Do emerging researchers have a future in NZ?

There’s a lot of angst in the scientific community about the apparent whittling away of opportunities for emerging scientists in New Zealand as a result of the dismantling of the FRST postdoctoral fellowship scheme.

Dr Massaro - concerned about postdocs
Dr Massaro – concerned about postdocs

This manifested itself late last year in a letter being circulated that was signed by 560 scientists which complained that the the lack of postdoctoral opportunities for the “vast majority of New Zealand early career researchers adds to the ‘brain drain’”.

Numerous issues with the newly established Rutherford Discovery Fellowships were identified by scientists, who were chiefly concerned that the fellowships were available to scientists more advanced in their careers, potentially shutting out early and mid career scientists who need financial support from beyond a scientific institution while they establish themselves in research.

All of this was under the spotlight yesterday at the New Zealand Association of Scientists conference in Wellington. if you weren’t there you can pick up the thread by searching the #nzas and #nzasconf hash tags on Twitter, which several of us were using to tweet throughout the day. Podcasts of many of the presentations will also be posted on the NZAS website over the coming days.

The Rutherford fellowships

Mindful of the vocal opposition to the make up of the new fellowships, the government late last year embarked on some consultation with scientists over how they might be improved. that resulted in an update from Science and Innovation minister Steven Joyce last week outlining some changes to the scheme, which were also outlined by the MSI’s Chief Scientist Prue Williams at the conference yesterday. They include:

  • Focussing the award process on selecting excellent researchers who have leadership potential
  • A priority on the repatriation of talented New Zealanders
  • Reducing the application period to 3-8 years after receiving the PhD (previously 3-10 years)
  • Allowing a broad range of leadership qualities to be supported by removing the distinction between Tier 1 (leadership potential) and Tier 2 (demonstrated leadership) researchers
  • Changing the expectation that Fellows receive permanent employment from their associated institution, to an expectation that they be contracted for employment over the full term of the fellowship

One of our priorities is to develop New Zealand’s skill base for innovation. MSI will do further work with the Ministry of Education and the Tertiary Education Commission to ensure post doctoral researchers within NZ have sufficient opportunity to stay in the country and contribute to the New Zealand economy and society.

Dr Williams explained, rather apologetically, that issues remain with the fellowships that are outside the control of the MSI, hence the undertaking outlined in the last bullet point above.

How did scientists react yesterday? The general tone seemed to be that the changes were merely tinkering at the edges and that don’t address the deeper issue that opportunities for emerging scientists – including those wanting to come back to New Zealand to continue their careers, are very limited and that we underspend on postgrad fellowships to the detriment of the science system. However some saw the changes as a sign that politicians are willing to listen and engage and make change based on consultation with the science sector.

Academic overheads

One well-gnawed bone of contention yesterday was the issue of academic overheads and the impact they have on the affordability of postgrads for scientific institutions.

As University of Canterbury environmental researcher Melanie Massaro pointed out in that letter last year:

Given the high overheads associated with salaries for postdoctoral fellows (~120% at most NZ Universities), it is not economically viable to include postdoctoral fellows in grant applications. This raises the question, where do all these highly‐trained and talented early career researchers exercise their skills after completion of their PhDs?

She repeated her concerns yesterday, pointing out that in the US, the overhead rate sits at around 50 per cent and is even lower (between 30 – 40 per cent) in some European countries. This claim met with outright denial from at least one researcher, who has received funding from the US National Science Foundation and claims the overhead rates are in fact comparable.

One thing became obvious yesterday – a lot of scientists are confused about the status of overheads, how they are calculated and the impact overheads have on the attractiveness of hiring postdocs. indeed, it appears there could be greater transparency or at least clarity in this area. I managed to find this explanation of the overhead calculations on the University of Auckland website

The calculation is undertaken as follows:

  1. The total indirect costs of the institution supporting Externally Funded Research are determined as A.
  2. The total direct salary component associated with Externally Funded Research is determined as B.
  3. The Research Overhead Recovery Rate is then determined as the ratio A/B, expressed as a percentage. The rate is thus a function of both indirect costs supporting Externally Funded Research and researcher salary levels.

In the period 2003 to 2007 The University of Auckland overhead rate has been 121% of the direct salary costs of doing the research. Because salary costs have been increasing at a greater rate than the indirect costs of doing research, the overhead rate for 2008 has been recalculated at 114% of the direct salary costs.

Does New Zealand’s academic overhead rates discourage postdocs from being employed? Probably, in some cases, due to the inherently greater cost of hiring postgrads. Why hire an expensive postdoc when you can get two cheap and keen PhD students?

Academic burnout

There was a lot of discussion at the NZAS conference about the pressure on emerging scientists to be masters of all trades – not just good at science, but savvy at communicating their science, as well as networking and understanding the needs of the business community.

Speakers throughout the day expressed differing views on this. Those in business professed a desire for scientists to develop these skills and to see the ultimate outcome of their science as having a beneficial impact on the economy. Others suggested it was unrealistic to suggest all scientists could – or should – develop these skills. Phil O’Reilly, of Business New Zealand, surprised many by saying that he didn’t expect all scientists to gear up to work with the business sector. That would be like trying to make them “drink from a fire hose”, was the way he put it.

