The NZAS submission to the SSAG is now available (PDF).

The text of the submission is below (apologies for any formatting issues). The submission was authored by Troy Baisden with Lucy Stewart and members of NZAS Council.

NZAS submission to SSAG phase 1 consultation:

In this submission, we express views developed since 2020 on what’s required to make key foundational improvements in the New Zealand RSIT^[1] system. These improvements would enable the restoration of our processes, institutions and careers to the high-quality system Aotearoa New Zealand deserves and was once known for. We first express concern that the SSAG and UAG processes, while offering some improvements on previous processes, are too limited in fiscal budget, timeframe and diversity of expertise to address the breadth of the Terms of Reference (ToR), particularly in the manner outlined by the initial consultation questions. 

We express frustration not with another genuine effort at consultation, but rather the nearly four decades of navel gazing^[2] where valuable system diagnoses and recommendations are repeatedly lost to an affliction that the OECD’s 2007 analysis^[3] identified as “automatic steering syndrome” – where oscillations between a few policy principles are accompanied by a lack of monitoring and evaluation. This has resulted in a confusing RSIT system with decreasing performance, capacity, respect, and trust. We wish to assist the SSAG in defining urgent repairs in the right direction.

As previously expressed^[4] and updated for SSAG’s ToR, our two key recommendations are:

First, because great science needs foundations, we must rebuild careers and capability with a focus on addressing the nation’s challenges and making RSI attractive to young talent, particularly to Māori. We express concern that your questions do not address careers and success in the global competition for talent as an essential ingredient in restoring a successful RSIT system. Career paths play a pivotal role in rebuilding and sustaining capacity. They deserve consideration as an essential prerequisite for furthering international leadership in indigenous research. 

Second, we must reforge an outward looking system able to address our big challenges. Rebuild compatibility with international collaborations and funding. Reconnect across industry, universities and all research providers. Retain and improve the ability to address challenges in areas like health and the environment. Reimagine enduring, integrative and international solutions using our collective failures to design RSI to tackle the biggest challenge – climate change – as a guide. By defining and brokering the win-win opportunities that diverge from perceived environment-economy trade-offs, RSIT must help lead the response to climate change as the biggest shift in industry and innovation in generations.

How can we get there? The creation of the SSAG reflects a systemic problem defined by almost four decades of growing confusion. We applaud the coordination and intent of the SSAG and UAG, yet observe that the long-standing problems cannot be solved in the timescales defined for your reports nor in 3-year electoral cycles. The stated commitment of the coalition government to fiscal austerity^[5] makes solutions more difficult – and change more treacherous. We therefore strenuously note that the SSAG’s recommendations must be more parsimonious and targeted than the questions for consultation imply. Further, we suggest the SSAG and UAG should begin to frame a call for a process that can recommend serious and coordinated change over a longer timeframe – such as a Royal Commission.

We begin by addressing your Q8 because of the problematic role that prioritisation of government research played in Te Ara Paerangi as the substantive case for justifying new RSIT funding and structures. Around Wellington, and in the reports provided to the Priorities panel, it is apparent most government departments neither respect MBIE’s capacity in RSIT nor have clear strategies for their sector ready to prioritise research needs, and prefer that cases to Treasury address current needs. We can conclude that, with few exceptions, our concerns about the nation’s economy, environment and societal well-being cannot be separated from weakness in RSIT: we lack and actively erode our long-term strategies in areas critical to our nation that cross government, industry, and society.^[6]

A prominent exception demonstrates what is achievable: in the sector around Plant and Food Research (PFR), we see that a successful institution plays a critical role in the development, delivery, and maintenance of an industrial strategy for the sector. However, it is the sole success from excellent 2007 and 2010^[7] recommendations, which worked to guide a self-organising system through the merger of two Crown Research Institutes (CRIs) to better achieve their core purpose. 

