The Idealog Guide to R&D

The Idealog guide to R&D

the
Idealog

R&D
guide to

The writing is on the wall: we can’t sustain our Audi
Q7s and jetski tastes on a budget of selling foreigners
stuff they can grow themselves. If we don’t expand
our innovation economy, we may eventually not have
much of an economy left at all. The fix? Read on
AJ Park 10009

e Ministry of Science and Innovation (MSI) has a proud
history of investing in innovative New Zealand businesses
like Comvita to accelerate their success through research and
development (R&D). If you want to be a global success story,
MSI can support your business, whatever your size, using our
world-class R&D networks and funding programmes.

Your success 0800 MSI GOVT
will also be ours. info@msi.govt.nz
www.msi.govt.nz

guide to R&D
The Idealog

Contents
The Idealog
93 Guide to R&D 100
How to get the
New Zealand’s cash for
94 R&D R&D
scorecard

100 106
The R&D
Get the cash
for R&D ecosystem

How 116 117
112

to do
From
good
R&D ideas R&D
to IP conclusion

92 / IDEALOG.CO.NZ/BUSINESSPLAN


The Idealog
Guide to R&D
T
his an issue of national importance.
That’s no exaggeration. Because when
we talk about the ‘development’ in
research and development we are
talking about how developed we are
as a nation, and whether the way we
live has a hope of keeping up with the most developed
nations of the future.
Make no mistake about it, the 21st century is not short
of folks who can grow sheep and cows, dig holes or go
fishing. Huge nations like Brazil, India and China are A N DY K E N W O RT H Y I S A
powering up gigantic primary sectors that make ours look FREELANCE WRITER SPECIALISING
like a child’s playset. I N B U S I N E S S I N N O VAT I O N A N D
Scores of middleweight countries are flexing their newly G L O B A L S U S TA I N A B I L I T Y. T H I S
developed economic muscles hoping to go toe to toe with I S H I S T H I R D IDEALOG G U I D E .
us in any marketplace, any time, anywhere. We are a long A N DY K E N W O RT H Y.C O M
way from most of the world’s shoppers and the opposition
manufactures the vast majority of the goodies we spend
our dollars on, so you could say they already have us over
a barrel of shipping oil each way.
So the writing is on the wall: we just aren’t going to be
able to keep buying our Audi Q7s and jetskis for much
longer by selling foreigners stuff they can grow themselves,
or by selling each other flat whites, boutique nik-naks or
secondhand stuff on an eBay clone that only works here.
If we don’t expand our innovation economy, pretty soon
we won’t have much of an economy left at all.
Thankfully, we have a lot going for us. For example,
as we shall see, a closer look at our world-famous dairy
industry reveals it has survived and thrived not just
because of our fabled supplies of clean water and fresh
grass, but by pumping out a steady stream of fresh ideas.
Meanwhile, our national mania for tinkering in sheds is “LIKE ACTUALLY ALMOST ALL
already migrating into some of the most complex R&D GOVERNMENTS IN DEVELOPED
environments in the world. We now have an innovation
infrastructure in place that is forging ever greater links COUNTRIES IN THE WORLD, R&D
between universities, Crown Research Institutes, IS SEEN BY OURS AS THE KEY
government ministries and the best of the country’s
business brains. And we have a business-orientated DIFFERENTIATOR THAT DEVELOPED
government that has recently opened up some new COUNTRIES HAVE GOT ON THE
outlets for R&D funding.
Which leaves you, the bright spark who might just have
STILL DEVELOPING COUNTRIES.”
some answers, or at least some of the right questions, to M U R R AY B A I N, C H I E F E X E C U T I V E O F T H E M I N I S T RY
take Kiwi business to the next level. O F S C I E N C E A N D I N N O VAT I O N

IDEALOG.CO.NZ/BUSINESSPLAN / 93

guide to R&D
The Idealog

New Zealand’s
R&D scorecard
TO KNOW WHERE YOU’RE GOING, YOU “The issue is that we don’t have enough young people
hanging on to maths and physics when they move on
GOTTA KNOW WHERE YOU’RE AT from Year 10 at school. So the demand for engineers
way outstrips supply. For us to grow engineering as
much as we need to we would need more kids going

O
ne of the things the world loves about us is into engineering,” he says. “There is plenty of opportunity
our great sense of national pride. It has to promote the careers, but to grow the sector we need
provided us with the kind of positive outlook more kids choosing engineering.”
that has kept us smiling through tough Fonterra is one of the major companies cited by many
pioneering times. But R&D is serious business, so let’s as a firm that does R&D well. And Mark Malone, general
take a cold hard look at where we are at. manager, innovation, agrees that creating an R&D mojo
The Powering Innovation report, an independent across New Zealand is crucial.
report commissioned by the Ministry of Science and “The R&D and innovation that we do requires a
Innovation released in February, found that besides some knowledge-based society in which to operate,” he says.
stand-out players and some green shoots developing: “This is a symbiotic relationship where both Fonterra
“There is evidence that the New Zealand high value and New Zealand as a whole benefit from the knowledge
manufacturing and services sector is under-developed, base that is developed.”
and could contribute substantially more to the economy
than it currently does, particularly through growth in
high-productivity advanced technology industries.” The New Zealand high-value manufacturing
In other words (what I used to always get on my school
reports) ‘could try harder’. But they get more specific: and services sector is under-developed, and
“Notably, there is a relatively low level of investment
in research and development by New Zealand business: could contribute substantially more to the
0.54 percent of gross domestic product in 2010, compared
with the OECD average of approximately 1.5 percent.
economy than it currently does
“Similarly, there is a relatively low level of overall
expenditure on R&D as a percentage of GDP. 1.3 percent One of the key people whose desks the report landed
in 2010, compared with the OECD average of 2.33 percent. on is Murray Bain, chief executive of the Ministry of
These ratios are considerably less than those in other Science and Innovation. He is realistic about our track
economies similar to that in New Zealand.” record to date.
In response, the report called for a range of measures to “One of the measures we are behind on is the number
get things moving, some of which are now looking large of engineers we produce from our universities and
in the light of day. Professor John Raine, head of school of tertiary institutions,” he says. “Certainly the percentage
Engineering and pro vice chancellor of Innovation of graduates in engineering is a lot lower than Scandinavia
and Enterprise at AUT, was one of the report’s authors. and Germany where there is a history of strong engineers,
He has advised government and companies on how to although I was told even Germany is short of 75,000
stimulate high-quality R&D for at least the past decade, engineers at the moment, Scandinavia is short of engineers
but ultimately he sees the challenge as something and New Zealand companies are struggling to get enough
fundamental and grass roots. too. Those are the guys who often turn the science into