But with the influence of scientist and entrepreneur Sir Paul Callaghan looming large over the conference, the theme seemed to be that scientists benefit greatly from upskilling in these non-science areas. GNS Science’s Dr Kelvin Berryman, questioned the level of supervision support for PhD students, which can typically be as low as two hours a week. If scientists were expected to be multi-skilled, more time was needed to work with them and it wouldn’t always be appropriate for their science leader to be dishing out commercialisation tips.

Most of the old hands on the bill – IRL’s Dr Richard Furneaux and Izon’s Hans van der Voorn, suggested that science was hard work any way you looked at it, and if you have an entrepreneurial bone in your body as a scientist, you simply had to gather the skills you could, where you could, to get ahead.

Certainly, I put in an appeal at the end for all scientists to spend some time honing their communication skills which not only help scientists engage with business, government and the public, but makes them more effective in articulating their requests for more money!

One thing that became clear during the day is that there are now numerous organisations representing emerging researchers – Chiasma, Stratus, MeSA, Creative HQ, Spark, Entire and Audacious among them. This is great to see – but there needs to be some co-ordination among them – perhaps via the NZAS.

Science leadership

The conference kicked off with the politicians – primary industries minister David Carter standing in for Steven Joyce, who was overseas, and David Shearer chipping in on behalf of Labour. I received a fairly muted response when i asked participants on a panel discussion at the end of the day, what they thought of the messages coming from our political leaders.

Some seem jaded with the focus on innovation, while others who have been through countless economic transformation programmes and initiatives see the current policies as more of the same. David Carter addressed concerns that the word “science” is missing from the title of the new Ministry of Business, Innovation and Employment, saying it was impossible to reference everything in the title, but that science would be a valued part of the mix. He also suggested, that the existing MSI may be largely ring-fenced and kept intact within the new ministry.

Carter didn’t take questions which was a shame, but David Shearer did. While he went over his usual points about following the examples of Nokia and Israel, he didn’t reveal what Labour would do differently – other than referring people to Labour’s science manifesto.

The upshot

It was a genuinely productive and informative day. Emerging researchers face a lot of challenges in securing a future for themselves in New Zealand. Money is tight, competition for a small number of fellowships is fierce. The momentum is swinging towards commercialisation and applied science.

But i got the sense that there is great science going on here, we have bright and ambitious scientists and, on a small country, the benefit of being able to get the ear of the people who can bring about change. I look forward to the NZAS kicking along all of these issues. If you are a scientist join up with the NZAS – membership, I’m told is free if you sign up in the next few weeks.

Emerging researchers most definitely do have a future in New Zealand and the more engaged they are in the issues and in articulating the value of their science, the more likely they are to see change that will help secure their futures here.


  1. possum

    >Why hire an expensive postdoc when you can get two cheap and keen PhD students?

    So postdoc career possibilities depend on how accountants choose to allocate overhead costs.

  2. Bruce Hamilton

    One of the unfortunate aspects of self-motivated OE is that many NZ potential employers regard them as over-qualified or over-skilled for research positions, unless there is an obvious alignment between recent research and the proposed position. Most employers give brownie points for OE as it shows initiative, especially if the applicants have upskilled whilst overseas, and are committed to returning to NZ, or already here.

    Returning researchers don’t require the level of d new immigrants may, and are often preferred over oversea candidates, especially as their local referees may be known to employers. The current record I’m aware of is an overseas researcher arriving on Friday, and resigning on Monday. An unwanted hassle and delay filling the position. The issue comes down to employers assessment of individuals, combined with minimum energy path, which is usually a local, if suitable.

    My limited experience with advertising positions is that overseas applicants represent a very large fraction, and most are eliminated in the first round. If they reach interview stage, those that have taken time to find out about the employer tend to impress.

    However, I’d suggest that freedom emerging researchers should just follow their desire for knowledge, and those who worry about future employment try to partner an employer and work with/for them for several years before heading offshore.

  3. Elf Eldridge

    Maree – careful with ‘….driving away our most talented emerging scientists’. Most emerging scientists in my experience WANT to go overseas only in part because of the job climate here – the driving factor for most of them is that they simply want to travel and gain more experience (and from the comments floating around post-conference it seems that most scientists believe this experience gained is essential to develop the best scientists). Hence the focus should not be to stop driving them away, but rather making NZ a viable candidate for them to return to, and looking at ways to make them return once they have developed their skills.

  4. maree

    As Justin Hodgkiss said, we need more good jobs, we need to better connect the skills of science graduates with the needs of employers, and we really need to stop driving away our most talented emerging scientists. I wonder then, if anyone could tell me the value of university staff visiting other countries to actively recruit postgrad and PhD students to be educated in NZ? Aren’t they competing in the same market for jobs and funding as our NZ students?

  5. Grant Jacobs

    If anyone is looking for Joe Public’s feedback on the Campbell Live story, there‘s plenty on the Campbell Live Facebook page – over 200 comments as I write:

  6. Chris Bumby

    I took my 40% leakage figure from Warren Smart’s (TEC) presentation on monday. His talk was drawn largely from this document:

    He found that only ~57% of PhD graduates in the natural and physical sciences (2003 cohort) were in employment within NZ after 4 years. (This captures leakage in its broadest senmse, which means it not actually the same as “being overseas”. However its the only data I’m aware of that comes close to describing the situation).

