Government beefs up funding for R&D growth grants by $74.6m
Science and Innovation Minister Paul Goldsmith announced the government is beefing up its support for Callaghan Innovation's research and development growth grants to meet growing demand.
Goldsmith announced an additional $74.6 million in funding through the Innovative New Zealand programme in Budget 2017 and the additional funding means a total of $657.2 million is now available over four years through the Growth Grants programme, he said at a presentation at Australian-listed Volpara Health Technologies, a Wellington-based company that develops digital health solutions for breast cancer screening.
"The government is continuing to make a major investment in support of business R&D in New Zealand," he said. "What we are trying to achieve is to help New Zealand businesses be more competitive internationally," he said. The end goal is to encourage businesses to invest more in R&D to ensure greater resilience and diversity, he said.
Recent data from Statistics New Zealand showed that total R&D as a proportion of gross domestic product increased to 1.3 percent in 2016, up from 1.2 percent in 2014. While New Zealand lags the OECD average - which is 2.4 percent - Goldsmith downplayed any suggestion the government isn't doing enough.
"The government has been very active in this space and we have consistently raised our investment in R&D and it sends a signal that over the next few years businesses can have the confidence to invest. We are not going to chop and change. There is a long-term commitment to support R&D," he said.
Regarding whether the government is using the entire budget allocation for the growth grants he said businesses have to apply for them so it's a demand-led system of funding "but we have seen very high demand for those grants and that's why we are increasing our investment," he said.
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Volpara chief executive Ralph Highnam said that Callaghan is a key reason why the company opted to set up shop in Wellington. "It's our engineering and R&D hub," he said. Among other things, the company's software for analysing mammograms measures breast density, a key indicator in early breast cancer detection. The software is now being used in 35 countries and Highnam said Callaghan was instrumental in moving the company from onsite software onto cloud-based software, which is now reaping a commercial benefit. Callaghan funding - through career grants - enabled them to have access to PhD students, who were subsequently hired, he said.
Highnam said the government's increase is "reasonable" and overall the funding is good for companies like Volpara that "continually invest in R&D and seek to outperform and out-compete companies around the world."
While he said the US is the company's biggest market, it is also focused on Asia, with research in China currently underway. "Breast cancer is becoming endemic across Asia right now and they are desperate to work out what to do about that," he said.
The company's shares last traded at 33 Australian cents, down 2.9 percent.
(BusinessDesk receives assistance from Callaghan Innovation to cover the commercialisation of innovation)