An innovative nation with shoestring financing

Another week, another upset for a twitchy government — this time an actually trivial but politically scratchy Iraq kerfuffle. But what of deeper matters?

This is a government which has claimed to be for the future, not the past, for a surer-footed, more creative people, richer in our (carbon-neutral) environment, our society and our inner selves.

But you could be forgiven for thinking ministers rank building prisons for the dregs of past failures more highly than building laboratories to unlock the secrets of future successes.

A major OECD report on innovation to be released today will say we have good foundations on which to build an escalator to the top half of the rich league.

But we are not on the escalator. And some of the reason is that we do not do enough research, science and technology (RST). Which makes this report a must-read for those with a keener interest in their children’s dawning future than in their parents’ twilight years.

In its eight years the government has energetically set up “taskforces” and “working parties” and written “strategies” and “frameworks” — but not dedicated the resources to realise them. Each year around three times the amount goes into a fund for greedy baby boomers to tuck into when they turn 65 as goes to RST.

In an economy where the private sector understandably, though inexcusably, underspends on RST on a share-of-GDP basis compared with other developed economies, the government also spends under the OECD average (0.52 per cent of GDP against 0.68 per cent in 2006-07). Government spending has fallen in GDP terms these past eight years, though it lifted a little in this year’s Budget.

The OECD report diplomatically buries this sad fact on p78, though there are repeated references to the need for more funding in specific areas, not least the Marsden fund for basic, “blue skies” science, which it says is half that of the United States National Science Foundation in share-of-GDP terms.

The report details this economy’s advantages and disadvantages, the strengths of the RST system and performance and its weaknesses, threats and opportunities.

The good news is that the OECD researchers find an “innovative people”, some “world-class” biotechnology companies and a remarkably high level of scientific articles per million of population — in the top third globally, though a disproportionately high 60 per cent is in the “social and behavioural sciences” and “engineering, technology and mathematics are underrepresented by international standards”.

The report also commends a “sound macroeconomic framework and predictable and good business environment” with flexible markets, government awareness of RST’s importance, its “predictable policy environment and competent public administration”, “world-class competencies” in some Crown research institutes (CRIs) and universities, “competitive natural resource-based sectors” and “pockets of excellence” in software and film.

But it has identified more weaknesses than strengths, among them “shortcomings” in technology “diffusion”, low inward flows of new technology, limited outwards foreign direct investment, a “fragmented system of government support”, too many public research organisations and “excessive reliance on a few policy principles” inherited from the 1980s economic reforms which has left “truly stable funding exceptionally low”.

The government has made many qualitative improvements: better long-term funding for CRIs to build capacity and continuity (which infuriated the universities), research centres of excellence and private partnerships, seed capital help, prodding of institutions to collaborate and so combat fragmentation and tax system changes to incentivise private sector innovation and reward productive outward investment.

At this evening’s “celebrating innovation” launch of the report ministers will announce funding for climate change research.

But if grandchildren, not grandparents, are to be truly ministers’ focus they would also announce a big quantitative improvement: a strong upward funding overall path for RST. They could also logically emulate the Australian Labor party’s policy to pull all innovation-related officialdom into an special department and thereby recast development policy.

That would be future-looking fourth-term stuff. Forget Iraq.

* Professor Keith Jackson died last week. He was one of a very few political scientists in the 1960s, along with Bob Chapman, Austin Mitchell and Alan Robinson, who paid attention to actual politics in this small, supposedly dull country. Keith was an always courteous, always helpful, always interested friend to journalists then and for decades afterwards who needed local, instead of foreign, analytical tools to explain this country’s unique political habits. Keith stayed closely interested in real politics long after his alleged “retirement” from Canterbury University. He was the best sort of academic, at home in theory and respectful of evidence.