  7. Elf Eldridge

    Michael – I gathered a bit of feedback from emerging scientists pre the NZAS conference at . It’s only anecdotal, but still quite compelling as almost everyone comes out with the same message. Additional to that is the data available from PhD graduates from the 2006 census which you can acess in its entirety here:

  8. Michael Edmonds

    Does anyone know if there is any data on how many New Zealand PhD graduates remain in New Zealand and/or remain in science related careers? If not I think it would certainly be a worthwhile thing to do to find out such information.

  9. Chris Bumby

    Hi Simon, nice to see you here!

    The overhead discrepancy between postgraduate students and university post-docs is absolutely a matter of internal accounting by the universities. However the universities, receive revenue from both education and research activities, and it is the cross-subsidisation that occurs which distorts their pricing of research labour.

    Universities receive TEC funding for PhD students(ultimately), and these students also pay fees. In effect, this revenue subsidises the institutional research overheads that are incurred. Post-docs by contrast do not receive this “education subsidy” and hence are much more expensive to the research contract.

    I have to say though, that I am very uncomfortable in talking about the career development of our scientific workforce, purely in terms of commoditised labour units on short-term contracts. If we believe that there is a place for a government funded R&D system as a repository of scientific knowledge and technical capability for the national good, then we must recognise that establishing stable career pathways for our scientists is an imperative to maintaining human capability. At the moment the NZ taxpayer invests >$250k per PhD student, but upon completion of their degrees we then step right back and allow >40% of them (and quite possibly a greater % of the ”brightest and best”) to leak overseas never to return.

    (Note – going overseas for experience is good. Never returning to NZ is bad.) Given the life stage of most post-docs, you have less than 3/4 years post-graduation to get them back into NZ before they settle down somewhere else, get married, have sprogs and cease to be mobile. You could argue that foreign post-docs also come here and stay (hey I’m one of them!) but: (1) We don’t have anywhere near enough post-doc positions to offset the PhD leakage (for the above reasons)
    (2) If NZ Inc. intends to rely solely on foreign PhDs to fulfil its R&D needs, why are we training any PhD students at all?

    A government funded science system should not be prey to all of the market instabilities that are present in the private sector. If government funded science cannot deliver a stable system which retains talent and maintains national capability, then what is the point of it?

  10. Simon Arnold

    The issue of overheads is only really relevant to how institutions decide to price their offering. The problem is that the institutions bid and contract for supplying inputs, rather than the production of some research outcomes or outputs.

    What happens in the private sector is the lead team sells the outcome, and then gets the cheapest (or perhaps most cost effective) people to deliver the goodies.

    If I were you all I’d start refusing to say who will do the job apart from the leads, and simply get the funders to buy the outputs/outcomes. After all the institutions are better qualified to judge who best to do the job than the funders (and if they aren’t they should have their accreditation removed).

  11. mvgalea

    Early-mid career researchers (EMCRs) around the globe are feeling the impact of these challenges. The UK, USA, Canada and Australia are also discussing what changes could be implemented to address the postdoc bottle-neck and provide greater mid-career support. Australia and NZ face additional unique challenges: (a) smaller scientific communities; (b) geographic isolation; (c) smaller funding ‘pots’; and (d) fewer non-academic career paths available to the >80% who ultimately leave academic research.

    The Australian Academy of Science recognises these challenges and in 2011 formed the EMCR Forum to provide a voice for our future scientific leaders. The Forum advises the Academy on EMCR-related issues in all disciplines, to inform their policy recommendations to government and other key groups. This year, the Forum is organising a national meeting themed ‘careers in Australian Science’ and like NZAS 2012, we are keen to hear from the experts of tomorrow.

    As Forum Chair, I congratulate you on the productive NZAS 2012 meeting, and look forward to seeing things move forward for NZ’s emerging scientists!

    Twitter: @MVEG001

  12. johnmd

    I joined DSIR at a time when (in my area at least) PhDs were not all that essential. This limited my ability to move elsewhere once the chaos started that culminated in the formation of the CRIs — more stability in some respects in an organisation that was for ever reorganising. My move to Australia after 4 years of this gave me a huge professional stimulus, albeit the move came too late to progress far in the news career that I was charting for myself.

    What I take from this discussion is that the very generous provision that DSIR had for funding specialist training had a great deal going for it — one trained people who had already demonstrated their value and for whom there was slot. I wish now that I had taken advantage of it!

    DSIR had in many ways become a sleepy organisation. Much worse than that sleepiness, however, were the contortions of PGSF funding and science delivery to fit an artificial market that met Treasury specifications. To a remarkable extent, the continuing changes in PGSF science since 1992 have been designed to restore key features of the old system. That process seems far from finished.

  13. Bruce Hamilton


    Sorry, I didn’t respond to the “DSIR” question. I think that train has left the station – despite the fact that some people ask for the DSIR when seeking technical advice.

    The alternative is to ensure that marketing arms of research institutions and funders collaborate to minimise duplication and transfer outside enquiries to the appropriate provider(s).

    I believe that there may be plans to improve collaboration between providers, which is good, as MSI/MoRST/FoRST hasn’t presented an effective shopfront for clients.

