David Thompson Posted:
So very, very true. It beggars belief that we consider ourselves to be a developed nation when so much of our economy is based on selling milk powder or logs. BTW, I own a Plinius amplifier (my second) that drives a set of Theophany speakers.
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David Thompson Posted:
A robust but sobering report. It concerns me that confidence is rising, yet sales and exports are down and "manufacturers and exporters are still lagging behind other sectors". Surely we should wait until we're earning more money before we start spending more?
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siemens Posted:
Yes true! The only thing that will never die in this world is the nature and its science behind it. Great post.
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Kieran Ormandy Posted:
Thanks for the question Steven, Germany has seen increases in manufacturing employment since 2009, and Switzerland has had stable manufacturing employment between 2006 – 2011, even in the face of ongoing Euro-zone issues. Korea has seen increases in manufacturing employment since 2008 and Israel experienced large increases since 1998, while being stable over the last 4 years. Singapore has had increases in manufacturing employment over the last two years. These countries all value their manufacturing sectors and work to protect them, this is reflected in the above numbers and their performance through the GFC. Note data around the above examples was sourced from OECD labour market stats.
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John Walley Posted:
Point one: you should have no doubt what our Association says publically represent the views of our members. Point two: we don’t knee jerk responses, if you trace back our comments around NZPower you will see them link all the way back to our research in 2004 and 2005. All that material is fully linked from our comments above. Point three: you will note our comments on major users, sadly the same advantage does not accrue to smaller industrial users. The perverse incentives of the LRMC approach in all this are well known. Point four: the NZMEA is not like any other Association in New Zealand we admit only manufacturers and exporters into membership, and our public expressions are the views of that restricted membership.
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Callaghan Innovation

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Last week we were fortunate to have Dr Mary Quin, Chief Executive of Callaghan Innovation come speak at our Leaders’ Network event. Callaghan Innovation has been in operation for over two years now, after its formation and taking over of IRL and other activities. It was great to hear Dr Quin give an outline of Callaghan’s goals and services and allow members to ask questions and give some feedback on how they feel things have gone thus far.

Callaghan Innovation’s goal is one that most of our members can appreciate; to help business succeed through technology. Many manufacturers are designing and creating new technology for sales, others are using new technology to improve processes and most a mix of the both. As we all know, in the competitive global world of manufacturing, simply sticking to old technology does not cut it; we have to invest in technology, Research and Development (R&D) and push forward to be successful.

Firstly, I want to outline the main grants schemes which are relevant to manufacturing businesses conducting R&D. Both of the following grants work on a co-funding basis, meaning Callaghan covers a percentage of the eligible R&D spending, effectively making R&D exercises more affordable, while incentivising businesses to increase their own R&D spend.

The first and largeest of the two grants is called the Growth Grant. This is aimed at businesses that have a track record of conducting R&D in their business and have fairly well-established R&D and innovation processes. These grants are effectively a refund of 20% of the businesses’ eligible R&D spend, capped at $5 million per year. To be eligible for these grants, a business must have spend at least $300,000 on eligible R&D in the last two years, or spent 1.5% of its revenue on R&D in each of the last two years.

The second and more relevant to smaller manufacturing businesses or those new to R&D, are the Project Grants. These are aimed to help co-fund a specific R&D project in a business, be it for developing new products, processes or systems. It has to be said, though, that if we look at current practice, Callaghan appear to have a strong preference for supporting new product development projects. The grant can provide between 30 – 50% of the eligible R&D costs associated with the project.

We heard that two of the most important overarching factors that Callaghan Innovation are looking for in funding recipients, be it for their Growth or Project Grants, are an ambition to grow the business, especially exports, and a strong technology focus – key points to keep in mind when applying for grants.

The ownership of Intellectual Property (IP) has often been an area of concern for companies when looking into applying for Callaghan Grants – it was great to get confirmation that Callaghan does not take any ownership of IP created in activities funded through grants. In fact, Callaghan still holds IP that was transferred to them from their previous forms, such as IRL, and are looking into ways to best transfer the useful IP to businesses to be made use of - this may well represent an opportunity for some members.

The other part of Callaghan Innovation's work is their services. Grants are the most talked about, but their services make up a majority of what they do, and are an opportunity for members to take advantage of, as well as an area the NZMEA aims to help Callaghan improve and refine to best serve the needs of the manufacturers and exporters. These services include in-house research and development experts that can help with parts of technology and product development (previously IRL activities), training courses on topics such as innovation processes, and facilitating business collaboration. Another growing service is their network of access to external experts, both here and around the world, which can be used to connect with experts you may need for any particular R&D project.

Having said all that, it is still clear that parts of what Callaghan Innovation does, particularly around their policies and practise for grant funding, could be made to work better for manufacturers and exporters.

So what can we do from our side to help?

  • Encourage members to separately account for their R&D expenditure – that is a pre-condition for receiving a Callaghan grant.
  • Work with Callaghan to get them to take a more realistic view of innovation in manufacturing businesses. In particular, we want Callaghan to better support process innovation (as opposed to primarily product innovation), recognising that such process innovation is a large component of keeping New Zealand manufacturers competitive on a global scale.
  • Help with the process of connecting individual members with the right subject matter expert within Callaghan.  

tags: innovation, callaghan, r&d, research, development, manufacturing, exports, grants


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