FRSTNews
December 2007

From the Chief Executive

This has been another busy, challenging and fulfilling year for the Foundation. Among the highlights, we have successfully conducted the first round of new investment processes under the umbrella of the Government’s Stable Funding Environment, in addition to announcing one of the biggest Public Good investment rounds since our creation.

I want to take this opportunity to thank all of our clients, large and small, for helping us to meet these challenges. We have enjoyed working with you and I have enjoyed meeting a good number of you as I have got around the country during the year.

We do understand that this has been a very busy year for research organisations, both with bidding and for implementing changed processes such as negotiated contracts with us. We appreciate your tolerance while we work to implement and refine these new approaches.

Recently I was delighted to attend the signing of two of the first negotiated contracts with Industrial Research Ltd. These contracts, which come under the Stable Funding Environment, make quite a difference for research organisations because they give more security of funding over a longer term than a contested contract. Four further negotiated contracts are ready for signing with NIWA.

Last month, I again had the pleasure of attending the Export Awards run by New Zealand Trade and Enterprise.

Each year at these awards, the Foundation is proud to present our Technology Commendation Awards to companies that demonstrate innovative design, development and application of technology in their businesses leading to export success.

The awards aim to encourage others to celebrate New Zealand business technology success stories, because if New Zealand is to continue to grow and prosper, we need to foster both technology development and success. They also recognise the key role that technology plays in our economy, and acknowledge that all research and development involves technology in some form.

Many of the companies that won export awards were assisted in their early days by Technology New Zealand funding from the Foundation.

An article about this year’s winners is included in this final issue of FRST? News for 2007.

Also featured in this issue is the call for entries for the 2008 MacDiarmid Young Scientists of the Year Awards. With a total prize pool of $50,000, I encourage all eligible researchers and scientists to enter the awards which close on 28 March 2008.

We have been investing significantly through our Technology New Zealand family of schemes in companies undertaking research to create new products and services.

The Minister for Research, Science and Technology, Hon Pete Hodgson, recently referred in Parliament to a report we prepared that looks at the outcomes for companies that used one member of that family, the Technology for Business Growth? scheme. It shows that many companies using the scheme over the past five years have reported significant increases in turnover, new products and exports.

You can find the report here.

Our 2006/07 annual report has recently been tabled in Parliament. It summarises our activities and achievements in detail. You can obtain a copy from our website or ask for a hard copy by emailing our communications team.

Best wishes for the holiday season.

Murray Bain

New Foundation Chair

Former Waikato University Vice Chancellor Bryan Gould will succeed Dame Margaret Bazley as the new Chair of the Foundation’s Board in May 2008, Minister for Research, Science and Technology Pete Hodgson has announced.

"Mr Gould brings a record of significant governance experience, strong and relevant connections to the research sector and an excellent understanding of government processes to the Foundation," the Minister said.

"I’d like to take this opportunity to thank Dame Margaret Bazley for her hard work; during her time on the board she has made a considerable impact and has implemented some significant changes around government investment in research, science and technology. I wish her well in all her future endeavours," said Pete Hodgson.

Public Good Science and Technology 2007/08 investment round

The Foundation has invited 27 organisations to submit full proposals for 149 concepts for the major investment round of the 2007/08 year.

The proposals are being sought for the Foundation’s Public Good Science and Technology contestable investment round, which has core funding available for the 2007/08 round of approximately $70 million a year over a number of years.

A total of 315 research concepts were submitted by 41 organisations requesting $232 million a year, which represents overbidding of 329 per cent of the funds available.

The 149 concepts accepted after assessment by Foundation advisory groups to submit a full proposal total $141 million a year, which is twice the final funds available. This is within the advertised overbidding range of 150-200 per cent for this stage.

"We are delighted with the many excellent concepts submitted in this stage of the investment round," says Foundation General Manager, Investment Strategy, David Johns.

"It is an unfortunate fact of a contestable process like this that some good concepts will miss out. Some of those being invited to submit full proposals must necessarily be eliminated in the final decisions, but we are confident that we have a robust investment process that will ensure we target the available funds to the research most likely to benefit New Zealand.

"As well as the contestable process, we are also negotiating 18 contracts totalling approximately $43 million a year over a number of years as part of the Government’s Stable Funding Environment initiative."

The $70 million contestable funds are being invested through four Foundation contestable processes – Infrastructure, Leveraging New Zealand’s Natural Resources?, New Materials, Technologies and Services?, and Primary Production and Sustainability?.

Proposals based on the approved concepts are due with the Foundation during February and March 2008. They will be peer reviewed in March and April and advisory groups will meet to assess the proposals in April and May 2008.

Final investment decisions will be made in the first week of July and applicants notified in the week beginning 14 July. The successful contracts will come into effect on 1 October 2008.

Entries open for MacDiarmid Young Scientists of the Year 2008

Entries are now open for the 2008 MacDiarmid Young Scientists of the Year Awards. The awards recognise excellence in New Zealand’s young researchers.

More than $50,000 worth of prizes are available, with the overall Young Scientist of the Year winner receiving $10,000 prize money and a trip to the UK to attend the British Association’s annual Science Festival. The five category winners each receive $5,000 and category runner-up placings receive $2,500.