  14. Bruce Hamilton


    It’s not just the companies, DSIR and other govt ministries that had needs for graduates would canvass Universities to identify students who would be offered cadetships, perhaps after their first year, and would partially fund their university education, and later specialist education overseas ( for up to four years ) in return for bonding to the organisation, with the option of buying out of the contract.

    CRIs decided to abandon that programme, and about the same time industry management also moved to “just-in-time” purchase of services, rather than maintain in-house capability, as that presumably immediately reduced costs and resulted in improved management bonuses. R&D is expensive and often doesn’t provide returns even after a decade or two, just ask global pharmaceutical companies..

    I suspect there would need to be some serious taxation/financial carrots required to reinvigorate any sort of cadet programme, just like there was with the apprentice programme, after they disappeared for some of the same reasons. Cadets represent young brains that can offer new perspectives and solutions.


    In my experience, interns are something different – like holiday students they typically have a career path outside the organisation and are considered as cheap pair of hands who focus on the specific objectives that their institution has agreed with their employer. Unless the company is impressed and offers them a position, they will move on, as they aren’t part of an internal “cadet” programme. The survival/success of the employer isn’t a concern to them. As I noted above, interns are not “free”, in that comapnies have to provide at least supervision and training, but in return may access some expertise they don’t have. However, many SMEs just don’t have the spare resources to invest in casuals, and only use them in times of distress ( loss of market share. process failures, etc etc. )

    Cadets are people who have been designated as the future of the business, and have been selected by the business owners/managers. Cadets aren’t just in R&D, if they show inclination/ability they can develop in any area of the business. They are assessed much more frequently, usually have a mentor(s) to ensure they are on track, and have personal targets that are both academic and technical. Companies heavily invest in them for the future, and training timelines would seldom be less than 4 years. They can come from any stage of education, but usually after evidence of ability and enthusiasm, eg from 1 – 2 years of tertiary education to several years of post doc.


    Today, many companies no longer understand many of the complex technologies embedded into products/processes they use. They rely on supplier agreements or consultants to provide technical support. Those suppliers have rationalised their R&D to regions, eg Australasia, and don’t have loyalty to clients, just want to sell as many of their products and services as possible. Suppliers encourage clients to purchase support contracts, charging high rates for distress and retail rates for components replaced during preventative visits. The problem is that the equipment will perform the same for all clients, with no chance to improve it – unless employees understand the process, equipment and desired outcomes.

    An example, a company has a problem they have been paying consultants reasonable sums to fix over several years. The consultants have reduced the problem to acceptable levels, but it still exists because it’s not in the interest of the consultants to provide a simple permanent solution. The client is happy to pay for their intervention on an “as required” basis. A cadet working in the company’s R&D area was asked to investigate and improve the process efficiencies and, after discussions with experts and using the Internet, realised a permanent solution was possible and available. He performed some experiments and now knows more about the technology than anyone in the company, and has been asked to investigate other technologies peripheral to the core business to improve competitiveness.

    Cadets also use relationships developed and knowledge gained during their education to help their employers. As noted above, the employer often funds continued education to help build the knowledge base of the company. Cadets may be loyal because they realise their future is linked to their employer’s success.

  15. Grant Jacobs

    “That’s why I propose that companies should be encouraged to capture “cadets” relatively early in their careers ( much lower costs ), and educate them about the company’s technologies, so they can lead R&D in the future.”

    I’d like to comment but I’m struggling a bit understand what you’re suggesting in enough detail to make a judgement on it.

    The particular phrase I’m having trouble with is that “educate them about the company’s technologies” implies the technologies you refer to are present at the time the would-be staff are students – at least from my reading.

    What sort of time frame are you thinking of for cadetships? Do you mean in the last couple of years of their Ph.D. to be employed straight afterwards or something earlier in their study?

    I think software business isn’t an appropriate example here and should be set aside, as it’s not really research skills that are being used there, but a practical skill set in coding. (With the inevitable exceptions were specific algorithms skills, etc., are needed.) It seems to me that cadetships work naturally for practical skills based talent.

  16. Elf Eldridge

    Just going to point out here that organisations like Chiasma and Summer of Tech are actively pushing internships with local companies that wouldn’t otherwise invest in R&D. We have found that many local companies are open to participating in R&D but the expectations and costs need to be clear from the get go. There’s plenty of funding available from a variety of sources to minimise the financial burden to the company for this, but we have found that to make them happen you just have to put in a little face time with the companies. Many have never done R&D, and don’t know what to expect or even know how to fully-articulate the problem they have. What we have been doing for the last 6 months is talking to these companies and trying to get scientists and students in the door to ‘sell’ R&D to them. Our first internships are just going live now and we will report on what we find (unlike some large funding bodies who shall remain nameless!).
    If you believe this could help – chat to the people that are actively working on solutions. They aren’t perfect, granted, but it’s better than sitting by and doing nothing! And we can always use mentors and comments from scientists/professionals to help us refine what we do.

  17. Michael Edmonds

    Bruce, I like the idea of cadet ships, how do you think companies could be encouraged todo this?
    Also, do you think a return to a modified DSIR organisation would be a good idea. It certainly sounds like it had much greater foresight and planning than the current system.

  18. Michael Edmonds

    Reflecting on Bruce’s comments I think it is less a sense of entitlement from graduates and more a concern that they can see ways their research can help NZ/the larger scientific community but cannot get the funding to do it.
    Perhaps more important than leadership training would be training on how to communicate their work, how to apply for funding and how to form collaborations.

