Increased funding for the commercialisation of ‘new Kiwi hi-tech’ is just more corporate welfare, according to ACT Leader David Seymour.
As reported by Reseller News, Science and Innovation Minister Steven Joyce recently announced $15 million of additional funding over four years for two schemes that speed up the commercialisation of new technologies developed by scientists and entrepreneurs around New Zealand.
“Under this Government, corporate welfare continues to rise,” Seymour says.
“So far, Joyce’s programme of corporate welfare has included payments for sheep given to a Saudi businessman, rockets launched off the Coromandel, and a boat-building company owned by the world’s seventh-richest man.
“If Mr Joyce really thinks that investing in these businesses provides a good economic return, he should invest in them with his own money and reap the benefits, without putting the overburdened taxpayer at risk.”
According to Joyce, encouraging the development of new export-oriented high-tech businesses is a key part of the innovation stream of the Government’s Business Growth Agenda.
But for Seymour, corporate welfare now costs New Zealand households over $750 a year.
“Meanwhile, the Government says that the conditions are not right to cut taxes,” he claims.
“If the Government cut all corporate welfare, it could cut the corporate tax rate from 28 percent to 22.5 percent, or could abolish the top income tax rate of 33 percent.
“Giving households and businesses their tax back will let them decide for themselves what best suits their needs.”
Despite Seymour’s criticism, the investment round was welcomed by the Kiwi Innovation Network (KiwiNet), who supported Joyce’s plans to boost funding into the commercialisation of publicly funded research by $12 million over the next four years.
KiwiNet is a consortium of 15 universities, Crown Research Institutes and a Crown Entity established to boost commercial outcomes from publicly funded research.
MBIE’s PreSeed Accelerator Fund provides universities and Crown Research Institutes with funding they can allocate on MBIE’s behalf for early-stage commercialisation of new ideas to maximise the commercial benefits of science to New Zealand.
“PreSeed plays an essential role in turning research discoveries into new products, services and start-up businesses - it’s science powering business innovation to grow exports and create jobs,” says Dr Bram Smith, General Manager, KiwiNet.
“Over the last decade every $1 of PreSeed invested has resulted in $5 of business investment in the resulting high-tech opportunities.”
An independent review on the impact of the first ten years of PreSeed Accelerator funding released in October last year confirmed that more publicly funded science discoveries are getting to market after a decade of investment.
Smith says the 573 projects reviewed resulted in more than 386 licenses, numerous start-ups, and other commercial deals that have the estimated potential to generate at least 460 jobs and up to $3 billion in export revenues for New Zealand.
“Actual returns to the research organisations alone have already reached $188.2 million, with many more projects still in development,” Smith explains.
As a national network of New Zealand’s publicly funded research organisations, the Kiwi Innovation Network is one of several organisations that administers PreSeed.
KiwiNet’s 15 partners are represented on its Investment Committee, which meets every six weeks to review projects and allocate PreSeed investment. Research organisations must match PreSeed 50/50 with business co-investment or their own investment.
“The KiwiNet partners are passionate about working together to lift commercial capability across the science system to drive economic impact,” adds Andrew Turnbull, Chair of the KiwiNet Investment Committee.
“There are many exciting hi-tech commercial opportunities in universities and Crown research entities. PreSeed investment is invaluable to powering up these opportunities on a path to business success.”
Recent successes include 11Ants Analytics Ltd, a cloud based retail and airline data analytics platform, which was conceived at the University of Waikato, nurtured by PreSeed and purchased last year by a joint venture between Air New Zealand and Aimia Inc, a Canadian based data-driven marketing and loyalty analytics company.
“It’s tremendous to see Government recognition of the importance of both early stage IP and small business growth with this significant increase in investment,” adds Tenby Powell, Chairman of WaikatoLink, the commercialisation company of University of Waikato.
“We have in New Zealand a proven ability to commercialise research, build sustainable new businesses and, in so doing, create new job opportunities.”
Hon Ruth Richardson, Chairman of KiwiNet, sees MBIE’s announcement of additional investment as a show of confidence in the fund’s solid track record of performance and a desire to realise significant untapped potential.
“After five years of activism to lift the commercialisation of research, KiwiNet is pleased that the Government has the confidence to back more substantially the proven track record of the PreSeed Accelerator Fund,” Richardson comments.
“Extending the funding will lift the pace of the commercialisation of innovative research and make a tangible difference to improving New Zealand’s economic performance.”