So yes, as it happens, I did divide Queens Birthday between the Armageddon Comic Con Expo and reading the National Statement of Science Investment from the Ministry of Business, Innovation and Employment (MBIE). It was a pleasant weekend. The National Statement ( NSSI) is a surprisingly easy read, a consequence, I suspect, of having been pulled together quickly by a fairly small team. Armageddon was fun too. It just took me longer to write this post than I meant.
For a start, the Statement looks nice. I was always taught that serifs make small text easier to read so I haven’t got used to this on-line publishing habit of serif fonts in the headings and sans in the text. I can see why you do and know I can’t ask for it to be reversed in the printed documents so I’m just going to have to get used to it. The layout nice, the flow is good and there are lot of tables and charts which are, mostly, informative. And it’s nice to see red used in Government documents again.
Which is all good but what does it say?
- A certain amount of motherhood and apple pie but probably no more than is required to get it through the Minister’s office in election year.
- There has been a lot of change in the system recently, most importantly through the creation of Callaghan Innovation and the National Science Challenges
- Government funding for science will grow to $1.5bn in 2016/17, an increase of 70% since 2007/08
- The government aims to increase its funding from 0.56% GDP to 0.8% GDP (as fiscal conditions allow – and one presumes this doesn’t signal a desire to dramatically lower GDP)
- Primary agriculture gets around 24% of current government research funding and new funding will focus on sectors of future need and growth including ICT, health, high value manufacturing, and, before you farmers get comfortable on your high horse, processed primary products and environmental innovation (whatever that may mean exactly but you get the idea)
- It reminds us of the extra funding in this years’ Budget for the contestable pools.
Otherwise it says things will carry on pretty much steady as she goes.
Looking at the tables the funding stays roughly constant in dollar terms over the next ten years (which does mean either the Government’s predictions for GDP growth are low or it’s just too difficult to calculate and risky to get peoples hopes up).
The NSSI usefully divides the funding pools up into Investigator-led, Mission-led and Industry-led (See Chart 1). I guess you could criticise this for being input rather than output driven but it is clearer in signalling how things work than say Blue Skies (where work often finds application) to Applied (which often never finds an application). Anyway – it’s a usable framework.
From my perspective the most telling charts are Chart 6 and Chart 7 (sorry but this website doesn’t like pictures so I can’t post them). Chart 6 isExpenditure on Research by Purpose of Research and Sector which shows that the biggest total investment in research is in manufacturing with the primary sector not far behind. However the majority of manufacturing research is conducted by business while the bulk of primary sector research is conducted by government. Chart 7, Number of R&D Personnel by Sector, shows that, compared to other countries of a similar size, New Zealand has a far lower proportion of researchers in business as compared to government and higher education. I was chatting with Peter Morton at Science New Zealand and he thinks it’s a pity the Netherlands aren’t included in the comparator countries but I think Denmark has more the economy we aspire to and that is there.
To me the message of the two charts is that the proposed increased focus for future government funding on manufacturing and added value rather than primary production per se is sensible and that one of the most useful things we could do would be to get more of that research done by business. There has been a fair bit done in this area recently with Callaghan Innovation getting sorted, increases industry co-funded grants in the Budget before last, and the introduction of the Growth Grants, so perhaps steady as she goes for a while is warranted. Actually, I don’t like the Growth Grants as an alternative to tax credits for R&D. If the Government really believed that investment in R&D would lead to growth then they would agree that the tax lost in tax credits would rapidly be recovered. But I guess deep in Treasury they don’t have that belief (and politics is politics and the incoming Government in 2008 had campaigned against tax credits) so we get a gesture that is better than nothing in the 20% Growth Grants but not the game changer we might have.
The same is true with the ability of loss making companies to cash out tax losses on R&D announced in the last Budget. As I’ve said elsewhere, great idea, will help, but nowhere as much as it should because of the timid nature of the caps. I worry that when the scheme gets reviewed we will be stuck with the self fulfilling prophecy that it didn’t make a significant difference and will be stopped.
I do like the Primary Growth Partnership. The National Business Review is happily bagging it as corporate welfare for a sector that doesn’t need it but it has made a difference. At a Meat Industry Conference in 1997 I got sworn at for suggesting (along with many others) the industry should do some of the things that the PGP has now got going. Nothing that was exactly rocket science but clearly projects that could add value if you spent the money to get them going. (As an aside, if you want to see what happens when someone has vision and courage in an industry read Whey to Go about the development of whey protein products by the dairy people).
So overall, I think the directions signalled for Industry-led funding are good. Industry certainly seems to be responding by applying (despite the inevitable grizzling about the process) and the people I speak to are comfortable with the way things are going. They like to relative consistency with the former TBG schemes. And the amount invested by New Zealand businesses in R&D is growing.
Down the other end of the spectrum, in the Investigator-led funding, the Marsden is left alone having had an increase in the last budget. More steady as she goes. The issue that upsets everyone with the Marsden fund is overbidding but that is an intractable problem in the current system. Putting more money in is nice but doesn’t cut the overbidding for more than one cycle because you just have more people bidding into it as the cycle goes round again. I’ve always thought the fund is a victim of its own success in terms of prestige and career enhancement and the solution lies in ditching full-cost funding. Which is a topic for another day. The CoREs went a little strange but it looks like some more money will sort things for the moment.