    Bruce’s points about aligning skills with market requirements, but who knows what those market requirements are? As well as Shaun’s point about the difficulty in knowing what those skills will be ahead of time, aren’t most employers in NZ largely the universities and CRI’s? It doesn’t seem to me there are a huge number of organizations outside of these who take on PhD graduates (although I could be biased here, as my specialization is in synthetic organic chemistry)

  19. Bruce Hamilton


    My position is well known. For most NZ companies, Research ( and often Development ) are distress purchases ( like petrol ), consequently they aren’t even interested until the fuel gauge is near zero and they haven’t reached their destination. They don’t plan routes based on service station locations, consequently I doubt most would even wonder if the appropriate skills are available.

    That’s why I propose that companies should be encouraged to capture “cadets” relatively early in their careers ( much lower costs ), and educate them about the company’s technologies, so they can lead R&D in the future.

    The whole concept of DSIR was that it was a body that contained skills to cover research areas not covered by industries/professional consultants. If govt organisations or companies had a technical problem, the DSIR was first port of call on the assumption somebody could help, or at least point them to somebody who could.

    If it was longer term, the DSIR head office would fund divisions to accumulate the skill set, eg as in Supercritical Processing, Materials Failure, etc. The problem was that some skills were seldom needed in the bidding round timeframes, eg building seismic isolation, and fell by the wayside because of lack of industry partners and misalignment with the funders’ goals.

    The MSI/Morst/FoRST model doesn’t focus on skill accumulation, but on proposal outcomes and alignment with the funders’ perception of future need within a budgetted timeline. That means that current market needs aren’t an important part of proposals, and most funding does not allow for skill accumulation, as they are based on existing skills, hence the use of contract overseas-sourced post-docs in some programmes.

    It’s probably no surprise that much of NZ’s current innovation is in activities – such as software, where skill accumulation is low capital, SME sized, and rapid.

  20. Shaun Hendy

    Kemo sabe – as Vote Education does not fund research on a full cost recovery basis, Universities and CRIs do in fact have very different cost calculations to make. As Chris Bumby argues, this makes the situation far more complicated than you suggest.

    Bruce – I think you are on the right track but again its complicated by the fact that current market needs depend on the number of PhDs available! This is a well known problem in economics. Businesses don’t invest in R&D unless there are people with the right skills available. It is therefore very difficult to use current market information to decide what type of PhD to study.

  21. Grant Jacobs


    I take it that your comment is a general point, i.e. not addressed to me. If it is intended for me: your remarks about overheads are fine, but are about an earlier stage and setting than what I was referring to. I agree overheads can be substantial; the same is true in (molecular) biological science (reagents, equipment, compliance, etc.). Having said that, you can argue if the amount is too high or not! (Not something I want to get into, even if part of me would love to see how it all breaks down.) For what it’s worth—and somewhat related to my last point—I thought to not mention overheads as it seems a distraction away from the core issues of the topic.

  22. Bruce Hamilton

    This could sound offensive, but it’s not intended to be personal.
    I detect a sense of career entitlement and annoyance that infrastructural components, administration etc., are funded from approved research programmes. For many physical scientists, the cost of laboratories, equipment, and regulatory compliance are very significant.

    Employers/funders are paying for an agreed deliverable, and perhaps they need to be involved in future course planning to ensure positions will be available when graduates finally complete training and want to move into the market..

    To me, extensive training for leadership can lead to unrealistic expectations about career paths in large organisations. Most organisations have proactive programmes to identify leadership potential in employees, but they usually wait a few years before admitting employees to their programmes.

    Perhaps the problem is not the number of PhDs, but that their skills aren’t aligned with current market requirements?.

  23. Grant Jacobs

    I’m limited to quick thoughts as I’m busy of late… (Sigh.)

    I would like to have gone to the meeting having written on this general topic in the past.*

    One of points I’ve (tried to!) stress in the past is more awareness of the wider range of careers using Ph.D.s during training at universities, as there students can easily be left only ‘seeing’ what is around them – the university and its staff.

    A related element is that the idea of using a Ph.D. outside of a university or research setting as somehow ‘failing’ has to go.

    These won’t on their own solve ‘the problem’, but they might at least have people thinking sooner about their training and career decisions rather than (figuratively) wandering along hoping it’ll all go well.

    Overheads… As others have pointed out, these are set by the institution. Given that, it’s not that surprising the teaching/research staff aren’t familiar with the finer details of them. Two things: (1) staff (in my experience) tend to think in terms of salaries; (2) the institutions take the overheads off the grants before passing the remainder on to the researcher. Without going on about at this at length, I sometimes wonder if the taxpayer (who ultimately funds all this) would be better served if the overheads were more flexibly allocated to encourage competition. (E.g. as an independent consultant, I can comfortably compete against the university/CRI overheads.)

    I’m not sure if regulating/controlling the market of Ph.D.s is a good idea or not – markets tend to respond naturally. I do think better awareness is important. But I’ve said that before! (Looks at feet. Yes, I’m on a soapbox. Hmm. Time for me to stop, then.)

    * More reading (and unashamed promotion of my blog – sorry Peter!) for those with too much time!

