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Innovation nation? More like stagnation nation

We’re trying to ride a wave of the future – but empty slogans alone won’t get us there. Professor Jacqueline Rowarth suggests we loosen the purse strings.

'Innovation nation’ trips pleasingly off the tongue, and is a goal for an increasing number of countries as they pour resources in to scientific research. But when applied to New Zealand, the term causes sceptical eyebrows to be raised. The problem is the evidence to back the description: high falutin statement on the Ministry for Science and Innovation (now part of the Ministry for Business, Innovation and Employment) website about ‘innovation ecosystems’, ‘targeted research’, ‘enabling technologies’ and ‘smart ideas’, in and of themselves, don’t make any difference to the actual outcome. 

The fundamental problem is that the government’s expenditure on R&D is dire – only 0.34 percent of GDP. Add funding for higher education and the total reaches 0.77. But in marked contrast with other countries, New Zealand’s government funding has to cover overheads and student loans, gobbling up over half of the investment. 

Business in New Zealand funds another 0.54 percent of GDP, doing so without the tax credits used in other developed countries to encourage investment. 

Overall, it’s a pretty small proportion of GDP, with much of the money used in maintenance (overheads and loans) rather than pushing back the frontiers of understanding. It isn’t, therefore, surprising that the country is moving ahead only slowly. 

The OECD Science, Technology and Industry Scoreboard for 2011 emphasises that innovation has a major role in lifting economies out of downturns and finding new and sustainable sources of growth and competiveness. 

Analysis of exactly where that innovation might come from is more difficult. For example, the OECD Scoreboard reports that in clean energy technologies, an area where New Zealand has the natural resources, a diversity of scientific sources highlights the difficulty of identifying a single major contributor to innovation. 

This makes the ‘targeted research’ concept, formerly known as the ‘picking winners’ concept, dubious in terms of a successful outcome. 

We don’t fund science in a way to make careers attractive and that means students don’t choose science at university (approximately only 11 percent of graduates are in the natural sciences), or even high school. 

In contrast, Korea, one of the most dynamic economies, with low levels of unemployment and solid public finances that place it near the top of the class in the OECD, has been pouring resources into research and science education (it has one of the highest rates of spending on R&D in the world). Over the last two decades it has had a very high proportion of graduates and PhDs in science and engineering, three times New Zealand’s in some years. 

In April the OECD reported that Korea recovered faster and more vigorously from the global crisis than most OECD countries. 

Korea is truly an ‘innovation nation’. New Zealand has lots to learn from Korea about the difference between wishful thinking and investment for the future.

This story originally appeared in Primary magazine. Click here to subscribe.