Tertiary Education Minister Steve Maharey
A Knowledge Society of Our Own The Mission of Research

Speech to Lincoln University Staff Council Forum, 8th August 2000.

INTRODUCTION

It's good to be here today. This is my first visit to Lincoln University as Associate Minister of Education (Tertiary Education), and it is my first speaking engagement since the formal release of the Tertiary Education Advisory Commission's initial report, Shaping a Shared Vision, last Thursday. At the time of the release, I gave some general welcoming comments to the report as a whole. I would like to use this opportunity to focus on the concept of a 'knowledge society', how it can be made real for New Zealand, and the ways we are revisiting the role of research for a knowledge society.

THE KNOWLEDGE SOCIETY IN GENERAL

A more active engagement with tertiary education providers, including in the area of university research, is central to this Government's vision for tertiary education. Society wants to know what's going on in our universities. We want to make sure that these huge storehouses of knowledge and expertise are focussed on the same problems as the rest of us. They're just too important not to be.

But what is the source of this renewed societal interest? Why have universities suddenly been thrust, in some cases unwillingly, to the forefront of public concern?

The answer is simple. Times have changed. We are in the midst of the so-called Information Revolution, with its globalisation of the world economy by the use of new technology. This present Revolution has been likened to the Industrial Revolution's early stage when the steam engine was just being put on rails.

There is wide agreement that the early decades of the 21st century will see accelerating change as the Internet and a host of inventions, unknown at present, impact upon our culture, society, economy and lifestyle. These forces offer new and exciting ways of learning. Many of you will be involved in developing and shaping these changes. All of you will have to deal with the challenges and consequences they bring.

These changes will form the basis of what we call the knowledge society. I want to emphasise my use of the term 'knowledge society.' The more common term around the world has been 'knowledge economy' or 'knowledge-based economy'. That is beginning to change, and rightly so -- the term is too narrow. Our whole society is affected and the risks must be managed and the opportunities secured for the whole of society.

This will mean new pressures on and challenges presented to our university sector. We have to face up to the challenges of the new environment, such as:

 the internationalisation of education;
 the growing importance of knowledge to the economy; and
 changes in modes of delivery in response to new information technologies.

Tertiary education institutions will have to become more connected and involved in the society and economy. So much more will be expected of them and they will need to deliver on those expectations by working closely with a variety of constituencies.

Universities, in particular, will need to be recognised, and need to start seeing themselves, as in many ways the most central institutions within a knowledge society.

There has been a tendency in the past for universities especially to be a bit insular. That can’t continue. We need to move to a knowledge society and a lifelong learning society. Tertiary education institutions aren’t over there in the corner anymore, but right smack in the middle of everything.

Another aspect of the knowledge society that I want to emphasise is that it is not just about science and technology. The Commission's initial report is very clear that:

A broad definition of the knowledge society should be adopted in the development of policy for tertiary education. This includes a recognition of the potentially valuable contribution of all forms of knowledge.

Too many people see the knowledge society as being simply about more scientists and engineers. I am a sociologist by training and I know that the social sciences have an important role to play in providing solutions to important challenges that we will face in this new century. The same is true of other fields of knowledge.

By the same token, I am also very much aware that the social sciences have failed to build up a significant body of work in this country, in the way for instance physics or the agricultural sciences have. That is not to deny that there have been very impressive individual pieces of research, but this work has not built up a body of knowledge in the way research in other disciplines has. The result is less, rather than more, than the sum of its parts. The challenge for the social sciences is to turn that around, and the challenge for us as a Government – both a funder and an end-user of social research – is to create an environment in which that will happen.

I’ve discussed this with Pete Hodgson, the Minister of Research, Science & Technology, and he has asked me to take the lead in this area. Pete is a physical scientist, a veterinarian, by training and we agreed that I had the networks, both academically and as Minister of Social Services and Employment, for the task.