Percentage GDP as
R&D Funding
2010 2010
OECD AVERAGE NZ AVERAGE OECD AVERAGE NZ AVERAGE

1.5% 0.54% 2.33% 1.3%
Investment by Government
NZ business expenditure
(private) on R&D

THE TIMES, THEY ARE A-CHANGIN’ economic growth and innovation.
“A more efficient and effective ministry focused on lifting
Two major items from the Powering Innovation report’s overall productivity and supporting the growth of competitive
shopping list are now coming off the slipway. businesses is a crucial element in creating more jobs and higher
In November, Prime Minister John Key announced that an wages, and boosting our standard of living,” Joyce has said.
extra $120-$150 million is due to be pumped into the Crown We shall have to wait and see, but already there is some
Research Institute Industrial Research Limited, to transform disquiet about the consolidation.
it into an advanced technology institute that will serve as Professor Shaun Hendy, who is president of the New Zealand
high-tech headquarters to support industrial innovation. Association of Scientists, said the merger could have major
Meanwhile, the Ministry of Science and Innovation has benefits on the economic development front, but may
only just got underway, but is due to be swallowed up and marginalise important environmental and health research
merged with the Ministry of Economic Development and that didn’t have an immediate economic outcome.
the Department of Building and Housing and Department of “We know that more scientific research is needed to grow
Labour to form the new Ministry of Business, Innovation and industry, manufacturing and exports. But large components of
Employment from July this year. the science system are concerned with the broader view, such
The National government’s economic tsar Steven Joyce as environmental and health science research, areas that do not
will take the helm of this new mothership, with about 3,200 often deliver an immediate payoff but which can be immensely
staff on deck. Mr Joyce has said the new ministry will ensure valuable over longer time frames. Further change such as this is
co-ordination, focus and the government commitment to likely to add more uncertainty to funding.”


guide to R&D
The Idealog

a piece of machinery that works on the ground, so they
are important.”
But his ministry was set up and funded in 2010 with
the specific aim of delivering a step change to New
Zealanders’ prosperity and wellbeing based on innovation,
and he believes that is already beginning to take shape.
“What we are seeing is an increasing number of
companies interested in doing R&D, the profile has
increased,” he says. “We are seeing a lot more interest
in R&D than we did historically. The level of business
funding has been increased by government, and the
global market situation is certainly putting pressure
on companies to innovate to stay ahead of the game.
A lot of industry groups like Business NZ as well as the
regional economic development agencies, have been
stepping up their activities and saying ‘this is important’.”
And looking around us at the sorts of ideas coming
through, it is clear that Kiwis still have clever stuff up
their sleeves and between their ears: the big challenge is
getting the results into the world’s shops and businesses.
TIM THURLBY, FONTERRA Scale, as always, is a major barrier, but if New Zealand
can create a world-beating rugby team by getting
PORTFOLIO MANAGER, LOOKS relatively few people trained up and working together
properly, it should be possible to do that for research
AT THE MAIN BARRIERS TO and development as well.
And it’s a virtuous cycle: we need to be world beaters
R&D IN NEW ZEALAND’S ALL to attract world-class talent to our shores so we can stay
ahead in the years to come. Raine and Bain both told me
IMPORTANT PRIMARY SECTOR that top-quality engineering staff for both academic and
commercial research are difficult to come by at the
moment in this country; we simply don’t pay enough and
FROM AN ISLAND FAR, FAR AWAY tend to try to make up the difference with an appealing
R&D programmes are expensive, so to justify the investment lifestyle. This in turn means that even those engineers we
we usually need global market opportunities. are creating in our universities are liable to head off on
the big OE and never return.
IT’S COMPLEX “There is world class R&D happening,” says Raine. “It’s
The challenges of staying ahead in food technologies require just that, taken overall, there is not enough of it. It’s too
ever more sophisticated approaches to R&D. It is no longer confined to the larger companies or smaller companies
sufficient to understand food formulations and applications at that are almost all R&D, and likely to have been started
a macro level. We need to understand a raft of interactions at by university graduates. I think it’s very clear from the
the molecular level. That means adjusting our skill sets and our OECD data that the level of investment in R&D is tied
mind sets. It’s doable, but it takes time. to growth in GDP per capita. Because the level of
investment we have is less than you would want for
NEED THE INFORMATION a high-tech country, then the quality and growth of
Getting quality customer/consumer information to help define the high tech sector is likely to be less also.
the targets for our R&D is always challenging. With clearly “We had a lot of people come along to the review
defined targets, it is amazing how quickly our R&D teams can saying we think the real issue is that too many New
find solutions to a problem or opportunity. In contrast, poorly Zealand companies don’t know what they don’t know,
defined goals may produce a lot of fascinating work, they are just bumbling along, with a kind of number eight
but without a tangible outcome this almost inevitably fencing wire approach.”
ends up as a frustrating exercise for all. So it’s time to get on it and find out how that’s done.
AUTRES/248/IDE/R


The University for
the changing world

OUR ENGINEERS SEE ROBOTS
AS A WAY OF UNDERSTANDING
THE HUMAN MIND.
NOT TAKING OVER THE WORLD.

1982 was the year Star Wars: The Return of the Jedi went
into production. It was also the year Professor of Artificial
Intelligence, Albert Yeap, became obsessed with the mind.

Thirty years later, Professor Yeap and his team of
researchers at AUT are using robots, once reserved for
epic sci-fi’s, to push our understanding of how the mind
maps the spaces around us.

Professor Yeap’s army of ‘ALBOTS’ use sonar to navigate
through complex spaces. By analyzing the data collected
from these experiments, Professor Yeap is discovering
original insights into how the mind makes the connections
between the physical and the mental.

