Stop trying to Aucklandise our science and innovation


At the risk of displaying a Wellington-residential and Southland upbringing bias, the government’s keenness for an Aucklandisation of our science and innovation strikes me as being stupid.

In particular, the push to make (force even) the development of the former oil tank farm Wynyard Quarter as a place that can grow into a hotbed of science-led innovation is wrong.

Purely on an evidence-based front, there’s flaws in the argument that’s been put up for the Quarter.

Why would start-ups, one of the main elements that the Quarter’s meant to be trying to attract, be interested in locating themselves on one of the most expensive pieces of real estate in the country?

Start-ups start in garages and spare bedrooms, rundown warehouses and close to the sources of supply (of raw materials, brains, good distribution) that fit at the particular time of their beginning.

Start-ups don’t kick off in elaborate, over-designed (potential white elephants), and surely government’s not suggesting a subsidised rental scheme!

Even if Industrial Research (as it even so slowly morphs into an Advanced Technology Institute) was ‘encouraged’ to set up in the WQ, those wanting to tap into its knowledge wouldn’t have to be co-located to access the brains. You don’t have to be onsite to have a meeting.

The other worry with the government’s Aucklandisation push for science and innovation is that it is looking through the wrong end of the telescope.

Sure, some high-level manufacturing takes place there – but attempting to concentrate R&D resources in the Queen City ignores the facts of the matter.

In a New Zealand environment that has a great scarcity of data, a recent working paper by Victoria University’s Management School crunches some numbers and draws some conclusions from IRL’s 2009 initiative, ‘What’s Your Problem New Zealand’.

The 19 page document can be found here. It’s a nicely written piece, low on theory-speak, and prepared to draw a few conclusions.

The management school recognised that analysing the [100] competition application forms

“represented a unique and potentially extremely useful insightful view of the corporate innovation landscape”.

One particular feature they noted was that WYPNZ isolated firms with active innovative intent – that is, thinking about innovation ‘right now’ in order to apply.

The competition was also open of all-comers, not just those identified by another agency or body as having potential to turn innovative intent into value creation, or firms in need of development.

All in all,

“we hope to have created a picture, in microcosm, of the landscape for corporate innovation inNew Zealand.”

Again, check out the report for yourself.

But, to cut to the chase, and the first couple of 13 propositions (which VUW suggests could be the basis for further possible research):

Proposition 1: No geographic region in New Zealand has more or less “innovative intent”, or indeed innovative capability, than any other.

Proposition 2: IRL’s primary location in Wellington appears to have no significant bearing on encouraging or discouraging firms from any particular region to relate to it.

………. so, to draw a long bow.

Don’t go overly pushing Auckland as an engineered hotbed of science and innovation – it’s an incorrect property play in the first instance, and unsubstantiated policy proposal in the second.

And for goodness sake government – let IRL get on with developing its ATI-inspired campus at Gracefield.

In the continued absence of a sense of science and innovation direction (which will only be exacerbated with the MSI’s absorption into the super-ministry), the ongoing mucking around with what was IRL’s idea in the first place is bad for the country.

In other words, tell IRL what you want them to achieve, and let them get on with doing that by allocating its smart people resources in the way that best fits. Kicking off with a rebuild (of a modular design that can be replicated inChristchurchandAuckland) in Wellington is the sensible option.

If the argument is that New Zealand needs to act as a city of four million people, IRL’s current head office location is fine as demonstrated by the evidence.

Or to put it another way, let’s just get on and do stuff, without the Auckland bias.

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About sticknz

sticK is by Peter Kerr, a writer for hire. I have a broad science and technology background and interest, with an original degree in agricultural science. My writing speciality is making the complex understandable. I am available for outside consultancy work, and for general discussions of converting a good idea into something positive
This entry was posted in Development, Early stage science, Entrepreneur, high tech, Innovation, SciBlogs, Science policy, start-up, technology and tagged , . Bookmark the permalink.