  24. Michael Edmonds

    The other thing that is probably worth considering, is that science in NZ is not isolated from the rest of the world. Those with PhD’s from overseas take up both postdoc and academic positions in NZ. If we were to reduce the number of PhD students in NZ, then a glut of overseas PhD’s may result in little change.

  25. Michael Edmonds

    Of course the question therefore becomes what is the right number of PhD’s to train?
    And if there are less PhD positions, what are those who don’t make the cut, going to do instead? I probably would have fitted into this category as personal issue in my honours year lead to a less than stellar performance. Yet, I can’t imagine not having done a PhD.
    Rock and a hard place – I agree completely with Elf.

  26. maree

    Couldn’t agree more Elf. The laws of supply and demand work here as well! Too many PhDs equals not enough positions to go around – so some.or end up as office clerks, others head overseas. With research funding not inflation adjusted its very difficult to justify more expenditure after taking out actual research costs, lab space, and in the case of CRIs, managers, legal, and admin costs from the same pool. Then think about what Jon Hickford stated “scientists are demonstrably poorly paid and suffer poor job security as well” and wonder why anyone gets into it in the first place!

  27. Elf Eldridge

    This thought occured to me during the conference – it seems that assuming that a) scientist’s complaints about overhead rates and lack of funding will be typically ignored by those with the power to change them and b) research fund will not increase dramatically in the short term – that an obvious course of action by scientists would be to cut the number of PhD students.
    Which quite clearly seems to answer the question posed by the conference: emerging scientists do have a future in NZ, if there are less of them. Which puts me in somewhat of an awkward position – as i would be in the group of students whose funding would be cut. Yet i have a feeling that the completion incentives for student would mean that this wouldnt make the universities particularly happy about this either! Talk about a rock and a hard place.

  28. Chris Bumby

    “I think you may be wrong on this point. The PBRF may be assessed at six year intervals but the money is paid out to the universities on an annual basis- about $250M pa in total.”

    The disbursement is an annual payment. But the allocation and amount of the funds received is based on performance during the period 2000-2006. (The last PBRF assessment was in 2006 – a new assessment is very imminent and occupying many of our colleagues time at the moment).
    Note that doctoral completion rates are a fairly small percentage of the overall PBRF assessment criteria – which primarily focus on staff publication rates. (This is yet another reason for universities to squeeze out junior post-docs with short publication records).

  29. kemo sabe

    Thanks Chris
    Obviously university politics is a major factor in all this.

    “(Incidentally, PBRF income also occurs at the faculty level or higher, and again lags expenditure by up to 6 years!).”

    I think you may be wrong on this point. The PBRF may be assessed at six year intervals but the money is paid out to the universities on an annual basis- about $250M pa in total.

  30. Chris Bumby

    Hi Kemo –

    “I think you are saying that a PhD student engaged on an externally-funded research contract would have their stipend and fees paid out of contract income.”

    Yes, full-cost funding means that postgraduate students are funded by the research contract, just as is the case for post-docs, permanent staff time, consumables and all other attributable research expenses.

    “But what is the net cost to a university of a PhD student? Don’t universities get TEC funding for each student, plus PBRF funding for research degree completions?”

    Ah, good question. Yes, the TEC does pay a “doctoral completion” fee to the university AFTER the student has completed. I am not sure of the exact level of this but I believe it is substantial ( >$100k per student? – I’m happy to be corrected on this…..)

    However there are a number of important things to note here:

    1) As the TEC funding is only paid after completion of the PhD, this revenue lags expenditure by 3-4 years. Hence the incurred costs of a postgraduate student have to be paid from somewhere else at the time they are incurred.

    2) The TEC money is paid directly to the university central funds NOT to the research grant budget. Hence the research contract holder (ie the lead scientist) never sees this money and it does not feature in his/her budget allocation decisions. (Caveat – nonetheless there is often departmental pressure to maintain postgraduate student numbers, and this may influence budget allocation.)

    It is important to understand that senior management within many universities generally does not control external research income and expenditure. The lead scientist controls that fund, and can spend it however they like (within the terms of the contract, and the policy constraints of the university – which includes overheads). Internal university funds (ie TEC and PBRF funding) are however controlled by the vice-chancellor and the faculty/school. They do not usually flow directly back to the lead scientist/research project.

    Understanding the decision-making structures within our science system is really important when considering how financial incentives are structured. I have come to the conclusion that a key issue in the whole “post-doc” debate is that many commentators and officials do not truly understand why the current budget-allocation behaviour is incentivised, nor the personal motivations of university scientists.

    (Incidentally, PBRF income also occurs at the faculty level or higher, and again lags expenditure by up to 6 years!).

  31. Peter Griffin

    Some interesting info just to hand on the overheads issue and how costs on research projects funded from the major NZ research bodies are sliced up… the Royal Society looked at this in 2007… i doubt things have changed much…

    here’s the guts of it…

    “We noted general consistency in the numbers between FRST, HRC and Marsden contracts, although there was some variation, as expected, reflecting the nature of research and changes over time.

    “We have also identified the proportion the government spends on MoRST, FRST, HRC and the Royal Society to manage the government’s investment and provide policy advice. Those costs (at just over 5% of investments) compare well with overseas benchmarks. These four organisations are continuing to work on making sure these figures remain low.

