Innovation investment cuts 'a blow'

TESS MCCLURE
Last updated 13:22 16/05/2014
Christchurch businesses
Kirk Hargreaves/Fairfax NZ

VITAL FUNDING: Christchurch businesses see support for the innovation precinct as a priority.

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The Budget holds a mixed bag for Christchurch small and medium-sized businesses.

Small-business owners interviewed by The Press identified the innovation precinct and research and development grants as top priorities for small to medium enterprises in the city.

Callaghan Innovation Funding was of particular importance to smaller tech and IT businesses breaking into global markets.

Overall, money for research and development growth grants rose 45 per cent to $96.6 million.

But money for Callaghan Innovation Strategic Investment dropped 38 per cent to $19.5m, in a blow to small businesses who depend on their assistance.

Callaghan Innovation distributes grants on behalf of MBIE. While funding for Callaghan Innovation Strategic Investment has changed, the grants available remain static - $140m per year for the next 4 years. 

Rupert Deans, founder of tech company One Fat Sheep, said his business had received funding from a Callaghan Innovation Grant in the past, and "those are so vital in terms of breaking into overseas markets".

Waters said that although there was a small increase in research and development tax credits, "it's later in the business cycle that you get to make use of tax credits, so it's something of a disappointment for start-ups."

The introduction of another $14m worth of repayable grants for start-ups was a boost for Kiwi entrepreneurs.

Waters was positive about the idea of grants for startups, but said it "doesn't sound like much".

A number of small Christchurch businesses had named funding for the innovation precinct as a priority.

"It's difficult to see how the innovation precinct is going to succeed in the inner city without significant government backing," Waters said.

It is possible some funding for the innovation precinct may be included in the $30m package going to anchor project development in the South Frame but Canterbury Earthquake Recovery Minister Gerry Brownlee said earlier in the month that the Government would not consider subsidising land to help smaller businesses into the precinct.

Deans said that since tech companies were booming in New Zealand, failure to invest in better IT education was "trading down your future".

"When you go to the US, you see kids of 14 or 15 with such well-developed skills you could bring them here and employ them.

"They just have such a head start."

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- The Press

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