21 Responses to Stop trying to Aucklandise our science and innovation

  1. Neal says:

    Here, here. There is more to NZ innovation than one would guess, based on the focus on Auckland.

  2. David Collie says:

    Totally agree. For years there has been a national bias (NZ Chamber of Commerce, Govt itself etc) that for NZ to be economically successful Auckland must continue to grow rapidly and everything has to be based there. To succeed NZ must have a internationally sized city. This is faulty thinking. NZ will always be just a drop in the international marketing bucket, other than maybe dairy we will always be niche marketers and small business owners. That along with innovation is where our strength is.NZ would be much stronger economically with more decentralisation. Wellington and Christchurch should also be major hubs and smaller centres, even Invercargill should be allowed/ encouraged to use their natural advantages, be it land prices, business costs, labour costs or whatever.
    Then quite apart from the economic factors there are strong social factors for decentralisation.
    It is socially undesirable to have a huge population in Auckland and many areas of NZ suffering from underpopulation. Housing and transport are only one aspect.

    • sticknz says:

      In today’s world, with the power of video conferencing/skyping too, does it really matter where you are. The Queen City push is a distraction we don’t need when we just need to be getting on with something, anything even.

      • sticknz says:

        You might also like to have a look at a recent Neville Jordan blog here about ‘epiphyte capitalism’ – essentially how things happen out in the regions, without any support from anyone as such (especially government)

    • Simon Arnold says:

      I authored the NZ Chamber 2003 policy series “Achieving faster growth for NZ” that introduced perhaps for the first time to the NZ economic debate the idea that the performance of Auckland economy was critical to our national success. I’d just say in respect of David’s comment we agreed that “for NZ to be economically successful Auckland must ..grow rapidly” but not that “everything has to be based there”.

      At the time Auckland suffered from poor infrastructural investment, and the need for NZ to have a regional AP center was being forgotten.

      On the substantive issue Peter raises (the location of technology support services) I think there is a lot of confusion about the government’s role here. Think of another service that small innovative businesses need like financial management – what would we be saying if the government was thinking of setting up a single national institute at a limited number of locations to meet that need in our economy?

      Why support for short-term technology development is any different, I know not. Strategic applied research is, but then location ceases to be an significant factor compared with achieving scale and international competitiveness.

      • sticknz says:

        Simon,

        Meanwhile, nothing happens as endless debate continues at the government level.

        Doing nothing might be a valid strategy if IRL was allowed to get on with becoming an Advanced Technology Institute

  3. Dave Guerin says:

    (a) Auckland Council (via ATEED and they’re hoping MSI) is planning to develop rent-subsidised space for companies – see http://www.nzherald.co.nz/oecd/news/article.cfm?o_id=500513&objectid=10795493
    (b) it seems to make good sense for me to have a strong IRL/ATI presence in Auckland and if the Wynyard Quarter does develop according to the Auckland Plan (which seems very unlikely), it seems like a good place for it.
    (c) The rent/capital cost is going to be a small amount of the overall cost of any Auckland presence, whether it’s in Wynyard or Wiri, so I’m not against making a statement and supporting Auckland Council’s plans (within reason).
    (d) I really don’t see what this has got to do with the Wellington plans. The Govt announced an in principle ATI investment in early November – is there any evidence that the business case is bogging down? and is that due to Akld issues?
    (e) your example of the national ideas competition isn’t that strong as all it says is that a specific project with a lot of free PR in media gathered national interest. It says nothing about IRL’s current strength of networks in Auckland.
    (f) It doesn’t seem to make sense to focus a industry-facing institute only in the least private sector focused main centre in NZ. While people can fly and use technology, geographical colocation matters. And Wellington is not a private sector hotbed.

    Thanks for making me think about this one – sorry for the length of reply

    • sticknz says:

      No, good stuff Dave. Alternative points of view are welcome. I’m more worried about the almost forcing of the issue, in the absence of any strategy – i.e the Wynyard Quarter IS the strategy. Give me a break.