A NEW ZEALAND KNOWLEDGE SOCIETY IN PARTICULAR

An inclusive definition of the knowledge society is not incompatible with a strategic and selective approach to focussing our national research effort, and it is clear from their report that the Commission agrees with me on this.

That means we have to make some strategic choices and in doing so we need to heed the Commission's advice and not pre-judge what a knowledge society ‘should’ be.

Our new economy is fundamentally about the application of new technologies, new information, and new competencies to what it is that we know and do well, and have being doing well for some time.

That's not to say that there shouldn't be innovation or risk-taking outside of our traditional areas of comparative advantage – but we need to be wary of being carried away by the rhetoric of the new economy when what we require is a sense of the reality of what that means for this place at this time.

We are not going to be able to compete as a nation with the U.S. in information and communications technology, or even with Finland (which is to say, effectively, Nokia). That doesn’t mean we won’t have individual success stories, but we need to clearly define what will be at the centre of New Zealand's drive for prosperity.

I want to argue that this comes down to applying the best of the new to the best of the old: the geographical endowments that have always given us an edge. We need to apply our skills, innovation and technology to leverage off the defining features that set New Zealand apart. Here I am in agreement with Andrew West of the Institute of Geological and Nuclear Sciences, who has identified these as our low population density and our location.

In the past we have made the mistake of neglecting the first part of that equation -- skills, innovation and technology. We have been smart commodity producers but only to the extent of being price-competitive. We have failed to transform our export base from undifferentiated commodities to distinctive 'New Zealand brand' products.

However, there is now a real danger of us focussing on the first part of the equation (skills, innovation and technology) to the exclusion of the second (location and low population density). Internationally, everybody is preoccupied with information and communications technology, where the pace of change is staggering. With the mapping of the human genome completed, the potentials of biotechnology will be the next attention-grabber.

We have to seize the opportunities offered by these developments, but we need to apply them to our own areas of advantage. That means our location, the activities that can be carried out upon it, and the things that it can grow.

At the moment, the vast majority of this is 'below the radar' of the knowledge society. The Standard Industrial Classification System used by the OECD and other commentators when defining 'high-technology' products systematically excludes just about any organically based item. That might be an understandable simplification for the purposes of the large economies of the Northern Hemisphere, but it would be a dangerous practice for us to follow.

In many ways our success as a knowledge economy will be determined by our ability to move along the spectrum from 'low-technology' to 'high-technology' in exactly those areas that are excluded from the usual international definition.

As an example, when thinking about primary production, we should be looking at our wine industry as the model. Our wine industry harnesses the advantages of our soil and climate in alliance with the most modern technology and practitioners with specialised expertise and flair. The result is a range of differentiated products clearly distinguished as New Zealand made and often competing with the best in the world. People in other countries have reasons to purchase a New Zealand wine rather than one from somewhere else, and they have a choice of a range of New Zealand wines to suit their particular palate (though with an emphasis on the varieties we are best suited to produce).

As a consequence, our winemakers are price-makers rather than price-takers – other wines are not considered substitutes for ours so a bumper grape crop on the other side of the world does not push our prices down.

Our other organic products, from fish to livestock to forestry, lie at various points along this spectrum, as they are also now being differentiated and 'branded' to lesser or greater degrees. It is true that the wine industry internationally has always lent itself to this kind of production and marketing. What that means, though, is that the more that we identify particular niche consumer tastes in other areas and target them with our production, the more we will be a leader rather than a follower. This confers risks but also tremendous advantages.

The advantages of location and low population extend well beyond simply growing things. An example of this is our appeal as a tourist destination. We need to build upon the head start we have as a result of our natural heritage. That means developing New Zealand as a unique experience. This relies on up-to-date technology and a skilled workforce – which will need to extend beyond the 'tourism industry' as it is usually conceived. In fact we need to see tourism as an opportunity to expose as many people as possible to the best products New Zealand has to offer. That way they will gain a taste for them!

