Science investment hobbled by “fiscal conditions”

The loudest words in Steven Joyce’s shiny new National Statement of Science Investment (NSSI) are “as fiscal conditions allow”. Does that actually align with “investment”?

First, note the very word “investment” suggests a shift in cabinet thinking from its “spending” fixation.

Joyce built a successful business. Such businesses don’t just keep a beady eye on expenditure. They raise capital or borrow to invest to expand and so lift the return to the owners.

Some investment is in the enterprise’s infrastructure and some in product, process and marketing innovation.

Bill English, the “fiscal conditions” guardian, has invested in roads and broadband with capital from selling shares in your electricity companies. Roads and broadband are not seen as “cost”. “Fiscal conditions” are not the determinant.

But so far English has been unwilling to invest in the road to higher productivity and higher incomes. Science has been a “cost” — consumption, not infrastructure.

A quasi-parallel is the Superannuation Fund. Had he borrowed to go on building it to part-fund baby-boomers’ 2020s pensions, the country would have made handsomely on the deal.

English is not an entrepreneur. John Key made his money trading.

So the investment theme is an important shift in the cabinet’s science words, if not yet its action.

It widens the objective from measured results in applied technology — Joyce’s focus hitherto, particularly via his Callaghan Institute — to doing more of the science that sits behind technology. Joyce’s criterion was “commercialisation”. Now “investigator-led” and “discovery-led” are added.

There must be “strategic direction” aimed at “maximising long-term benefit,” Joyce said at the launch last week.

So “excellence” (Joyce’s translation: quality) has been added to “impact” (translation: eventual benefit), within what the NSSI calls, in the adspeak that now infests official documents, “a highly dynamic” system.

Another important NSSI first is that environmental and social research is valued as contributing to economic wellbeing, not just a nice-to-do cost.

But there is still in the NSSI a lot of the Joyce instinct for organisational rejigging. A big new one is that the Joyce-monster Ministry of Business, Innovation and Employment (MBIE) will put its three-year allocations for various science branches into one continuous stream. That gives researchers more opportunities to bid.

The other main funds for discovery-led research are: the Marsden Fund, a study of which by Motu Research has found that the research it funds leads to more research output in addition to the output it actually funds; “core” funding of Crown research institutes (CRIs) “to meet their core purposes”; the national science challenges, a priority list funded half by MBIE and half from CRI core funding; centres of research excellence hosted in universities; the performance-based research fund (PBRF) for university researchers on the basis of publication in international journals and citations by others of the papers; and the Health Research Council (HRC).

CRIs are sceptical of the NSSI. Their core funding has been frozen since 2011, a factor in AgResearch’s sackings last month, which Joyce called “right-sizing”. Government agencies are reprioritising or switching some work to consultants who feed off CRI work. CRIs fear single-stream MBIE funding will favour universities, because much CRI science is New Zealand-focused and less attractive to international journals or involve unpublishable CRI intellectual property and because CRI scientists, unlike university ones, must account for every hour spent on repetitive applications.

CRI “right-sizing” worries a former science minister, who points to our “very vulnerable, imported grass-based ecosystem” which needs scientists on tap who can respond “if something pathogenic got loose in grasslands or in soil microbes” or a “rare and not-yet-described bovine condition” takes hold.

Some, including Labour spokesperson David Cunliffe, worry about the effect on research of constraints on university funding, notably of post-doctoral scholarships.

Cunliffe, who has a 40-strong business group feeding into his policy development, sees no pathway in the NSSI to get business research investment up to its target of 1% of GDP (from half that), which would still be way below the OECD average, nor to realise the NSSI aspiration of far more high-tech firms and jobs. (Labour, miserly in 1999-08, has yet to do its funding numbers.)

And the NSSI’s “as fiscal conditions allow” condition on government funding will in a post-rockstar economy work against that funding going quickly from around 0.6% of GDP to the 0.8% OECD average.

Still, there is a new benchmark: NSSI charts set New Zealand in the context of Chief Science Adviser Sir Peter Gluckman’s six small advanced countries (soon to be seven). Israel’s total is nearly 8% of GDP.

Their successes make a case for investment. English is said to be rethinking. Whether he does will be a big third-term benchmark.