Submission – Professor John Raine, Pro Vice-Chancellor Innovation ...

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projects, it must be perceived as a politically neutral player in regard to funding to support R&D projects. If not, then other parties are going to see the ATI as have the whip hand in funding projects, e.g. "Work with us or miss out on funding". Many partnerships will be directly between universities and industry, or CRIs and industry. It is highly desirable that many other partnerships will be three‐way between universities (or polytechnics), an industry and the ATI. However, there should be no sense within the R&D organisation sector that the ATI is other than a capable, neutral partner. The proposed model seems to put this at risk and in my view may not help drive collaborative behaviour. A number of people have approached me as Chair of the Review last year expressing their concern about this aspect of the ATI. While I have not been involved in the architecture of the new organisation other than through reflective conversations with Peter Crabtree, Richard Bentley and Kevin Jenkins early in the process, I very much want to see the ATI succeed, and hope that its structure is not evolving in a way that may militate against achievement of objectives in the Power <strong>Innovation</strong> report. 4. Collaborative Behaviour: It is vital that this structural change in the New Zealand innovation eco‐system facilitates greater staff mobility between the rest of the R&D sector, the ATI, and industry. Ultimately the Board needs to keep in mind the aim to lift industry R&D investment to the OECD average or better and this should mean ATI (i) on its own behalf partnering with industry on matching funded projects (ii) likewise with other R&D organizations and industry partners. ATI needs to look collaborative and capable as a technical and business organisation. 5. Capability: Given the intended spread of activity for ATI, e.g. anything where high tech added value can be generated through industry intervention (therefore including more of food and fibre sector than covered in the Powering <strong>Innovation</strong> report), it will be vital that ATI has both broad internal capability and networked external capability. For example as part of its virtual capability it would have contracted access to specialist facilities and people in universities and CRIs, e.g. rapid prototyping at AUT, Advanced Materials Labs at the University of Auckland, Electronics Labs at the University of Canterbury, and numerous CRI facilities. In this ATI would need its own employees embedded at such places, in a similar manner to the operation of the Fraunhofer institutes in Germany. However, I think it is essential that ATI has a substantial critical mass of its own specialist engineers in various disciplines and that it also owns and runs specialist facilities which would come and extend on those from IRL. These would complement those it accesses in its virtual network. Therefore, overall I think the mooted number of staff of 400 must be seen as a starting minimum which could build as more engineers become available. As universities in particular cannot easily prioritize industry responsiveness to R&D problem solving, it is not possible to create the organisation we want to see without substantial in‐house engineering capability alongside that needed to deliver other ATI services. I acknowledge challenges 2
around supply of enough engineers, and even 400 as an overall staff could be a challenge at the beginning. ATI has a key role in breaking down the silo behaviours that exist in our system at present and in helping develop a culture that sees capability in NZ more as a network, where shared knowledge can enable all to be more effective and profitable, and where we build up strong specific industry networks that are mutual learning organisations and not simply lobby groups. We see that to some extent already with the IT clusters and maybe one or two others. In all of this, as noted previously, it is critical that ATI is designed so that Universities and CRIs see it as a desirable partner and facilitator. 6. The Funding Model: Clearly, providing a funding base for the ATI will be critical to give it momentum at the development stage. In late August I was in Copenhagen, where I visited the Danish Technological Institute (DTI) and other units in the Danish GTS system The GTS system has some attractive features. GTS institutes can access about � 10% of their annual revenue direct from government (but competing with each other) on the "performance" contracts, � 30% from government on projects partnered with a public body and private industry, and � about 60% in direct industry client contracts. There is a significant question for the ATI establishment board around what revenue model and partnered project models will enable them to manage the transitional start‐up phase and build momentum on industry partnered contracts while not being seen as a quasi Ministry funding agency. I think the model that would get best buy‐in from the other R&D organizations would be to place a relative minimum of core funding in the organisation but working with a big pool of industry‐linked project funding held at MBIE which ATI can access through partnered projects with other R&D institutions plus industry partners. What amounts to an underwriting of risk might be necessary during the transition. 7. Inventor support Quite apart from the successful business incubator system in Denmark, one attractive unit of the DTI was the inventor consultancy support service, available only to private inventors, assistance with licensing and assessing 1000 inventions per annum with final filtering down to typically seven licenses signed up to business/ industry licensees per annum. Revenues from this activity grown by the licensee businesses have been massive. It is a low cost scheme that we could launch in NZ within the ATI, with support from other parties like university consultancy and commercialization offices but a core expert team as part of ATI. 3
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Submission – Professor John Raine, Pro Vice-Chancellor Innovation ...

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