Using robots in this way is the progressive thinking you’ll
find at AUT and an example of how the brightest minds in
New Zealand are collaborating to push our understanding
of the world forward.

To find out more about research that matters and how our
researchers work with industry call 0800 AUT RESEARCH,
email research@aut.ac.nz, or visit aut.ac.nz/research
AUTRES/248/IDE/R

CASE STUDY

All sorted
Thanks to its commitment to research and development, Compac Sorting
Equipment has grown from a single sorting machine made for the family
orchard into a global leader in fruit and vegetable sorting and grading technology

N
ew Zealand is bursting with seen Compac grow from a small business to to securing an agreement such as the one
clever people coming up with a global group with more than 300 staff. He with Paramount Citrus.
ground-breaking ideas and believes the company’s success can in part “The sale was based on Compac having
world-leading innovations. But be attributed to its ability to develop and the best performing technology,” he says.
good ideas can come to nothing without the commercialise technology. “In an industry like ours, we need to invest
research and development needed to get them “Compac is good at taking technology from a significant amount of our turnover into new
not only off the ground, but into the market. the lab and commercialising it, making it robust product development. The funding partnership
That’s where the Ministry of Science and and reliable in the field. This is quite difficult with MSI has helped us accelerate our product
Innovation (MSI) is playing a crucial role in and I think we do it well. We also focus on development and enter new segments faster
driving New Zealand’s science and innovation hiring really good people,” he says. than we would otherwise have done. It’s also
sector. Over the past decade, MSI (through the Another important driving force is funding reduced much of the uncertainty we faced by
TechNZ programme) has invested more than for R&D. Ongoing support from MSI has helping to offset some of the significant costs
$500 million into thousands of New Zealand enabled Compac to develop products that have associated with the R&D for key projects such
businesses to de-risk R&D activity. MSI has helped it expand internationally, increase its as the Paramount Citrus solution. We’ve been
also provided additional value by matching profits to enable further R&D, and kept it able to take on additional staff and scale up
the businesses with global experts, facilitating ahead of the competition. the organisation to cope with this project.”
university interns, promoting best practice in Since 2009, Compac has received more than Ongoing R&D is extremely important in the
terms of developing IP, and introducing them $5.7 million in funding from MSI, including fruit sorting and packing industry. Compac
to potential collaborators in the science and a $3.8 million Technology Development Grant invests about 5 percent of its annual turnover
innovation eco-system. approved in July 2010. Some of this funding in R&D and looks to government funding
Many of the companies supported by MSI was put towards developing software that has and grants to supplement that. But it’s an
have gone on to be successful and sustainable led to a multimillion-dollar deal with the investment that’s seeing excellent returns.
– employing more staff, growing their revenues world’s largest grower, packer and marketer “It’s a technology race in many areas,”
and exporting their products and services of citrus fruit, Paramount Citrus. The deal will says Beach. “If you cannot sort the fruit
around the world. One such company is see Compac supply sorting equipment for effectively by automation and save as much
Auckland-based Compac Sorting Equipment. Paramount Citrus’ new 57,000m² packing on labour as the competitors’ machines, then
Founded in 1984 by Hamish Kennedy, an plant in Delano, California. you lose sales. We’re always trying to push
electrical engineer who grew up on a kiwifruit “We’re building the largest fruit-sorting the envelope with automation, especially
orchard, Compac develops and manufactures machine in the world that we know of, for around inspection, with our machine vision
fruit and vegetable sorting and packing Paramount,” says Beach. “It’s the size of a and internal inspection systems.
technology, machinery and software solutions rugby field and will sort 20 million mandarins “We’ve had 16 percent compound annual
that are now sold around the world. a day. It can sort fruit based on their size, growth over the past 10 years, and MSI funding
The company exported its first machine, an colour, shape and surface blemishes.” for R&D has been a significant reason behind
eight-lane unit for France’s largest kiwifruit The equipment is being manufactured in achieving this growth.”
packer, in 1991 and now Compac equipment and Compac’s factory in Auckland’s Onehunga and
technology is in use in more than 20 countries its reassembly and installation at Paramount’s
throughout the North and South America, California packing plant should be complete
Asia and Europe. by October this year.
Compac R&D manager Nigel Beach has been Beach says MSI has been an extremely
with the company since the early days and has valuable partner, particularly when it came


I D E A LO G I N A S S O C I AT I O N W I T H M S I

IN BRIEF
The Ministry of Science and Innovation
(MSI) has provided $5.7 million in
funding to Compac Sorting Equipment,
including a $3.8 million Technology
Development Grant approved in July
2010. This vital support has enabled

TEXT: DEIRDRE COLEMAN PHOTOGRAPHY: JESSIE CASSON
the company to become one of the
world’s leading providers of sizing,
sorting and grading technology for
the fruit and vegetable market.

CONTACT
For more details, go to
www.msi.govt.nz
Compac R&D manager Nigel
Beach and MSI deputy chief
executive, business, innovation
and investment Brett O’Riley.


guide to R&D
The Idealog

How to get the
cash for R&D
BLUE SKIES RESEARCH
COLLECT THE “R&D does need some tangible output. This may not
VOUCHERS – always be easy to define, but just as artists will struggle
TECHNOLOGY with an ‘art for art’s sake’ argument for funding, so ‘science
for science’s sake’ will always struggle for funding. In the
TRANSFER
Victorian era a lot of science was funded by wealthy patrons
VOUCHERS who could see the inherent value of knowledge creation. We
have modern day examples of this, such as the Bill & Melinda
Gates Foundation in the US, but fundamental and ‘blue
This government-funded skies’ research is an area just like the arts where continued
initiative provides about government support is vital.”
$5 million a year to New Tim Thurlby, portfolio manager, Fonterra
Zealand-based businesses by
14 accredited R&D partners,
including IRL, AUT and many SELLING A PRODUCT IS HARD,
of the other top academic
and commercial research SELLING AN IDEA IS HARDER
establishments. The vouchers
cover half the cost of the Selling just the merest possibility that a good idea might
project work you do with the emerge is the hardest task of all. So get ready to explain
accredited partner, the rest yourself. There are plenty of sources of funding out there, but
you have to find yourself. first you have to prove to them that you have what it takes to
It is aimed at businesses come up with something good, and even then you will
requiring R&D expertise in probably have to put a lot of your own money on the line
high-value manufacturing to keep their cash company.
and services that need help Murray Bain has simple advice for anyone chasing the
to get external experts into R&D dollars dished out by his team and others. “I would say
the mix. It is particularly the first thing they have to have is an aspirational objective
aimed at R&D technologies – they have to want to grow significantly, not just do stuff
in novel materials, health for the sake of doing stuff. They have to have an idea of the
information, communications market need they want to meet, and globally what that market
and agriculture. needs,” he says. “And they really have to have a knowledge
The R&D project can be of the technical application and the risks around that.”
product or process design, The MSI also often makes it a requirement that the company
trial production, product has a team behind it that knows its assets from its liabilities, at
testing. It can’t be used the very least.
for IP licensing, economic Professor John Raine also warns that just being good might
appraisals, business planning, not be good enough. “Per research dollar invested, the success
website development or rate is right up there with the best, but we are working from
statutory testing. quite a low and sparse base of investment.”


