Q+A’s Paul Holmes Interviews Chairman Of The CRI Taskforce, Neville Jordan

The interview has been transcribed below. Q+A is repeated on TVNZ 7 at 9.10pm on Sunday nights and 10.10am and 2.10pm on Mondays. The full length video interviews and panel discussions from this morning’s Q+A can also be seen on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

NEVILLE JORDAN interviewed by PAUL HOLMES

PAUL Mr Jordan, good morning. Let's establish your bona fides if I may without being patronising, but some people may not be familiar with your extraordinary record. You're a businessman with a fascination for science, the only Kiwi to list on the NASDAQ, how did you achieve that?

NEVILLE JORDAN – Chair, CRI Task Force
Shall we start off you asked a wee bit about me. I grew up in some very impoverished circumstances in Petone, and only in later years did I realise how impoverished things really were. So I suppose that led to a certain degree of independence and creativity, in order to survive and do well. Those characteristics then came to the fore when I had my own company, which as MAS Technology. We looked at further development, and at that time in the mid 1990s things were going pretty well in the US and particularly on that NASDAQ Stock Exchange. I spoke to people here about the possibility of doing a listing on that exchange, and was told that I was dreaming, you couldn’t do that. So I think that creativity that independent streak came to the fore, I literally dialled 0172, found the telephone number of the NASDAQ Stock Exchange in the US and gave them a call. I asked did they have a Vice President of International Affairs, it turned out they did. I spoke to the person involved and gave him the parameters of the company, he said that was interesting, so I said I would see him the following week, and I did, and then the rest is history.

PAUL And then you got on the NASDAQ, fantastic. But of course you are a very adventurous kind of a person Neville, you’ve motorcycled through the Andes, you’ve dived under Arctic or Antarctic ice, you’ve done 50,000 kilometres in yachting, so you're a risk taker we take it, you're an adventurer. Is New Zealand science entrepreneurial enough do you think?

NEVILLE No it's not, it is alive and well and there are extraordinary scientists and engineers, technologists in New Zealand, but apart from that we also need leadership within government to encourage those people, and then of course we need capital, both early stage capital and later stage capital to pull that science, the applied science and the engineering through to make the products or the services relevant to people, who will then pay money for those products and services, so there's a continuum that we need, just good science or technology by itself is not enough.

PAUL Where are we going to get the capital?

NEVILLE The capital primarily I suspect will come from offshore. We have some very very good support from the New Zealand government for really early stage capital, unfortunately New Zealand institutions are not at all interested in early stage companies, I suspect that will come from offshore.

PAUL Let's talk about innovation in New Zealand, because actually while we think we're very good No.8 wire people and tremendous world class innovators, perhaps we're not. A recent survey in February, IBM and Auckland University got together and they came up with an innovation index, a way of measuring New Zealand's innovation, and they showed that New Zealand's innovation rate has been flat for almost a decade. Does that surprise you, and how do we change it?

NEVILLE I'm not sure how that innovation was measured, we can change it by, as we've put in the report, collaboration between the great repositories of science and engineering that we have, and that lies within the Crown Research Institutes, but also we shouldn’t forget the universities and nor the Independent Research Associations. So it's the partnering, the collaboration I think which will help propel New Zealand forward.

PAUL I should say also to be fair, in agriculture, forestry and fishing, the innovation has been very good, they rated very good through the decade. Alright CRIs is what you’ve been looking at, that’s what you’ve reported to the government on. What is first of all the purpose of the Crown Research Institutes, just simply tell us what that is please.

NEVILLE Our report has suggested that the purpose should be to put one hundred dollars on to the New Zealand balance sheet, rather than just one dollar on to the balance sheet of a particular CRI, in other words as we develop the intellectual property the science, the engineering, the technology, which can help solve opportunities or address opportunities and help solve challenges that the country faces, then that intellectual property needs to be put out, licensed, or companies formed within New Zealand, rather than held just within a particular Crown Research Institute. So in other words it's getting it out into the market, that’s one of the keys here.

PAUL Well are they doing that, are they performing, because you talk about the CRIs having the capacity to be powerful engines of economic growth, are they doing that?

NEVILLE Yes that’s right. It has worked a little in the past, there are some very good examples of it, but it's not enough, and we're saying that there should be more, and there is commerce and industry around that can absorb that science and engineering, and also there are companies yet to be started.

