Be braver urges innovation agency

23:02, Jul 24 2013

Kiwi businesses need to become more motivated to take risks and be ambitious without relying on government funding as a safety net, Callaghan Innovation chief executive Mary Quin says.

The head of the Government's innovation agency was speaking in Hamilton at a national economic development forum hosted by Economic Development Agencies New Zealand.

In response to questions about the Government's role in building the innovation industry, she said New Zealand needed to be more proactive in raising capital for product development.

More than 160 people from government agencies, business facilitation organisations, local government bodies and economic development agencies are attending the two-day conference.

Quin has spent her career in the private sector, working overseas with big corporations such as Xerox and Eastman Kodak.

More recently, she served as president of Alaskan firm Nana Management Services, doubling revenues to US$200 million over seven years. She took up her appointment with Callaghan Innovation at the beginning of May.


Quin said that since returning to New Zealand she had observed Kiwi businesses had more of an expectation that the Government should fund research and development, and product development, than businesses in overseas markets such as the United States had.

"Their expectation is that you go out and you raise the equity capital to fund your product development," she said.

"Here, there's a bit more expectation that there is a government grant to take care of that risk of product development, as opposed to the private sector raising funds through private equity firms, venture capital firms and angel investment."

Quin said the Government's responsibility was to create and enable social, legal and governmental infrastructure that made it possible for entrepreneurs to exploit, develop and launch new products into the global market.

"I think we've certainly got potential to invest more in being willing to take risks, and be more ambitious in taking risks in the private sector, and not expect government R and D grants are going to get us all the way to the marketplace," she said.

Callaghan Innovation is six months old, set up in February to replace Crown entity Industrial Research.

Earlier this month, the agency released a statement of intent, putting forward strategies for accelerating commercialisation of New Zealand innovation. It was criticised by some in the innovation industry for failing to recognise economic development agencies as key domestic partners in building up New Zealand's innovation ecosystem.

Quin offered a humble apology to conference attendees yesterday, calling the omission accidental and a "total screw-up".

"We just blew it and, if you forgive us for that, we'll make it . . . clear in future documents," she said.

Under Quin's direction, the agency has decided to end its use of contestable funding, saying it created too many barriers and had Callaghan compete against the kinds of organisations with which it wanted to partner.

"[They] are not comfortable sharing with us what they are doing, because, in a sense, that is their competitive advantage."

Callaghan Innovation would also shift its focus from fundamental research to near-to-market research, Quin said.