      I did like Vic Uni’s observation re WYPNZ (and yes, as much about publicity as anything) that those entering showed “innovation intent”. That I think is powerful – and wouldn’t it be great to see it happening at higher government levels.

      Welcome your thoughts though.

      Peter

    • sticknz says:

      Another thought – if 35% of NZ manufacturing is in Auckland, it means 65% is elsewhere. Does that mean we should locate the head office of an ATI in the middle of the largest city, one that’s well known as having transport ‘issues’.

      • Dave Guerin says:

        Auckland is easier to get around to make meetings than flying to Wellington.

        And while 35-36% of manufacturing might be in Auckland, a lot of the rest could well be Fonterra. I’d be more interested in the location of HVMSS and I saw a 2010 study that showed that 54% of bioscience by value was in Auckland (link below). Now that’s not a perfect match, but I’d be willing bet there was a heavier concentration of HVMSS in Auckland than general manufacturing.
        http://auckland.nzbio.org.nz/portals/5/files/Industry%20Snapshot%20Auckland%20BioScience.pdf

      • sticknz says:

        Good point about Fonterra’s contribution to the rest of NZ’s manufacturing.

        You might be (though you’d probably point to it) of any study of HVMSS and its concentration(s) around NZ.

        With regard to the Wynyard Quarter, I’m not convinced that forcing or ‘encouraging’ organisations to locate in a particular area works. You may have seen examples overseas where it does?

      • Dave Guerin says:

        RE Wynyard, I’m not too fussed about the location. If its’ not too expensive, then I don’t see any harm in being there. If nothing else it’s about in the middle of Auckland. I can;t see it becoming a mecca of innovation, but it might have enough people there to create a good vibe for coffee meetings if nothing else (maybe better coffee than Gracefield too…). I don’t see it as a killer location, but nor is it terrible.

      • Simon Arnold says:

        Just quickly if you want to get a feel for the location of companies (and employees) in various sectors go to http://wdmzpub01.stats.govt.nz/wds/TableViewer/tableView.aspx?ReportName=Business%20Statistics/Employment%20size%20groups%20for%20geographic%20units-%28ANZSIC%2006%29 You can limit this to 2011 and only look at ANZSIC06 C24 to limit to high value manufacturing (say) (excludes food & dairy processing). I think you’ll see the national center of gravity (at least on an employment basis) is well south of Wynyard.

      • Dave Guerin says:

        Simon for employment that gives you 42% in Auckland, 21% in Chc 9% in Waikato and 6% in Wellington.

      • sticknz says:

        With regard to the WQ, an interesting Economist article (though I would say that of course) on how entrepreneurial clusters are easier to kill than create. It also quotes Rohit Shukla of the Larta Institute in California who says policymakers should stop obsessing about clusters (which are usually the product of accident, not planning) and embrace global networks instead.

        http://www.economist.com/node/21550239

      • Simon Arnold says:

        Couple of things. When I get a bit of time I’ll have a closer look at where the center of gravity of the ANZSIC06 C24 group is in NZ, just out of idle curiosity.

        Peter, on Liverpool and the clusters, I think it is reinforcing value chains that makes the most sense (as I said in the comment further down). I haven’t updated myself recently on what Colin Campbell-Hunt and Competitive Advantage New Zealand is currently up-to (timely reminder to have another look), but I did find the argument that because NZ firms internationalize quickly they don’t build the roots – and that means you don’t get them to be quite as sticky in NZ, and you miss opportunities to build local value chains, and to gain control of them from NZ (we tend to be controlled, because we don’t hold the critical bits).

        I also think that the start-up and the incubators are not the main game in the NZ economy, it is l it is leveraging the bigger companies. Everyone worries about spin-outs from CRIs and universities, For my money I’d be worrying about the spin-outs from the medium sized companies.