IMAGES SUPPLIED COURTESY OF FONTERRA


guide to R&D
The Idealog

DON’T STOP ASKING QUESTIONS THE MONEY FROM THE MINISTRY
Great R&D is all about asking the right questions, so it’s not
INCUBATE T O G I V E YO U A N I D E A O F T H E S U P P O RT
surprising that the folks who help fund R&D will have also have TO AVA I L A B L E , H E R E’S W H AT M S I I S S P L A S H I N G
plenty of their own. If you can’t answer them, and answer them ACCUMULATE THE CASH ON THIS YEAR.
well, you won’t get the cash.
“We always ask ourselves, why should we use taxpayers BIOLOGICAL INDUSTRIES RESEARCH
money to fund this company, what benefit is New Zealand Focused on the sustainable productivity growth of New
going to get out of it?” Bain says. “For the big guys, we are really Zealand’s primary industries, and the development of
looking for the spill-overs. With the smaller companies we are Signing up with a business premium food and industrial biological products and
looking to change the risk/reward ratio – if by funding them we incubators is a great way to technologies responsive to global consumer preferences.
can reduce the risk to the point where they can do things better get hold of R&D funding.
and faster than they otherwise would with their own resources. Here’s a list of those funded ENERGY AND MINERALS RESEARCH
“But if they have their own resources, that’s much more by New Zealand Trade and To increase the contribution of energy and minerals to New
preferable, because then they have more skin in the game and Enterprise. Zealand’s economic growth, enhance energy security and
that is what drives them to succeed. We try to be careful to assist New Zealand to meet future energy and mineral needs
ensure they are really stretching.” in efficient, affordable and environmentally responsible ways.
The government’s Smart Ideas investment mechanism, which Centre, Auckland
has a share of almost $60 million to hand out each year, has a www.bic.aut.ac.nz ENVIRONMENTAL RESEARCH
load more questions they will be asking before parting with any To fund environmental research that underpins the
funds, so it’s worth asking them at the outset of your project. North Shore management, use protection and enhancement of species,
www.ecentre.org.nz natural ecosystems, land, marine and freshwater resources,
contribution it will make? climate and atmosphere within New Zealand and Antarctica.
www.theicehouse.co.nz
the project? HAZARDS AND INFRASTRUCTURE RESEARCH
www.thebcc.co.nz To increase New Zealand’s resilience to hazards, support
sustainable urban development, building and infrastructure,
be achieved? www.creativehq.co.nz and help communities to manage growth and change, mitigate
risks and maximise infrastructure efficiency.
research implemented through multiple channels? Incubator, Christchurch
www.cii.co.nz HEALTH AND SOCIETY RESEARCH
technology platform that can be applied to the benefit of the The health component of the appropriation (which is the
business, the sector and/or the economy? www.upstart.org.nz majority) goes to the Health Research Council and is governed
by separate accountability documents. This addresses only
the society research component of the appropriation which
is managed by the MSI. The objective is to increase
BELIEVE IN ANGELS understanding of the social and economic factors contributing
“We are beginning to get New Zealanders who have started to improved health and social wellbeing of New Zealanders.
businesses, sold them off, have a bit of money in their pockets
and are putting back into the system some of their expertise, HIGH-VALUE MANUFACTURING AND SERVICES RESEARCH
knowledge and resources about how to do it. This growing To diversify New Zealand’s economy by undertaking research,
angel network, covers every major centre.” Connect with them science and technology that will enable the development
by going to newzealandinvestmentnetwork.co.nz and angelassociation.co.nz. of new technologies, novel materials and new products,
M U R R AY B A I N, C H I E F E X E C U T I V E O F T H E M I N I S T RY processes and services resulting in the growth of existing,
O F S C I E N C E A N D I N N O VAT I O N new and emerging industries.


Want to grow
your business?
Discover the benefits of R&D, how to access
relevant funding, and ways you can leverage
this to unlock the potential of your high-value
manufacturing business.

IRL has a proven track record of successful
R&D using advanced science and technology.

Working in partnership with business

CASE STUDY

Just desserts
What began as a labour of love has grown into a trans-Tasman pavlova
exporting business, thanks to some help from Industrial Research Limited

