The scientific community is divided over Budget 2012's innovation flagship - the formation of an Advanced Technology Institute.

Science and Innovation Minister Steven Joyce said yesterday $90 million in operational funding and $76.1m in setup costs were being allocated to the new entity.

''The creation of the ATI will better link business and science, and help create new high-tech products and services,'' Joyce said.

Hans van der Voorn, executive chairman of Izon, called the new institute a ''bad idea'' and said it made more sense to establish it within the University of Auckland than start from scratch.

''A university-based research institute would have a more dynamic culture, cost less, and is a model that at least has evidence of success,'' he said.

Professor Shaun Hendy, President of the New Zealand Association of Scientists, said the ATI was ''welcome'' and would ''build stronger links between science and industry''.

Hendy said while the Government's commitment to the science sector was welcome - with $160m in new operation funding flagged in addition to the ATI - it still fell short of what was needed.

''The total increase in science spending in Vote Science and Innovation is only about 3 per cent after inflation. This still falls far short of the level of investment in science and technology made by other small countries like Singapore and Denmark,'' he said.

Peter Lee, chief executive of Auckland University's commercialisation arm Uniservices, said the ATI had been well flagged.

''We had all been expecting some investment to facilitate the engagement of research and business.''

However there was not much detail yet about how it would work, and care had to be taken not to create a competing entity to organisations like Uniservices.

The amount allocated was ''not a lot'', but was enough to get a footprint.

''To make it work we're really going to have to use such an institute to leverage off resources already in place.''

- © Fairfax NZ News