6 December 2007

Research grants yield big returns

Labour-led government support for businesses doing innovative research and development is paying dividends, says Research, Science and Technology Minister Pete Hodgson.

Many companies that received grants under the Technology for Business Growth (TBG) scheme run by the Foundation for Research, Science and Technology over the past five years have reported significant increases in turnover, new products and exports, Pete Hodgson said.

“The results of a study of TBG contracts are encouraging because they show that the government’s contribution to technology development and innovation through R&D is paying off.

“The companies surveyed in this study signed their TBG contracts four to five years ago. What the study does is look at the outcomes after the contracts ended. It shows that much of the funding was good for the companies and good for New Zealand.”

The TBG Performance Report, prepared by the Foundation, surveyed 51 firms that had completed TBG contracts worth $50,000 or more and reached the milestone of 18 months post-contract during 2006/07. The main results included:

- Average turnover of the firms increased by 29 per cent since the beginning of their TBG contracts, with one in three reporting a more than 200 per cent increase.
- Total export revenues of the firms were $424 million, 35 per cent of turnover, with one in seven reporting an increase of more than 200 per cent.
- Average R&D expenditure of the firms increased by 37 per cent.

- 127 new or improved products, processes or services resulted from 45 of the TBG projects.
- Current annual revenue from the technology developed was estimated at $4.4 million for each $1 million of TBG grants, with over 70 per cent of the revenue from exports.

The report is available at: http://www.frst.govt.nz/Publications/corporate/downloads/index/TBG_Performance_report.pdf

TBG Success Stories

Endace

Constant innovation and a global mindset have propelled New Zealand company Endace into its position as a world leader in very high speed network monitoring solutions. The company’s technology provides the means to ensure networks are free from intrusion, viruses, spam and denial-of-service attacks by capturing and analysing every single packet of data moving round the network .

The Foundation for Research, Science and Technology has invested around $1.8 million in Endace since 2002, through its Technology for Business Growth and other schemes. Endace Chairman Selwyn Pellett says the Foundation investment has made a significant difference to the company both in terms of actual dollars and technical stretch.

Surveylab
Wellington-based Surveylab is selling its data capture technology around the world, thanks to several years of support from the Foundation for Research, Science and Technology. Surveylab has a $760,000 Technology for Business Growth contract to develop its unique IKE (I Know Everything) point-and-shoot technology. IKE is an innovative, handheld surveying tool that wraps GPS (global positioning system), compass, inclinometer, laser distance meter and digital camera facilities into a geographic information system database. The Foundation has been working with Surveylab since its startup in 2003, providing small parcels of investment totalling $170,000 as the company achieved higher levels of success and greater technological capability. “It counts that the New Zealand government is backing its own technology companies,” says Surveylab CEO Leon Toorenburg.

Fresh Appeal

Months of hard work in the United States have paid off for Auckland company Fresh Appeal Ltd, with a US$700,000 deal signed for its innovative technology that keeps sliced apples and other produce fresh for extended periods. Developed with the support of scientists at HortResearch, the technology uses a unique, preservative-free process to wash sliced produce and, at the same time, kill any potential contaminants using ultraviolet light.

The produce stays fresh and crisp, with no browning, for up to 14 days. The research and development underpinning Fresh Appeal’s technology received investment of NZ$170,000 from the Foundation for Research, Science and Technology, through its Technology for Business Growth scheme. “This is a significant market breakthrough for us,” says Fresh Appeal’s Chief Executive, Flemming H. Rasmussen.

“The deal gives us the foothold we need to roll-out our technology to a range of other qualified prospects across the US and Canada.”

Optima

Auckland enterprise software firm Optima Corporation is signing international deals worth millions of dollars for its software systems that among other things give real-time information to improve the response times of ambulances being dispatched to emergencies. The company’s Siren software systems have been developed with the help of around $500,000 in grants from the Foundation for Research, Science and Technology since 2002.

Optima Chairman David Clarke says: “The Foundation support has contributed to Optima’s rapid growth, its ability to attract private investment and the development of new business opportunities, particularly with UK customers.”

ENDS

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