To take a very different example, our recent success in attracting international film and television productions has relied very much upon our ability to offer beautiful uninhabited backdrops, varied geography and a mild climate – once again, it is founded on location and low population. However, the achievement of Peter Jackson in staging The Lord of the Rings in this country dwarfs that of other international productions, not just in scale but because Jackson also incorporates cutting-edge New Zealand technology and expertise into the mix. The film will generate a huge amount of special effects work for Wellington-based Weta Limited, of which Jackson is a partner, and offers an opportunity for the company to consolidate its international reputation.

Finally, our location and low population are also the cornerstones of a very attractive lifestyle that we as New Zealanders enjoy. If we can support that with some exciting challenges and reasonable financial rewards then we stand a good chance of retaining our best and brightest in this country. We will never match the salaries that the United States, and increasingly Europe, can offer, but they cannot reproduce our lifestyle either. This therefore forms an important precondition for us to employ homegrown 'knowledge workers', and where necessary attract some from overseas, in areas which might otherwise have little to do with location and low population.

In each of these cases, and in a variety of other areas large and small, the challenge is to move our products and services along the spectrum to incorporate the maximum use of skills, innovation and technology. I believe New Zealand's success as a knowledge society will be based upon:
 Leveraging, in a variety of ways, off our unique location and low population density;
 Incorporating the advantages offered by the most up-to-date technology;
 Offering wide opportunities for the application of domestic skill and innovation to add value to niche-oriented products; and
 Having the potential to then sell the expertise and technology developed to the world.

REPOSITIONING RESEARCH

If this is to become a successful strategy, there will be need to be strong linkages between our economic opportunities and our research community. That will require a strong and responsive public research capability and we need to position our universities and our Crown Research Institutes, working in tandem, for this.

There are two strands to this. Firstly, Pete Hodgson is working hard as Minister of Research, Science and Technology to develop a science system that is strategic and innovative. Secondly, I, as Associate Minister of Education (Tertiary Education), am seeking to strengthen and focus the research capability of our tertiary education institutions, primarily our universities.

I want to talk briefly about Pete's strand before moving onto my own. He is working to give research a more strategic focus and to strengthen the connections with industry.

The strategic focus begins at the very top. The Prime Minister's Science and Innovation Advisory Council will draw together the elements that combine to create innovation in New Zealand and identify how these can be best applied to create a future that benefits all. The strategic focus has also been enhanced by splitting the Public Good Science Fund into five research output classes that address the Government's economic, social and environmental goals:
 Research for Industry;
 Mäori Knowledge and Development Research;
 Health Research;
 Social Research; and
 Environmental Research.

We have significantly increased the scale of the New Economy Research Fund to give researchers the opportunity to do some creative thinking about how tomorrow's wealth will be created differently from today's. NERF has grown from $11 million to $50.8 million, incorporating $8.5 million of new money as well as funds transferred from the PGSF.

We have also increased the Marsden Fund by $3 million in 2000/01 to support curiosity-driven non-strategic research, and an extra $3.7 million is being distributed to ten Government departments to boost support for policy related research projects of cross-departmental interest.

Greater research engagement with business will be fostered by a stronger climate for effective technology transfer. This Government is increasing expenditure on Technology New Zealand by $8.5 million in 2000/01, taking its budget to $24.7 million. This will assist New Zealand companies to enter new hi-tech, high-value markets, and it will also provide the basis for valuable linkages between researchers and business.

In order to better develop the research capacity of New Zealand's private sector, we are spending $11.8 million in 2000/01 on the new Grants for Private Sector Research and Development Scheme to assist firms with the costs of new research. The scheme will fund up to 33.3% of the R&D costs firms incur in carrying out R&D for a particular project. The aim is to increase the levels of research and development investment in small to medium sized New Zealand firms. The focus will therefore be on firms that would otherwise have difficultly undertaking research and development.

A NEW APPROACH TO UNIVERSITY RESEARCH

Many of these R, S & T initiatives will have a positive impact on the research environment in tertiary education institutions. But we are also working our way through a significant change in the way we focus our tertiary research effort. The Tertiary Education Advisory Commission is at the forefront of that work.