The awards are hosted by the Foundation together with principal sponsor, Fisher & Paykel Appliances, and are decided through a rigorous judging process.

The competition is open to all post graduates undertaking research and postdoctoral researchers who have held a PhD for less than five years. There are five categories: Understanding Planet Earth, Science and Our Society, Advancing Human Health and Wellbeing, Future Science and Technologies and Adding Value to Nature. A special award will also be made for outstanding Masters’ level research.

Entrants have until 28 March 2008 to submit a summary of their research and academic achievements for the first judging stage. Winners will be announced at a gala function in Auckland in August, 2008.

Signing of major contracts for key IRL scientific research

Two of Industrial Research Ltd’s key areas of research have received funding worth around $17.5 million through negotiated contracts with the Foundation.

The money comes under the Stable Funding Environment process introduced by the Government last year. The contracts involve IRL’s Glycotherapeutics research programme and Information and Communication Technologies.

IRL Chief Executive Shaun Coffey says the funding is an endorsement of the innovative and world class work being done by the Glycotherapeutics and ICT science teams and the impact of their work on the New Zealand economy.

The Glycotherapeutics research programme has entered into a ten-year agreement with the Foundation and will receive $12 million over the first five years, with a similar amount available, subject to review, for the next five years.

The ICT programme’s overall agreement will also cover ten years, with the researchers receiving $5.5 million for the first two years and, subject to review, for a further 8 years.

Four top companies win technology awards

Four innovative companies have been awarded Technology Commendations by the Foundation for Research, Science and Technology in recognition of outstanding achievement in designing and applying cutting-edge technology. They are:

• Endace Limited (Auckland) – for its world leading network traffic monitoring technology

   

• Optima Corporation (Auckland) – for software systems that maximise use of staff and resources

   

• ZyGEM Corporation (Hamilton) – for its smart DNA extraction technology

   

• Fronde Anywhere (Wellington) – for its mobile banking, payment and two factor authentication technology.

The Technology Commendation Awards, now in their ninth year, were established to publicly recognise companies that have developed or applied new technology that has grown their business and benefited New Zealand. So far 28 companies have received the prestigious award.

Winners are entitled to use a special "mark of excellence" to promote their product or service and receive a trophy and certificate, which were presented at the New Zealand Export Awards on 15 November.

The judges for this year were Nevil Gibson from National Business Review, Carol Lee Andersen from Women In Technology, Hans Frauenlob from New Zealand Trade and Enterprise and Tony Price, the founder of Procam which consults to the high technology sector.

Changing the Foundation’s contract cycle

The Foundation is making a permanent shift to its contracting cycle for most new and existing public good science and technology contracts. The cycle will move from a 1 July start date (30 June contract completion) to 1 October start date (30 September contract completion). This will be effective from 1 October, 2009.

The change has been made for several reasons. During 2006, the 2006/07 investment cycle was temporarily extended by three months to a 1 October 2007 contract start date, because the Foundation was in the process of introducing the Stable Funding Environment. This means the current 2007/08 investment process is being contracted from 1 October 2008.

This extension also had other positive implications. When additional funding was announced in the May 2007 budget, the Foundation was able to incorporate new funding decisions quickly and efficiently, without having to wait up to another 12 months to contract out funds.

When the cycle extension becomes permanent we anticipate there will be other positive spin-offs including more efficient processes, a shorter investment cycle with lower transaction costs, and care with timing so Foundation and research organisation staff will not have to work over Christmas preparing contract proposals.

A stakeholder working party will be set up in early February 2008 to provide feedback about the proposed timeline and implications on other activity. Any feedback will be incorporated into the processes for 2008/09 by March 2008.

In the meantime, if you have any immediate queries, feedback or suggestions, please contact your business manager.

Finding markets for great ideas

More than 120 senior scientists recently attended workshops organised by the Foundation’s commercialisation team, designed to improve understanding of commercialisation processes and challenges.

The workshops were led by Steve Brown, a commercialisation consultant and former Technology Licensing Office Ambassador for the Massachusetts Institute of Technology (MIT).

Steve told the science leaders that inventions often achieve their first commercial success in areas not originally anticipated by inventors, highlighting the need to consider a range of routes for commercialising novel ideas.

He says it’s common for the ultimate user to find the inventor rather than the other way around. "In these circumstances the question becomes how can you help the market find the inventor more quickly.

"Many people with a new idea tend to conduct an exhaustive search for a buyer. That’s important, but it is equally as important to publicise your invention in an accessible way so that unknown users with unknown applications for the idea can find the inventor."

Steve encouraged inventors attending the workshops to not only publish articles in respected science journals and present papers at conferences, but also to put information on web sites and science blogs about the general characteristics of the new idea.

He says it’s also important to seek early feedback from potential users about appropriate markets for novel ideas. "If you describe what your invention does without divulging how it does it, you can get this feedback without jeopardising your patent position. The feedback may cause you to dramatically change the focus and priority of your research.

"Turning a good idea into a successful technology is not a linear process. The majority of ideas undergo huge changes between inception and their eventual application as they are adapted to suit what the market wants."