P
avlova is an iconic Kiwi – or should the Australian market, Gibson knew the “Improving production efficiency through
that be Australian? – dessert. While production process needed to become more automating in this case was not straightforward,”
the jury is still out on its origins, this efficient and cost-effective. says Cooper. “An engineering company had
meringue-based treat is certainly She sought help from an engineering already built a spreading base machine, but
loved on both sides of the ditch. We all know company, but they were unable to satisfy her the meringue base wasn’t consistent. This
the recipe: separate the egg whites from the requirements so, on the advice of her son, meant additional labour was required, defeating
yolks, beat them, add in the sugar, beat them Gibson approached Industrial Research Ltd the primary objective of the machine to save
some more and then spread the mixture to (IRL) for assistance. IRL is a Crown Research labour. The challenge was a stretch and IRL’s
create the meringue base. Institute that helps businesses succeed in the expert capability was required.
That’s fine if you’re just making one but marketplace by applying the latest scientific “Every dollar counted, so we supported
when you have hundreds to produce, it gets and engineering know-how and research. Country Culinaire with its application for
labour-intensive – something Trish Gibson Tony Cooper from IRL’s Industry a Technology Transfer Voucher through
and her staff at Hastings boutique dessert Engagement Group connected Gibson with the Ministry of Science and Innovation. The
company Country Culinaire know well. Since IRL’s Engineering Innovation team who Voucher was approved in late 2011 and was the
2001, when the company switched from making carried out an initial scoping study of Country first awarded to a Hawke’s Bay company. It
gourmet meatballs for the Hastings Farmers Culinaire’s processes. provided a 50 percent subsidy for the project,
Market and diversified into desserts, they’ve “Our engineers determined potential reducing the cost to a much more manageable
been handmaking their rolled pavlovas. productivity improvements that would $40,000, without which we would not have
Soon delis in Auckland were asking to be reduce bottlenecks and cut operating costs,” been able to move forward.”
supplied and the production of Country says Cooper. “One of the key improvements Unsurprisingly, Trish Gibson is delighted
Culinaire’s pavlova roulades and sticky date lay in the spreading the meringue for the with the outcome.
puddings stepped up a notch. To keep up with pavlovas. This was being done manually “I couldn’t have achieved what I achieved
demand, the operation was moved from the and required automating.” without Tony’s help,” she says. “I run a small
kitchen on Gibson’s farm to a more workable However, the cost of these challenging manufacturing business, and there just aren’t
factory and purchased larger freezers. automation solutions came to around $80,000. enough hours in the day for everything that
2011 was a year of exciting growth, with It was a significant sum for a small business, has to be achieved, let alone applying for grants
the first shipment of Country Culinaire but a necessary expense if Gibson wanted to too. Tony was just brilliant – I just can’t speak
desserts exported to Melbourne. But in take the next step to grow and develop an highly enough of the work he did for me – and
order to fulfil her dream of supplying to export market for her products. he nicely kept pushing me along. He helped me


I D E A LO G I N A S S O C I AT I O N W I T H I R L

TEXT: DEIRDRE COLEMAN
Trish Gibson is getting on with the business
of selling pavlovas to Australia.

so much with all the paperwork involved in and reduce wastage considerably while
applying for the Technology Transfer Voucher, maintaining staff numbers to cut my costs and
and with the financial side of my business.” be competitive in the export market,” she says.
Several of IRL’s specialist automation “When the meringue-spreading automation IN BRIEF
engineers, (who have experience in automation comes on line in October, that will also help
Industrial Research Ltd has worked
for New Zealand’s bovine and aquaculture increase our output enormously, as we need with boutique dessert manufacturer
industries) are developing the designs that to grow our volume too.” Country Culinaire to obtain
will help to improve Country Culinaire’s Not content to stop there, Country Culinaire Technology Transfer Voucher funding
manufacturing processes, including an is now also producing its own gourmet ice-cream and develop automated systems to
egg-white separation process. made using the leftover egg yolks from its improve the company’s manufacturing
“Our job is to solve these problems for Trish,” pavlova production. Packaged in unique roll processes. As a result, Country
says Cooper. “We don’t compete with quality tubes, the ice-cream is designed to be sliced Culinaire is now exporting its pavlovas
engineering companies around New Zealand into rounds for serving. In addition to exotic to Australia.
but we come with some pretty substantial flavours such as Orange and Cointreau,
brainpower and ideas and solutions that are Liquorice and Black, Tropical Fruit Salad and CONTACT
a stretch for most engineering business, and Chocolate and Chilli, the company is now
For more details contact
we’re putting this to good use for Trish.” tailor-making flavours for restaurant menus
Industrial Research Ltd
Having just been granted a licence to export around the country.
0508 225 5475
to Australia, Gibson already has orders from
www.irl.cri.nz
a specialist supermarket chain in Melbourne
and is negotiating to supply pavlovas to other
outlets in Sydney and Canberra.
“I’m hoping to improve my productivity


guide to R&D
The Idealog

The R&D
ecosystem
T
he innovation ecosystem is often seen they touch on all the R&D going on in the country is vital
narrowly as a ‘pipeline’ or ‘food chain’ – to the success of the ideas.
in other words, a linear commercialisation These days universities particularly are increasingly
model that goes from idea to full market open to commercial interactions, where serious commercial
establishment with stages in research, research goes on hand in hand with the process of
proof of principle development, prototype, product hand-rearing the next generation of idea-makers.
beta testing in trial markets and market launch. This “In most of the schools that have a professional practice
scenario may be true for ‘technology push’ projects element to them, you’ve got research that is linked quite
that emerge from publicly funded research organisations, strongly to the profession, and work that is orientated
but innovation typically paints a much more complex towards more fundamentally curiosity-driven or creative
picture. It commonly begins not with a discovery but with work,” Professor John Raine says.
the identification of a market need that triggers industry- He is able to point to several hundred links with
led innovation, which represents the large bulk of science industry from his department alone, ranging from
and technology innovation in New Zealand. academics doubling up as commercial consultants to
full joint ventures. That said, while some of them are
backed by government funding or commercially
Ideas don’t just appear at one end of a sponsored, the research funding the university gets
for its trouble remains quite modest.
conveyer belt and get passed on through “The research links to industry tend to be on long lead
technological or product development,” Raine says. “The
various agencies to the other end. They ping short, sharp problem solving, we don’t do a lot of that,
except limited staff personal consultancy, but there is
about all over the place, and are rarely taken an opportunity to do a lot more.
“I think overall the universities are reasonably
from conception to commercialisation permeable up to a point, but the number of staff engaged
in this sort of thing tends to be a small proportion of the
inside a single organisation total, because of the internal drivers on staff performance
and promotion. If we had a more eclectic approach to
Talking about an ‘innovation ecosystem’ would be that there might be more staff and knowledge mobility
unbearably pretentious if it weren’t an accurate analogy between the universities and commercial organisations.
of the way things actually work, or at least should work, We could do a lot more of that for the economic good of
out in the real world. Ideas don’t just appear at one end the institutions and the country.”
of a conveyer belt and get passed on through various Raine says that fostering close working relationships
agencies to the other end. They ping about all over the with business is part of his organisation’s DNA. Joint
place, and are only very rarely taken from conception to working is also at the heart of the ethos of Crown
commercialisation isolated inside a single organisation, Research Institutes such as Industrial Research Limited.
let alone a single individual. Richard Templer, general manager advanced
An idea might first appear in somebody’s PhD thesis, manufacturing technologies at IRL says: “IRL generates
then get a bit of government funding to develop, then get a significant amount of intellectual property every year
transferred to a commercial firm, which passes it back to and the vast majority is licensed out to commercial firms.
a Crown Research Institute to take it to the next level, We work in partnership with commercial firms and we
and so on. So the way that all the organisations interact as are looking for solutions they can use.




