Innovate or stagnate, says OECD

AN INTERNATIONAL report into innovation culture calls for a change in attitudes and more Government investment to prevent New Zealand becoming a global innovation backwater.

A review of innovation policy by the Organisation for Economic Cooperation and Development said New Zealand was a healthy breeding ground for innovation with an open, creative society and a predictable business and policy environment.

Released by Prime Minister Helen Clark, the analysis had a page of commendations.

However, it also listed areas the Government and research communities needed to address for fear of slipping behind.

New Zealand risked languishing in the lower end of the gdp per capita scale, losing entrepreneurs and expertise, and being forgotten by the global investment community.

Ms Clark said some of the recommendations were already being addressed, but Business New Zealand chief executive Phil O'Reilly said the report was less positive than the Government was saying.

The OECD's list of positives paled next to the list of challenges, he said.

"The politicking is much more soothing than is warranted. If you look at what is going on in competitor countries, you would have to be more concerned than what is coming out," Mr O'Reilly said.

The report said there were too many small innovation support programmes sporting a myriad of different objectives.

It said that government innovation policy and support was uncoordinated and fragmented, and urged the Government to increase funding to New Zealand Trade and Enterprise and the Foundation for Research, Science and Technology.

Limited national access to broadband was a barrier to innovation, networking and creative industries and the level of R&D spend in New Zealand was one third of the OECD average, the report said.

Mr O'Reilly said he hoped that the positive spin from the Beehive would not overshadow the OECD's concerns.

Without big companies to drive private research and innovative thinking, government had to step in and bridge the cultural gap between research bodies and the business community. "There's a disconnect. Success in innovation in New Zealand is going to be the excellence of the relationship between government and the private sector."

Finland, an agricultural-based country with similar demographics to New Zealand, had a science council headed by the prime minister that directed the country in research spend and innovation strategy, Mr O'Reilly said.

"The Nordic (countries) eat us alive. They systemise research spend; it's something that is missing here, that strategic drive at very senior political levels towards the needs of New Zealand."

Research, Science and Technology Minister Steve Maharey noted one recommendation, tax incentives for research and development, had been introduced in the last Budget with $630 million of tax credits.

Economic Development Minister Trevor Mallard acknowledged the required link between private and public sectors.

"The challenge is to work out a way of getting the connections right so we can sustain a good idea through to successful commercialisation," he said.

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CAPTION:

Growth partners: Economic Development Minister Trevor Mallard says there needs to be a link between the private and public sectors in fostering innovation. He says the challenge is getting the connections right.

Picture: MAARTEN HOLL

Phil O'Reilly: Government role vital.