PAUL Alright, now this is something that Guyon was talking about with Dr Mapp and it's the business of short term thinking over long term scientific development, and you say the trouble with CRIs at the moment I think in your report, the main trouble they’ve got is they don’t really know whether they exist to make a dollar or to increase the prosperity as you say by a hundred dollars, so can you explain that.

NEVILLE We're very clear, one that the one hundred dollars prosperity is needed. One of the other recommendations in the report is that government do take a look at what we've called the purpose of the CRIs. Surprisingly it's not very clearly spelled out, and of course over the last 20 years their purpose has changed as each individual CRI has developed it's own personality, then some have drifted away from a core purpose, and that’s not a bad thing. However we're saying let's redefine that and then within that let's take a look at the purpose of each individual CRI as well.

PAUL Yeah so what you're saying is there's too much short term work going on at the moment because the CRIs are expected to produce too much revenue so let's set some real and more money aside within the CRIs for some long term scientific development, which will increase the prosperity by a hundred dollars rather than one dollar.

NEVILLE That’s exactly right, but also we said that long term funding does not come without milestones, in other words we want the individual CRIs to certainly take advantage of that longer term funding, but also to take up the responsibility of performing to some milestones which are agreed to government, and also putting some of that revenue at risk if they don’t meet those agreed milestones.

PAUL Now one of the reasons that Simon Upton set the CRIs up as they are was to almost make them compete, so that we didn’t get a little bit lazy, and you are now urging – have we gone too far in this competing business, you're talking about more collaboration?

NEVILLE We have gone too far, good tension, good healthy tension is good for any industry, for any company, and set of organisations, such as CRIs, there's no question about that, however we're saying that that’s gone a bit too far, there still needs to be a tension of course, but let's go back and through defining the purpose of each CRI, looking at the gaps, looking at the overlaps, then I think we can get a better overall response from that science and technology group as a whole.

PAUL Does the government spend enough on research, science and technology. I mean we're well down the spending list on RS&T aren’t we, in the OECD tables?

NEVILLE My personal view is that we do not spend enough overall, but remember that’s government funding, as well as private funding, and it's that private sector funding which is dismal compared with other countries. So we need to increase the overall amount, not just that from government. If we do talk about the government portion, what we're saying is, let's get some fundamentals right, and then be in a very good position to go back and convince government that more funding is needed, but those fundamentals have to be got right first.

PAUL But you know when you go on the internet, I was on the internet yesterday Mr Jordon and I'm looking at a Science Park in Singapore, 8000 scientists, a couple of universities, purpose built laboratories, incubation clinics, you know for young industries and businesses and so forth, I mean – and there's one in Taiwan, they have them in Europe, have we missed the bus in terms of scientific development?

NEVILLE I'm not sure that we've missed the bus, it may be pulling away, and it's an interesting set of countries that you talk about, even more so in Saudi Arabia where I was about ten days ago, there are seven universities being built right now in Saudi Arabia, a country that we'd not normally associate with science, engineering, technology. So there are countries pulling away with their massive financial resources. We have to compete with brainpower, with innovation, with creativity.

PAUL Are you hopeful the government are going to act on what you propose, because I've been doing interviews for years Mr Jordan about how we need to get innovation in science and research and development in New Zealand going, nothing seems to happen.

NEVILLE Paul if you look at the various responses that have come in as a result of the publishing of the report, they all look pretty good. So all of us are very hopeful that government will in fact pick up on the recommendations and implement them, and if there's one thing that we can do is implement them with haste because quite often it's the speed of decision making, speed of policy making, speed of implementation which does enable us to complete with other countries.

PAUL And finally Mr Jordan, I thank you very much for being with us but I'd better hit you with the compulsory – it's become the compulsory Q+A question about whether from your point of view as a very successful businessman, a venture capitalist, do you think that New Zealand can catch Australia by 2025?

NEVILLE To me the question is a bit of a nonsense. I would rather think about catching other countries and the characteristics of those countries. How about the industriousness of Vietnam, how about the overall economic activity of Australia, how about the happiness index of Bhutan, so for me it's rather, let's take a look at some benchmarks across all countries rather than slavishly just try and catch one country.

PAUL Neville Jordan, I thank you very much indeed and I'm sure Petone is very proud of you.

NEVILLE Thank you Paul.

PAUL All the best and congratulations on your success.

ENDS

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