Again, the Investigator-led end of things seems to me to be heading in the right direction and not doing too much more is the sensible thing to do. So what’s happening the middle with the Mission-led stuff?
I can’t tell.
There is a lot of money in there, spread amongst the CRI Core Funding, MBIE Contestable, Health Research Council (HRC) Contestable and the National Science Challenges (NSC). Looking at each chart and table on its own I think I can see what is happening but trying to get an overall picture is hard. The appropriation for 10 years of NSC Funding is around $660m – including reprioritised MBIE Contestable Funds. Looking at Chart 11, which lays out the potential funding for all the Challenges, I got a total spend on the NSC over 10 years (a slightly different 10 years from Chart 11 by the looks of it) as $930m odd. The amount that CRI Core funding will contribute is $570m (something like 30% of the total Core funding). The HRC will put in around $220m (or about 30% of its funding). I can’t get that to add up. Perhaps I got confused by the odd axes on the chart and maybe if I read off the axes and not the length of the bars it will be a bit better. OK, not really.
But I don’t think it matters too much. The conclusion is that a bit less than a third of all the contestable funding is going to wind up in the National Science Challenges. About which we know very little at the moment.
I said a while ago that it was dangerous to rush getting the Challenges going because they were important – an importance which is reinforced by finding out how much money they will involve – but it’s beginning to look like there are problems. It worries me that a system based around the inherent contradiction of an open and competitive process with only a single applicant for each Challenge has got such a large proportion of the science investment. Of the 10 challenges one has been announced as being awarded but that has yet to be contracted? The Challenges are asking for a new way of working together and new ways of meeting their targets. What targets? They won’t be clear until each Challenge is contracted. How can people be expected to open up across well entrenched organisational and intellectual positions when so much of their existing funding is at stake? The call is to do something new but the areas chosen have been key areas of research in New Zealand for decades. No one had any useful ideas until 2008? I understand the policy and even intellectual rationale behind the Challenges but in practice it all looks very difficult indeed.
The Challenges look to me like Frankenstein’s Monster, or the PBRF, very likely a good idea but before you know it the Monster has tucked your girlfriend under its arm and is rampaging across the countryside causing all sorts of unintended effects and sucking up all your resources. The creator is left torn somewhere between ‘OMG!’ and ‘isn’t that amazing?’ while the population run for cover. Or less melodramatically, the science-funding equivalent of the Little Yellow Digger (which has a happier ending). Already Souxsie Wiles – microbiologist and ardent science communicator – has expressed disquiet at not seeing her area in a Challenge and wondering where future funding for this vital area will come from. New funding for the MBIE Contestable pool may help but it’s not clear at all where this will go.
So until we actually get to see what the Challenges will do there is a huge hole in the middle of the Science Investment picture around Mission-led Science. The Statement has a lot of sensible things to say about the individual pieces but how they fit together is unclear.
In all of this it is obvious that the evaluation of performance of the investement is vital. The government will be spending over $1.5bn of the tax payers’ dollars each year and asking what it gets for them. This is a very, very complex problem and hard to cover in the 5 pages NSSI has available. To paraphrase Ray Davies, I’m not the world’s most visual guy but I don’t think Chart 9 helps. All I can see is a big red stop sign in the middle and I’m not sure this was supposed to be my main take away. The list of indicators given is good as a list of possibilities but too long to be useable in a measurement sense.
The government basically needs three things from its science system; national prestige -so New Zealand is seen contributing to the store of world knowledge, so it can draw from that stores and is recognised as a first world sophisticated nation; the science to address social and environmental issues; and the technical innovation to drive economic growth. Underpinning those three is an education system, primary, secondary and tertiary, that will provide the people you need to do them. The issue then is to choose indicators that relate to progress in achieving these results. Too broad and you have the attribution problem – monitor GDP growth and is the rise due to increasing the industry cofunded research grants or an increasing fashion for milk in China. Too narrow and you have the contribution problem – does an increase in patent filing actually lead to an increase in export growth? It’s a really complex problem and the section in the statement makes a start but you wouldn’t expect it to solve it. This is something to focus on in the feedback.
What is the feedback likely to be? I guess there will be a lot of “Well, [my favourite area] isn’t getting enough and should get more” by way of comment with maybe some hand-waving or, in the more advanced cases, moralising by way of justification. One of the pleasures of being in government is seeing the number of ways people can say ‘Give me the money and I’ll sort your problem.”
If you need guidance in formulating your feedback, MBIE have given you an 8 page form with 27 questions to answer. Some of them are very substantial questions. Reading through it I think I have had a go at the first part of number three with this entire post; How well do the different parts of Government’s overall investment system perform, both individually and in combination? Could settings be changed to improve their performance? If so, how? Twenty six questions to go, and given the time this has taken me I better get going to get it in by the closing date of August 22nd. I think I will mostly try to say to MBIE that we have tried a lot of new things recently so let’s see how they work out before doing too much more, and quite a few of the things we’ve been doing for a while are still OK so let’s leave them alone.
And I am assuming that whoever is preparing the summary of feedback is currently working on a piece along the lines of “On balance it looks as though our direction of travel is pretty much right.” I would be, Ministers being what they are. I think this is close enough.