The Commission's initial report includes a principle of 'Maintaining research capability':

"Research should be adequately supported long-term to contribute to the cultural, social and economic development of New Zealand, pursue innovative and creative endeavours, build and maintain a strong research workforce, and make an effective contribution to the global knowledge community." (page 13)

I am committed to doing that. But we are not a big country and we are not a rich country. We are not going to lead the world in every field, and if we try to do so, we will fail. We need to act strategically to make the best use of the money that we have.

The Commission recognises that. While it is critical that all "areas of knowledge or learning are given the opportunity to develop” (p. 8), we cannot invest in every area to the same degree. Their report highlights the tension between on the one hand “nurturing centres or networks of excellence” while on the other hand still “maintaining a broad and evolving research capacity” (p. 20).

The challenge facing us is, as the Commission has identified, one of “enabling world-class research centres or networks with appropriate resources and sufficient critical mass” (p. 21). I am determined that we will meet that challenge.

However, in doing so, we need to preserve a strong research base underpinning degree offerings to ensure teaching excellence. And we want to avoid unnecessary disruption to existing degree programmes through departments losing funding because other institutions are seen as having the premiere research centre for a given discipline.

However, I also want to focus on the Commission's reference to "research centres or networks." The very practice of seeing departments as the primary site of consideration may need to change, and this offers a solution to the perceived trade-off between research concentration and a comprehensive research base underpinning teaching.

Increasingly the focus of evaluations of research performance is going not on academic departments but on the research team – a group of specialists working together in a sub-field of their discipline. These research teams are more likely than entire departments to perform as "centres of excellence". This is particularly the case in the sciences and engineering, but it also holds true in other disciplines.

And, excitingly, there is no need for the composition of a research team to be confined to a single department or even a single institution. If we can recognise this, and indeed use technological and other resources to facilitate its occurrence, then we will be well on the way to a situation where centres of excellence are compatible with a strong research presence across all degree-level departments.

Reviews of research funding in other countries like the United Kingdom and Australia are very aware of the need for funding arrangements to encourage, rather than discourage, research collaboration across institutions. Consideration is being given to assigning greater weight to research proposals that draw on the strengths of researchers across institutions.

We are currently considering how this can be done in New Zealand. The Commission's ultimate advice on these matters will be presented to me in September next year and will be reflected in the funding for tertiary education in 2003. However, the Commission has also agreed to work closely with the Ministry of Education to help develop a package of proposals for next year’s Budget that will prefigure those more extensive changes.

I have already indicated that I will be writing to ask providers to begin defining their organisation’s unique role and strengths. As part of the process of discussing that, our universities should also start looking at their areas of actual and potential research excellence. In what areas do you have the basis to be the nexus point for a network of excellence, which might take in other institutions and Crown Research Institutes? In what other fields might you be able to plug in to a network of excellence centred elsewhere?

If we can find answers to these sorts of questions, we will be making important progress.

CONCLUSION

In talking to you today I have emphasised the importance of making the transition to a 'knowledge society' if we are to be a prosperous nation in the 21st century.

To do that, we will need to be strategic.

We need to make some strategic choices in deciding what 'model' of knowledge society to pursue. I have argued that there is a real need for public debate on these issues. I have also suggested that, in my view, the key to our success will be our location and our low population density.

We need to be strategic in our science strategy. The creation of the Science and Innovation Advisory Council and the restructuring of the Public Good Science Fund are important moves in this direction.

And we need to be strategic in the way we develop our university research resource. The Tertiary Education Advisory Commission has identified the need to foster networks of excellence. The further development of funding streams for research within tertiary education will reflect the need to focus on what we do best.

I am excited that the change process that this Government has set in motion has a real ability to take university research in this country to the next level. I hope that the research community, both those in the universities and those beyond, will engage with us and help to ensure that these endeavours are carried out successfully.

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