IDEALOG.CO.NZ/BUSINESSPLAN

/ 107

guide to R&D
The Idealog

“Quite often we are working with firms that have had
a bright idea and need us to do the research to translate
that idea into a proof of concept that they can
manufacture. For example, we are working with Klein
Medical. They had some great ideas, they needed us to do

Weta has worked with Victoria University
to establish a graduate programme in
creative IT. Their experienced staff
lecture on that programme, and that
supplies a new source of talent for Weta
and people who can start their own
companies with their expertise
the research to prove those ideas and their application,
which is a step to getting them to a product that they can
not only manufacture and produce but that has good
HELP IS science behind it so they can take it to the marketplace.”
ONLY A PHONE Murray Bain points to other countries as a model of
how these knock-on effects can work. “Somewhere like
CALL AWAY Sweden has 20-30 multinationals based there. That has
an effect. Partly because of their expectations in terms of
their suppliers, partly in people leaving those companies
to set up themselves, and partly in the sheer dollars they
The big institutions in can throw at R&D. And there is increased interest from
New Zealand R&D students taking those sorts of subjects at university: they
can see there is job prospects. So you get a range of things
Universities around the large companies that we are short of.
“The trick for New Zealand is to capture the companies
and figure out ways to generate more around them, to
build clusters around them. Weta has worked with Victoria
University to establish a graduate programme in creative
IT. Their experienced staff lecture on that programme,
and that supplies a new source of talent for Weta and
people who can start their own companies with the
expertise they have. So you can start developing more
companies around your big guys.
Crown Research Institutes “What we are trying to do is think about the number
of transactions that are going on between these different
organisations – making the early stage startups more
visible to the investors and companies that are looking for
and Research (ESR) new ideas and bringing more international investors.
“If there’s more stuff going on, and the ecosystem gets
more active, then the players in it will begin to do their
own thing. This is not something government controls:
Limited (IRL) we can push and nudge and incentivise, and in some n
areas fund. But it’s in the private sector, it’s transactions
between the ideas and those that can take them to market
Water and Atmospheric that really matter. And it’s our job to support that and
Research (NIWA) make it happen faster.”


Need to pay
Chaoxiang in Beijing?
Do it online with
live exchange rates.

ommunity builds Business builds Community builds Family builds Community builds Business builds
builds Family buildsC

Secure a live exchange rate with BNZ’s International Payments online.
It’s convenient, it’s cost-eﬀective, and it provides your supplier with an
automatic email advising them your payment is on its way.
siness builds Community builds Family builds Community builds Business builds Community Contact us today and let’s get you set up for business.

0800 273 916 bnz.co.nz/internationalpayments

Full details, our current Disclosure Statement and Qualifying Financial Entity Disclosure Statement may be obtained from any BNZ store or Partners Centre, or viewed on our website bnz.co.nz. BNZ terms and conditions, fees and charges
apply. Correspondent bank commissions, fees and charges may also apply. You must be registered for Internet Banking for Business and opt into international payments in Internet Banking for Business.

CASE STUDY

Upsize your R&D
Intellectual property specialist A J Park acts for more than a third of New Zealand’s
top 100 companies and almost half of global Fortune 500 companies. As one of the
experts contributing to this Guide to R&D, commercial partner Mark Hargreaves
gives his advice on how to get the most out of R&D-generated IP
Q What are the key ways in which a firm like originally intended. These processes include an idea may own the IP even though you have
yours can add value to the R&D process? research committees as well as decision and paid them for their time. And in some cases
A We can share our experience in terms of review points along the way. Often the most an employee will be the first owner of the IP.
working with clients at all stages of the R&D successful research organisations are successful Your company’s agreements with its employees,
lifecycle. Many of our staff have PhDs and/or because of the decisions not to proceed further consultants and contractors should be clear
have worked in research-intensive companies, with particular research projects and instead on who owns the IP generated by them. These
CRIs or universities. We’ve been involved in focusing more resource on projects that are agreements should also require the disclosure
research ourselves. At the outset we can offer likely to deliver results. of all inventive ideas and the assignment all
suggestions on how to structure a research IP rights to the company.
project, including advising on a range of formal Q What are some warning signs that R&D
agreements including non-disclosure, material may not be happening effectively? Q How best can companies keep track of what

transfer, collaborative research and joint A Companies going to market with products they have in terms of IP?
ventures. We can give guidance about when or services that aren’t in demand. In other words, A Carry out an annual IP audit. This may

researchers should be considering their IP undertaking research that is not aligned with the cover brands, patents, trade secrets, copyright,
strategy in terms of patents, trade secrets or company’s overall strategy and that isn’t closely and contracts including licences, business
some form of more open collaboration. We can tied to the market the company is operating in. information such as customer and marketing
give our views on what might be protectable, lists, and financial information. This also helps
while always focusing on what the commercial Q What are some indicators for large the asset valuation process.
outcomes of the research are hoped to be. companies that they should consider
For example, a client came to us with a view outsourcing their R&D?
to manufacturing and selling a diagnostic test A Smaller, more nimble players might be

kit. We determined that the real IP lay in the moving into areas traditionally dominated by
test rather than the physical kit itself and we the larger company. This can signal a need to
knew that the physical kits are heavily patented. introduce fresh ideas. Invention disclosures
We suggested the client look at licensing the might decline which can also indicate the same
test to a kit manufacturer and leaving the thing. The companies might find they are simply
manufacturer to deal with infringement risk better at marketing, supply chain and distribution
around the physical kit. This altered the than at putting in place processes and disciplines
research path for the client but helped them needed to do great research as well.
avoid infringement problems down the track.
Q How does a company ensure it owns the CONTACT
Q When assessing a client’s strength in R&D, IP its R&D has generated? Mark Hargreaves is a partner with
what key components are you looking for? A You should not automatically assume A J Park Law and A J Park Patent
A Clients that are strong in R&D typically have that your company owns all IP generated by Attorneys in Wellington.
motivated and skilled research staff who follow employees, third party contractors or consultants. For more information go to
clear processes for conducting their research. It can be difficult to separate your company’s
The most successful organisations have a clear confidential know-how from an employee’s
process they follow which reduces the likelihood general skill and knowledge. Also, a developer
of projects heading in directions that were not or designer who creates a product or develops