    “We are also looking for continual improvement in the amount of time that researchers spend in the contracting process. In doing this we always seek the appropriate balance between accountability for taxpayer’s investment and allowing researchers to get on with their work.

    35% Personnel costs Covers salaries, ACC and fringe benefits, and superannuation.

    “23% Project specific costs Covers general operating expenses, e.g. small capital purchases and expendibles, domestic and international travel, costs related to extraordinary items or expenditure, and costs associated with ethical or regulatory requirements.

    “37% Research infrastructure Building depreciation or rental, equipment depreciation or rental on standard scientific equipment, overhead costs such as support services, and financial and accounting systems.

    “5% Central government costs Policy advice (MoRST), and research contract management (FRST, RSNZ, HRC).”

  32. Michael Edmonds


    I’m not sure I would agree with the statement that we are “devaluing our PhD standards by churning out too many”. But we are potentially oversaturating the marketplace.

    Another aspect to look at is counselling students more thoroughly before they embark on a PhD. I’ve met several people who complete have completed their PhD before they have realised that they don’t really want to do anything with it.

  33. kemo sabe

    Chris- I think you are saying that a PhD student engaged on an externally-funded research contract would have their stipend and fees paid out of contract income. But what is the net cost to a university of a PhD student? Don’t universities get TEC funding for each student, plus PBRF funding for research degree completions?

  34. kemo sabe

    Shaun- it is unlikely that the three organisations you mention would take very different approaches to establish their costs. What they are quite likely to do is price their work differently, which is another matter entirely.
    It is unfortunate that some research organisations will discount their prices to obtain a contract by fiddling about with overhead rates, or having different rates for different classes of researcher. Even worse, you might find arbitrary variations in discounting practice within the same organisation.
    This has been encouraged by some clients (eg ACC) who say ‘we don’t pay overheads on research contracts’. What they are actually saying is ‘we expect you to discount your full-cost research price by (say) 40% if you want a contract from us’.
    If you agree a contract on these terms you are effectively cross-subsidising the work from somewhere else. If the parties are both within the ambit of the Crown it is probably breaching the Public Finance Act.
    This is a complex subject and my main point is that active researchers need to have a good understanding of it as part of their skill-set.

  35. Peter Griffin

    Funnily enough Michael, the issue of producing too many PhDs also came up at the conference, with Melanie Massaro making the point that we are devaluing our PhD standards by churning out too many. This is not only an issue in New Zealand, but worldwide.

  36. Peter Griffin

    Thanks Chris, valuable insights there… very interesting and illuminating to see some of the actual costs outlined.

  37. Michael Edmonds

    “Why hire an expensive postdoc when you can get two cheap and keen PhD students?”

    Which of course produces 2 (or as Chris points out 4 or 5) PhD students who will then most likely want to move on to do a postdoc. The question is, how can they do this if there is a preference for PhD students over postdocs?

    In my more cynical moments, I tihnk we should be cutting back on the number of PhD’s we produce in New Zealand, not increasing them.

    Lucky I’m not cynical most of the time 🙂

  38. Chris Bumby

    “Why hire an expensive postdoc when you can get two cheap and keen PhD students?”

    Peter, you are somewhat understating things here. The actual cost factor is 1 post-doc costs the same as 4-5 PhD students.
    Overhead rates vary slightly between the universities, but using your figures for Auckland of 121%, we find that the annual budget cost for a post-doc on a $60k salary is ~$135k (some of the other university rates are definitely higher than this …). By contrast, a PhD student costs ~$32k pa (~$25k stipend + 6-7k fees, and zero overhead). Hence the budget cost of one post doc is equivalent to more than 4 Phd students. This has been a key driver. A single post-doc is usually much more productive than 2 Post-grad students (who generally take about 18months to find their feet and learn enough to be “research productive”), but this equation changes when the post-doc is required to do the work of 4-5 students to be considered “value-for-money”.

    When combined with a tight funding constraints (typical Marsden funding is ~$300k pa), this simple state of affairs is why budget holders within the universities (ie the lead scientist) choose to take on PhD students as the most cost-effective route to getting the research done.

    As I tried to point out on Monday, whether the research is carried out by students or post-docs makes no difference to the overhead costs incurred in supporting a laboratory infrastructure and administration. Furthermore, the overheads are almost entirely fixed costs that do not vary with salary, so seeking to recover them via a discriminatory labour recovery rate is not even particularly logical.

    Infrastructure and capability are vital to the science system and must be paid for. Unless there is a sea-change in government attitude to infrastructure and capability funding, we must fund this from individual project overheads. But, I would much rather see overheads calculated (transparently) up-front and then subtracted from the overall project funding, so that further spending decisions within the budget are not subject to perverse incentives, and “overhead-minimisation” behaviour by the grant holder.

    It should be noted that the situation within the CRIs is rather different – primarily because most junior staff are employed in permanent positions rather than as post-docs, and that the CRIs have more limited access to “cheap post-graduate labour” as they cannot confer PhD degrees…..

  39. Siouxsie Wiles

    Hi Peter

    Thanks for covering this. I would have like to have been at the conference but am currently enjoying gumbo in New Orleans :). I was disappointed to see the proposed changes to the RDF scheme. Most surprising to me was the removal of the expectation that Fellows receive permanent employment after their fellowship. There must have been some lobbying from the institutions! All this signals to me is that even with a prestigious RDF under your belt, you could still be out on your ear when your fellowship runs out. Not encouraging at all.