Steve believes these changes in focus make it harder to administer research resources and accelerating rates of commercialisation requires flexibility to reallocate resources easily to other more currently promising projects based on market feedback or technical roadblocks.

He says it’s impressive that several New Zealand funding programs provide researchers with this flexibility, which is often not available in other parts of the research world.

"Many researchers are unaware of the challenges and skill required to commercialise new ideas successfully; and, therefore, they don't fully take advantage of their embedded commercialisation teams." He says few researchers outside of New Zealand have these embedded resources.

Another opportunity to increase the rate of commercialisation is to concentrate resources. "Resources are often spread too thinly. I have seen a number of projects which were allocated one tenth of somebody’s time. Generally the projects that get allocated at less than half of a person year never get the critical attention needed to advance."

Overall, he says, a mix of earlier publicity for new ideas, more frequent market feedback, easier reallocation and concentration of resources, and greater use of embedded commercialisation resources should accelerate the rate of innovation in New Zealand.

The Foundation’s commercialisation team is working with teams within universities, Crown Research Institutes and other research organisations to improve commercial outcomes from more than $3 billion of Government funds invested in research and development over the last 10 years.

Foundation investments underpin export success

Foundation investment has helped achieve success for five of the seven winners in this year’s New Zealand Export Awards.

The IBEX Group took out the title of 2007 Supreme Exporter of the Year at the November function, recognising a phenomenal, 2500 percent increase in turnover in three years.

IBEX received investment from the Foundation in 2003 to help it develop controlled temperature technology which underpins substantial growth in its sale of chilling, freezing and sorting systems to the international food processing industry.

The Agritech, Life Sciences and Biotechnology Exporter of the Year is New Zealand Pharmaceuticals (NZP) which recently opened a NZ$10 million purpose built facility to produce carbohydrate compounds for a promising range of new drugs to treat cancers, heart disease and other life threatening diseases. The Foundation has been a key investor in research and development to build capability in chemical synthesis at NZP and has also supported development of NZP’s Just the Berries blackcurrant products aimed at the international functional foods sector.

Two other Export Award winners have received investment from the Foundation. They are phil&teds Most Excellent Buggy Company, which exports innovative baby goods, and Yarrows (The Bakers) Ltd which exports frozen dough bakery products to markets around the globe.

To find out more about this year’s Export Award winners click here.

Global Expert? reaches the regions

The Foundation’s expert assistance programme – Global Expert – was launched in several regional centres in spring in conjunction with regional economic development agencies.

Global Expert tracks down experts and organisations willing to solve challenging technical problems within 15 working days.

The first event was a seminar co-hosted by Enterprise Manukau on 30 October, which attracted engineers, marketing managers, and managing directors from a wide variety of progressive companies in the South Auckland area.

Mercer Technologies General Manager Chris de Klerk spoke there of his 125-year-old company’s efforts to focus and deploy innovation under the constant pressure of competition and the strong New Zealand dollar. He spoke of how Global Expert was helped him locate and interest leading international partners for his new product line in a growing market.

A second seminar run with Vision Manawatu was held in Palmerston North on 6 November, and a third in Dunedin on 21 November with the Otago Chamber of Commerce.

Feedback from participants showed they were impressed by how easy it was to access the Global Expert service, the speedy delivery, value and the wide range of experts available.

An event is being held in conjunction with the Canterbury Employers' Chamber of Commerce on February 20. It will showcase the Global Expert service and introduce businesses to local Foundation business managers and Chamber of Commerce representatives.

If you have been unable to attend a presentation and would like more information on Global Expert, please contact a Global Expert Specialist by calling;
Auckland (09) 912 6730 , Christchurch (03) 963 2070 , Wellington (04) 917 7800 or email globalexpert@frst.govt.nz.

Changes to Research Consortia? investment mechanism

The Foundation has made a number of changes to the Research Consortia investment mechanism in an attempt to make it easier for firms and research organisations to work together. We believe these changes will help to encourage proposals that are industry-led and have a broad objective of transforming sectors where there is no existing Consortium.

We will be releasing a revised request for proposal on our website early in 2008.

The key changes we have made to Research Consortia are listed in the table below.

MoRST consultation on two Government documents

The Ministry of Research, Science and Technology has released two consultation papers relating to research, science and technology in New Zealand:

• New Zealand Research Agenda
• An Advanced Skills Action Plan for RS&T

MoRST is keen to receive feedback on these papers both from organisations and individuals engaged or interested in research, science and technology. For the Advanced Skills Action Plan, MoRST is particularly encouraging individuals to make a submission, in addition to any submission made by their employer organisation. This is because this document sets out options for facilitating RS&T career paths and it is important to capture a range of individual experiences and perspectives.

The two papers, background information, and information about how to make a submission is available on the MoRST website. Written submissions on the two papers are invited up until the close of consultation on 18 January 2008. Interested parties should feel free to make a submission on either or both documents.

Please help make this consultation effective by bringing the website material to the attention of other people in your organisation and any other colleagues you believe will want to contribute.

All enquiries should go to: consultation@morst.govt.nz.