I D E A LO G I N A S S O C I AT I O N W I T H A J PA R K

WHO SHOULD BE RESPONSIBLE FOR WHEN SHOULD R&D TEAMS THINK
CAPTURING THE IP? ABOUT GETTING SPECIALIST IP HELP?
Your IP policy should identify the person or team
that: approach IP specialists?

decisions

and freedom to operate Q&A BY ANDY KENWORTHY

HOW TO PROTECT YOUR R&D-
GENERATED IP
Here are some of the tools top companies use to


guide to R&D
The Idealog

Amateur hour is
over: How to do
good R&D

E
verybody thinks they do R&D, even TelstraClear chief technologist William Lee says the
if they just ask their mates down the company has created an internal process to manage and
pub if something sounds like a good provide governance for projects: “Like stage-gate it’s
idea. But for R&D to be effective it a formal structured process to take a concept from an
must be systematic, consistent and idea, through conceptual planning, business case and into
comprehensively monitored. Like development and finally production. Gates with very
everything else in a business on the hunt for success, clear pass/fail requirements ensure that the phases are
it is best left to the most talented professionals. well-governed and that projects are well-managed
Keep in mind that it’s never a single linear process, but through the development process to production.”
rather cyclical and constant. It’s not a case of: research a Another tool is ‘future casting’ – imagining the future
product, then develop it a bit, then stick it on the shelves. you want to see once the project is completed and then
It’s more like: do some initial research, develop it a bit to charting the various steps back in time that will allow you
prove the concept, then do some more research on what’s to get there. Whatever tools you use, these days you have
out there and what’s possible, develop it some more, find to have one eye down the microscope to get the detail
a particular problem, devote some specific research to right, and the other looking out at the world, making sure
that, and on and on, ideally for multiple products at once. the whole commercialisation package is shaping up.
It doesn’t stop when you start selling either. If consumer “These days we have to integrate our thinking much
feedback, distributors or manufacturers uncover issues, more,” says Raine. “You have to try to see things as an
whether straight away or as you increase scale, you’ll integrated proposition as you move into commercialisation.”
need more R&D to solve them. And if your product is Templer adds: “The long-term frameworks around
a world beater, you can bet somebody will be copying it, R&D are changing in that people are no longer looking
or the public are hungry for the next big thing, so you will at R&D as an activity done in isolation but something
need more research and development to stay ahead. that is done in a collaborative network.”
Richard Templer stresses the importance of focus: “The Fonterra general manager, innovation, Mark Malone
key thing is a clear understanding of the right problem or believes the days of doing research contained within one
opportunity you are working on. You have to be clear on department are long gone: “Multidisciplinary teams are
what problem you are working to solve. Sometimes it’s not the key to successful innovation. By its very nature, taking
obvious. Somebody might be thinking, ‘How can I make new ideas to market requires multidisciplinary teams. It
this product more efficiently?’ when possibly they should also requires quality project management to co-ordinate
be thinking: ‘Where is the market going in the future?’ and the multiple disciplines and work streams involved.
‘Do I need to move into an entirely different market?’” “New ideas can have multiple origins. They can often
Professor John Raine says the process is often an be technology driven, arising from ideas within the
“iterative” one – characterised by or involving repetition, R&D community, or they can come from our customers,
recurrence, reiteration, or repetitiousness. or work that we do on market and consumer insights.
While many companies use a stage-gate process or Traditionally, the majority of ideas have originated from
similar to put each idea through agreed review points a technology push, but as an organisation we are placing
at which bad ideas will be binned if they don’t meet greater emphasis on market and consumer insights to
a specific set of criteria, most of the big players have shape our innovation portfolio instead of being led by
customised this to some extent to meet their needs. what is technically possible.”



GREAT R&D
STAFF –
NATURE VS
NUTURE
The perils of lab fever
Great R&D does not necessarily a great business make. While LET THE PUNTERS Raine spends much of his
some people can fit a business suit and a lab coat with equal working life with potential
aplomb, most can’t, and not realising you are one of those best DO IT: R&D IN THE R&D people. He tells us
left in the shed can be fatal for your entrepreneurial dreams. If what it takes.
you are addicted to testing, retesting and tweaking your product AGE OF SOCIAL “I think you’ve got to
when you should be moving on to others or at least getting this have a passion for finding
one out into the world at large, seek professional help. IRL has MEDIA out something new or
330 staff in the high-value manufacturing sector and the best developing something new.
part of 200 PhDs at work. They just might be able to help. The social media sector is still a bit like the Wild At the extreme scientific end
West frontier, with plenty of hustlers making you will find people who are
money more on the hype and mythology than the just endlessly absorbed with
reality. But like the Wild West, there is real gold finding something new, your
in them there hills. The trick is to tap into it in an archetypal boffin characters.
effective way, to answer real questions about your But when you move into
GOODBYE, business and effectively get some free consumer the applied research you
research, and even development. get people who really just
BLUE SKY? There’s no shortage of material to choose from, like the development stage.
as any travelling web-optimising salesman will tell I think you need a good
you. Clay Shirky, US writer, new media expert and basic education, discipline,
author of Here Comes Everybody: The Power of a willingness to think outside
In an economic climate as turbulent as the current one, there Organizing Without Organizations says the same the square, persistence,
is a temptation to go directly for the gold on every occasion. thing. He describes online blogging, conversations endurance and curiosity.
The argument runs that we simply don’t have time for namby- and socialising as a reflection of the ‘cognitive That element of creativeness
pamby blue skies thinking: everything has to have an obvious surplus’ left over after our daily work. This used to and inventiveness is
dollar at the end of it. be taken up with face-to-face conversation, then important, but there are
Our experts counsel otherwise. reading, radio and television. The process has people who are useful to
Raine says: “I think there’s still very fundamental research now become more public and more active, with the team because they will
going on which is purely curiosity-driven. You need to have that, consumers co-creating the content. just beaver away.”
because you don’t know what you are going to find and it could This can provide priceless information for But for all the qualities of
be useful.” Although he accepts that “the awareness of the need companies, well beyond just Facebook and the born engineer, they can,
to get a socio-economic outcome from research is growing and Google on what people like, don’t like, and much, and should, be trained.
you see the focus on the commercial output of research coming much more. How do they use or even abuse your Raine says: “Today
in earlier in that blue-skies-to full-commercialisation process products and services? What do they recommend most people would fail as
than you might have done 20 years ago.” to their friends? How do they like to receive them engineers without a degree,
Templer says: “Applied research is good for enhancing and and interact with the companies? as they wouldn’t have the
helping existing industry, but it is the blue skies research that Get this right, and you will have access to tools. Through education
creates the new industries.” consumers who will use, abuse and develop your you can turn even indifferent
Thurlby says they strike the blue sky/fast results balance product in all sorts of exciting and potentially students out as proficient
by a mixture of conscious resource allocation and the firm’s lucrative directions. You will also know real quick professional engineers. But
version of the stage-gate process. if your previously popular product just cleared the there are those who have
“At the portfolio level we allocate a certain percentage of consumer dance floor, or is making them scream a highly inventive, intuitive
our resources to new product development, which has defined for more. This more open philosophy and approach engineering capability. That’s
commercial targets. We also allocate a percentage to capability can even lead to a more open process of design, why you will find from time
enabling or new technology development projects. This latter that in turn opens up the potential for a wider to time successes with
group of projects contains research that could be game- audience for your wares. people who are entirely
changing but also carries a lot of risk.” self-taught.”