  4. Simon Arnold says:

    Peter

    Still need to think about what the ATI is designed to do. Form follows function. Location is about cutting down transaction costs with key stakeholders, and who these are depends upon what the job of work is. It looks as though there are unresolved issues as to what the ATIs function should be – some arguing for a technology consultancy type model doing short-term work, others that the real need is for medium-term strategic applied research aligned with NZ’s industry base, and that the private sector should be encouraged/helped to do the short-term stuff better.

    If the goal is technology consultancy then I think you’ll find there are places closer to industry down in S Auckland, unless the target is ICT. If the goal is doing the medium-term stuff better then one suspects close to UoA and AUT isn’t stupid – and perhaps close to some financial intermediaries that bank this kind of activity.

    Like you I’m skeptical of the rush to new themed property developments. In the end the developers want to let the land and that’s where the priority ends up. 3-4 years ago it was the UoA Tamaki Campus, in someways a better option in terms of international access and access to key industry.

    But first you need to work out what the government’s trying to do and why. I suspect it hasn’t exactly worked that out yet, or there is tension in the ranks. The worst possible choice of location is one that depends on the whim or aspirations of a local authourity – it exposes to policy risk, and has none of the underpinning commercial sustainability.

    • sticknz says:

      As you infer Simon, what ARE we trying to do.

      Unless there’s a hidden report or paper somewhere, I’m none the wiser, and neither I suspect, is the government.

      If that’s the case, perhaps they should just stand back, and let IRL/ATI decide, in conjunction with the different industry segments, what that should be. After all, IRL is the one who has a more intimate relationship with what industry wants.

      Or, is that too naive?

      • Simon Arnold says:

        The problem with just letting them “get on with it” is that the government owns IRL/ATI and that ownership reflects some public policy goals. This is where the debate sits.

        The easy thing to do if you are just “getting on with it” is to follow the money into the domain where the private sector already plays (shorter-term technology consultancy). It is a seductive area if you have been accused of not being close enough to industry.

        But what do we think if (for example) the consequence of that is that existing consulting manufacturing engineers start to go out of business? Would we judge the IRL/ATI a successful government intervention in terms of improving the level of innovation in NZ?

      • sticknz says:

        So, what’s the easy/best way to derive the areas IRL/ATI should concentrate on?

      • Simon Arnold says:

        Personally I’d say the government should be trying to do two things.

        (1) Improving the performance and capabilities of those firms/EDAs/polytechs that already do the short-term technology consultancy (and through them improving the quality of innovation at the firm level and the general innovation eco-system), and (2) greatly improving the quality of the medium-term investments into applied innovation in the sector and their execution.

        The first is reasonably easy, and there is a role for an ATI to work through the existing consultancies to improve their performance and to act as a back-stop for the difficult stuff (facilitating international linkages etc etc). In some ways an ATI could see its role as a bit of a wholesaler with the existing agencies doing the actual hands-on stuff. Note this is a service offering.

        On the second, the reason for having the Crown involved is because this is the stuff that otherwise gets under-invested in because of spillovers etc. We have limited resources but to be internationally competitive we need scale and critical mass and multi-year focus. We can’t do everything for everyone..

        The hard bit is deciding where to invest, and we haven’t done well. If you look at where our $10m to 100m turnover companies in NZ are (those with the infrastructure to go the distance with this kind investment) it bears little resemblance to where our HVMS RS&T investment is going.

        The trick is to look at the value chains these companies sit within (forget sectors) and using a strategic investment framework, talk to them about the capabilities they’ll need for the future (and are willing to match with product and market development plans that leverage off that). Forget companies that aren’t interested in thinking in these time scale (or don’t have the capability to follow through) and ideally find capabilities to invest in that feed multiple value chains, support multiple outcomes and hence get the support of multiple companies.

        We also need to avoid fads and work where NZ has genuine commercial competitive advantage in the HVMS.

        A critical point is that this activity is producing investment goods, unlike the short-term stuff that is a service. It is hard for one business (eg ATI) to do both (they require different business models), and in this case there is no real reason for the government to be involved significantly in short-term technology consultancy services delivery.

        IMHO

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