The fleeting visit last week by Sanna Marin, Finland’s prime minister, was worth it alone for the advice she gave our own prime minister.
“I think it is very important to invest in research, development and innovation,” she told Q&A host Jack Tame.
“We are now sharing a goal with opposition parties to increase our research and development investments to 4% [of gross domestic product] by 2030,” she said of Finland’s innovation goal, which will be enshrined in legislation.
The increase from the current level of 2.9% of GDP would see a $430 million increase in the government’s R&D contribution each year, with twice that amount added by private companies.
Some of Finland’s biggest industrial players have already pledged to increase their R&D spending in synchronisation with the public funding increase.
No Nokia moment – yet
Despite having a very similar population to New Zealand, Finland’s annual GDP outstripped ours to the tune of US$50.6 billion (NZ$79.9b) last year.
Finland is the country that produced Nokia, the mobile phone giant that, while no longer a leading consumer brand, spawned a high-tech ecosystem in Finland and remains one of the world’s largest makers of mobile networking equipment.
We haven’t had our Nokia moment, which may explain why our own R&D target pales in comparison. But we have large companies such as Fonterra and Fisher & Paykel that could leverage public research efforts to a greater degree and spend more on their own R&D.
The Te Ara Paerangi Future Pathways white paper released on Tuesday after a year of consultation has the bottom-line goal of lifting R&D spending to 2% of GDP by 2030, up from the current rate of around 1.4%, still well below the Organisation for Economic Co-operation and Development average of 2.5%.
We will continue to trail other small advanced economies in our spending on R&D, which will see us miss out on opportunities to grow export revenue and produce high-paying jobs in low-carbon industries.
Still, Te Ara Paerangi at least outlines a high-level plan for more focused and coherent R&D efforts.
The government proposes taking a three-phased approach to reform. Next year, it will tackle the significant issues holding back the science and innovation workforce, particularly early-career researchers, and begin embedding Te Tiriti o Waitangi in the system.
In 2024, it will agree on “high-level National Research Priorities”, effectively giving us an R&D roadmap to steer national efforts. We haven’t had anything like that before.
From 2024 on, phase 3 of the plan allows for any necessary reorganisation of public research organisations, governance arrangements and funding mechanisms.
That’s where the rubber will hit the road, introducing the biggest changes likely to shift the needle on R&D spending towards that 2% target.
The big problem holding us back on innovation is our fragmented, siloed and overly competitive system. Everyone recognises it. We’ve just been paralysed to do anything about it for the last decade due to a lack of leadership and political will.
“The research system needs to better connect with itself, business, and society,” the white paper says.
“The future will require greater flexibility, more cross-cutting and transdisciplinary research, much closer integration across organisations and research areas, and much deeper and more productive ‘vertical’ links with business, government, and other users of research,” it adds.
This graph comparing collaboration between scientists and businesses in several small advanced economies shows how far behind we lag.
Source: Te Ara Paerangi Future Pathways White Paper 2022
Structural change across the crown research Institutes and universities will likely be necessary to improve that collaboration and an additional $1b in government funding for science and innovation by 2030 will be needed to put the plan into effect.
It will be 2025-26 before any structural changes kick in.
We’ve left our run to revamp R&D very late. Most other countries have already set national research priorities addressing big challenges like climate change and the ageing population, targeted important emerging technologies to focus on, and bumped up R&D budgets.
Political agendas
Labour had the chance to get a headstart on this in 2017 when it did a mid-way review of the decade-long National Science Challenges.
They are the closest things we’ve had to research programmes of national significance and were funded to the tune of $681m.
But Labour rubber-stamped the review and opted to let the Challenges run their course rather than winding them down early. They will end in 2023-24 and are largely seen by the research community as a huge wasted opportunity.
“The process somehow managed to bury climate change and outright exclude infectious disease,” Professor Shaun Hendy, the chief science officer at Toha Science and a veteran of the research sector, said earlier this week.
“I think that shows the risks of a process that focuses on near-term political agendas and privileges the views of a select group of senior researchers.”
It is crucial to get high-level National Research Priorities right while allowing enough flexibility to shift direction as new priorities emerge. And as the Finns have, our long-term R&D goals need to have cross-party support.
Innovation is definitely on the radar for the National party as it looks to next year’s election. If current polling trends continue, a National-Act coalition could be implementing Te Ara Paerangi.
“There are mixed reports on how good the current system is,” National’s deputy leader and finance spokesperson Nicola Willis told me last week.
“We are going to have a comprehensive R&D and tech policy at the election because we are conscious that if we don’t get the settings right, we are actually keeping the lead on an industry that we really need to have growing.”
Originally published on BusinessDesk.co.nz.
Photo credit: Julius Jansson, Unsplash
PETER GRIFFIN 