPENZ is much closer to the harder line school of structural reformers:

• current rates of company tax are a 'disincentive'
• compliance costs are 'high'
• the tax treatment of R&D is 'barely adequate' and the
• RMA consent process is 'prone to delay ' with 'uncertain outcomes'

"Who would want to spend their capital in this environment?" asked Executive Director Dr Andrew Leland rhetorically, "it's not highly attractive."

Their solution?

• easier transfer of people between, government, research bodies and businesses
• IP based business leadership programmes
• more effort to get R&D people and the managers of capital talking
• research in universities and CRIs should be funded on different models

IPENZ argues that the current funding model leads to underfunding of industrial research, because the criteria for grants from the Public Benefit Research Fund favours scholarly work over 'fitness for purpose". In other words pure wins over applied as engineering schools and other research bodies fashion applications that will secure funding.

Research, according to the IPENZ approach, should be directed as both engineering and science, "as it is in the United States,"

IPENZ's inclusion of macroeconomic issues won some favour with the Business Roundtable's Roger Kerr. "Company tax is an issue, but so is personal tax.

"The thrust of the IPENZ work is that we need to do further work to develop the bridge between CRIs and industry. We need to focus on the blockages, but a large part of the changes needed lie in the general economic environment."

Business New Zealand's Simon Carlaw saw agriculture as having the best linkages between research and business.

"We haven't been able to replicate that elsewhere. There's been too much patch protection, empire building, fighting over resources and not enough working linkages. The development and application of technology needs to be industry driven."

474 words