  40. Bart

    Based on 25 years in the NZ science system (I am no longer emerging :)) it seems to me that the problems we see now are all related to a simple lack of funding that actually gets to the science at the bench.

    A huge part of the problem is the simple fact that governments over the last 15 years have effectively cut science funding. Without fixing that basic problem everything else we do is simply rearranging deck chairs.

    More money for emerging scientists mean less for established. More money for PhDs means less for post-docs. More money for business/science connections means less for science. All those ideas are fine if we just had more money in the system.

    But the problem is compounded by the fact that Universities and CRIs have become bloated with managers and administrators who all draw their salaries from the science funding pool. Many of those managers behave as if they are managers of thriving successful businesses rather than struggling government institutions.

    There is no question that we need more money for emerging scientists. But taking that money from within the system as it stands just shifts the problem to another weak point in an already weak system.

  41. Shaun Hendy

    Nice summary Peter.

    Kemo sabe: I am not at all surprised at the poor understanding of full cost-recovery funding in New Zealand. I work for three organisations (MacDiarmid, VUW and IRL) and all three operate quite different methods for calculating overheads. None are particularly transparent, and when it comes to overheads on post-docs I have seen all sorts of methods for calculating these.

    In fact, some of the biggest frustrations of my career have come when these methods have changed between submitting and commencing a grant – and never in my favour!

    Even our funding agencies operate different schemes – while Vote RS&T works largely on a cost recovery basis, Vote Education does not.

    No wonder researchers are confused.

  42. Bruce Hamilton

    The problem for much of NZ industry ( SMEs ) is that a “free” scientist isn’t.

    Aside from a few industries that use common processing equipment and protocols, most industries use highly specialised equipment, and rely on technical support from the supplier – often a mixture of Internet connectivity and specialist support. This is cost-effective and fixes much of the distress, as the support often includes access to high level research facilities overseas.

    The same strategy is today used for scientific instruments ( eg highly-trained specialist technicians can now cover Australasian clients ), and it seems to be both popular and economic.The disadvantage is that client employees don’t upskill to learn all the technical stuff about their process/equipment.

    Bringing in a scientist to progress R&D also means providing the resources to educate or support the scientist about the process/product etc. OK if the company has spare skilled staff, but how many will have…?

    IRL went out to NZ with “What’s your problem NZ?”, and I assume some of the MSI funding proposals from IRL will be as a result of submissions to that programme. It would be interesting to interview some of those companies to ascertain their expectations and resource commitment.

    The whole idea of paying for govt funded research support from the late 1980s was to ensure that company commitment would be more likely to drive projects to completion.

    Perhaps it hasn’t worked because many companies have to focus on the alligators at their feet today, and make “draining the swamp” a strategic objective for the next management team.

    It may be far better to help companies align with research providers and recruit and train individual graduates that will fit their corporate R&D needs several years hence.

    This was the old corporate cadet system ( employing people from school leaver to experienced PhDs ), when companies could select and mould future researchers via rotation through parts of the company to learn about existing processes and then move to R&D to produce/enhance the company.

    The researcher’s career depended on the company being successful.

  43. maree

    Yes, good point kemo sabe – the laws of supply and demand are working as they should. Which does’t help our PhDs of course… However, one of the most interesting ideas that I heard at the conference was from Richard Furneaux (IRL) who turned things on their head and suggested that we remove the barriers which prevent science being more involved in business e.g. stop asking business to pay for R&D – and to let scientists get involved with various industries and businesses to identify those that will benefit from scientific research to improve their productivity or products. (We’ll need more PhDs then!). We all heard yesterday, how valuable PhDs are considered in busines (Izon, Douglas, BusinessNZ),so just think of the changes that could be brought about by having PhD skills in a wide range of industries in NZ. *Sigh* if only this would happen….

  44. kemo sabe

    Well done for the very quick summary of yesterday’s conference.

    1. I was horrified at the lack of understanding of research project costing/pricing and the overheads “issue” shown by many people in the room. These matters are very important to researchers who have to prepare bids to funding agencies. They should invest some time in understanding the principles of cost accounting, and the various policies of the funders, here and overseas. To someone who is pursuing a PhD in science they will find it very easy, and not very timeconsuming.
    Perhaps NZAS could publish a simple guide in a future Science Review.
    2. The conference ducked the real issue which lies behind the predicament of post-docs: there are too many researcher mouths to feed and not enough money. If funds are directed more generously to early-career researchers, who is going to get less funding to compensate? As usual, this is a difficult rationing decision which can only be made on sensible principles. (Just saying ‘put more money in’ is not very helpful here.)
    3. It may well be that the incentives bearing on the universities (especially the PBRF) means they are churning out too many PhDs in relation to the overall size of our science system, and possibly too many PhDs in the wrong subject areas. If this is true, it is not surprising that huge pressure builds up at the post-PhD point.
    4. Some speakers suggested that the PhD should not be seen simply as a qualification leading to a research career. Fair enough, but I wonder if a bright person might not be better served by spending those three years doing something even more useful. I do worry that the universities are pushing high-performing students towards PhDs without proper career counselling.

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