CASE STUDY

PHOTOGRAPHY: ROBIN HODGKINSON. TEXT: DEIRDRE COLEMAN

Andrew Lowe of Pulsecor (left) has formed a strong commercial
relationship with AUT University’s Professor Ahmed Al-Jumaily.


I D E A LO G I N A S S O C I AT I O N W I T H A U T

Vital science
Medical device company Pulsecor has been collaborating with researchers at AUT University
to create non-invasive diagnostic tools for measuring arterial health and heart function

F
ar from merely being a place of The technology was invented by New of the development advisory board I now
learning and theoretical research, Zealand anaesthetist Nigel Sharrock, and its have some input into the direction of the
AUT University is directly development has been greatly assisted through IBTec group alongside other industry people.
contributing to the success of a collaboration with IBTec and its director, “My involvement with student research
New Zealand businesses and our country’s Professor Ahmed Al-Jumaily, over the past six has fed into what’s happening at Pulsecor,
economic development through commercial years. Professor Al-Jumaily and his team have and has been great from a technology
research partnerships. been working on cheaper, easier, less invasive perspective,” he says.
AUT University provides valuable research methods for screening and treating a number “Working and collaborating with AUT
and development services to its clients through of common illnesses, and Pulsecor quickly University has definitely been very valuable
the practice-based researchers in its schools recognised the outstanding expertise IBTec in terms of building our fundamental
and research institutes, which range in focus had in their area. understandings and looking at research
from biotechnology and artificial intelligence “Professor Al-Jumaily had a similar focus questions. It would have been much harder
through to tourism and sports performance. to what we were doing with Pulsecor and to achieve what we have without AUT’s input.
Among them, the Institute of Biomedical we were both keen to get some projects off The resource IBTec has been able to bring to
Technologies (IBTec) is a multi-disciplinary the ground,” says Lowe. “Pulsecor had the bear would’ve been much more difficult for
research institute that combines the resources mathematical knowledge and we were already a small company like us to obtain.”
of the faculties of Design and Creative making progress developing the sensing side
Technologies, and Health and Environmental of our device, but we needed a fundamental
Sciences as well as the School of Engineering. understanding of the physiology in order to
IBTec also collaborates with other universities make the most of what we were doing.”
as well as hospitals and medical industries, Through its relationship with AUT, Pulsecor
and has conducted research for more than successfully applied for government funding
20 different companies. for the collaboration and secured a vital
IBTec’s work for local companies has research grant through TechNZ.
particularly focused on the area of biomedical “This grant, over a three-year period, was
devices. One such collaboration has been with the first and the most significant grant we’ve IN BRIEF
Pulsecor Ltd, a New Zealand medical device received,” says Lowe. “We’ve received around
AUT University’s Institute of Biomedical
technology company that’s been researching $700,000 in grants from various sources, Technologies is one of 18 research
and developing the next generation in non- including a number of fellowships for a group institutes offering quality research
invasive cardiovascular assessment technology. of Masters and PhD students working on the expertise to companies looking to
Pulsecor has developed a device to measure mathematical modelling of arteries.” further their research and development.
arterial stiffness. Previously this could only be Pulsecor’s relationship with IBTec has grown IBTec has engaged in a long-term
measured through surgery, but the Pulsecor increasingly close. Now, with the bulk of the collaboration with Pulsecor to assist in
device makes it as simple to assess as a blood research and development work concluded, its development of products that enable
pressure reading, says director and chief Lowe – who has a PhD and a background in non-invasive measurement of arterial
technology officer Andrew Lowe. medical engineering research – has remained health and heart function.
“Our vision is to see this technology involved in the IBTec research group and has
wherever you find blood pressure equipment joined the institute’s advisory board. CONTACT
– the hospital, operating theatre or even in “Ahmed has always been keen on having
For more details, phone 0800 AUT
your home,” he says. “The idea is that we can industry links,” says Lowe. “And to be able
RESEARCH or email research@aut.ac.nz
widely spread technology for measuring to build a strong commercial relationship is
arterial stiffness and manage cardiovascular beneficial for IBTec and for us from the research
risk much better than it is today.” side. We work very well together. As a member


The Idealog Guide to R&D

Recomendados

Recomendados

Más contenido relacionado

Similar a The Idealog Guide to R&D

Similar a The Idealog Guide to R&D (20)

Último

Último (20)

The Idealog Guide to R&D