To restore a broad, successful self-organising system that builds trust and innovation, we must solve some conundrums of science policy, including a hierarchical prioritisation of research funding where each level can identify mechanisms for strategy, funding and evaluating success. Problems can be linked to embedding siloed policy development within MBIE rather than allowing the self-organisation as recommended and implemented^[8] but later reversed following the 2010 CRI Task Force report. Developing a more capable stand-alone RSIT ministry remains an alternative. We argue that the acid test for formulating strong science policy is the ability to take responsibility for developing a capacity for monitoring and evaluation – achieved by neither FRST/MoRST nor the present structures in MBIE. In the current environment, such a function should provide an early warning system for areas of nationally significant capability at risk of collapse. We argue that specialist science-led institutions are more capable of these roles than a ministry, but only if competition is decreased and trust rebuilt. 

Further, there must be greater clarity on whether applied outcomes should primarily be funded by Vote SIT or the relevant funding Votes of other ministers, and how science policy supports cases to Treasury’s processes. For example, research for conservation and environment outcomes provides an illustrative example because it has been the subject of detailed studies of the lack of accountability between environmental outcomes and the funding of research by the Parliamentary Commissioner for the Environment.^[9] Yet perhaps most importantly, it has been an area where our natural and managed ecosystems needs place us at a pinnacle of international interest and attractiveness, yet the confusion and funding culture has led almost all potentially visionary leaders to leave the country or be lost to invisibility or efforts to manage and fix the system. 

Specifically, FRST’s ‘Outcome-Based Initiatives’ funding (2005-2015) has spawned enduring confusion about whether key research should be funded by Vote Conservation and Vote Environment versus Vote Science Innovation and Technology. A choice must be made to solve this challenge and must also stabilise funding caught in the grey area between the funding sources from each Vote. We argue that this issue is fundamental: a democratic society expects researchers and academics to be the beacons working at generational time horizons to guide and attract strategies, rather than follow the whims of 3-year parliamentary terms. No system delivering the morass we’ve seen for 20 years can muster the public funding and support that scientific leadership and vision requires. The system we must reforge may be most notable for depending primarily on ‘earned trust’ for quality assurance, as highlighted in the diagnosis of the UK system’s woes by Sir Paul Nurse.^[10]

We can contrast the desired state of RSIT in which the overall system and its components are appropriately funded and trusted to deliver outcomes with the present situation, where quality assurance and steering of public funding is provided largely by the consultancy revenue that funds ~50% of many CRIs. Much of this consultancy is effectively short-term research undertaken for government clients or in response to government policies and resulting litigation, which means we have developed a system that erodes public trust and is seen in too many cases as a source of rent-seeking sales pitches from ‘scientists’. We argue that the erosion of trust relates to our own bespoke version of The Big Con^[11] – whereby we’ve created and effectively subsidised Crown consultancies that recreate our own version of the syndromes of “infantilising our governments and warping our economy” generated by overdependence on the Big Three and Big Four management and accounting consultancies. The dominance of consultancy must be replaced by focus on strategy and transforming CRIs away from for-profit structures that sit under the Companies Act.

A principal step toward a better future for science must involve a shift away from this problematic model – which we picture metaphorically as buying a fleet of well-regarded used cars that have performed well internationally, rather than continuing to panel-beat our rusting Trekkas.^[12] Ultimately, government research should give rather freely to our firms and our society wherever net benefits and spill-overs occur. The return of the global political economy to trade barriers and competing industrial strategies amplifies the importance of rethinking the need for a public research system that aligns the role of government research with industrial strategies that now need to address the problems of the 21st century including climate change, overlapping hazards and threats.

This leads to a clear case for reform of our public research organisations (PRO) (Q4 and Q5) within a larger RSIT system (Q3). They must be better able to connect to universities, government, business, communities, and with their international counterparts. Their ability to build innovation and trust is crucial yet lies on a spectrum that defines a need for different forms of industrial strategy, which guide their public face and internal ethos, as well as their approach to intellectual property. The future system should consist of PRO that are closer to or embedded in universities, as well as wānanga and Māori organisations, in ways that further public good, innovation and the closing of gaps and transaction costs. Our CRIs were formed to enclose applied research and consultancy at a time when this made sense – before understanding of Post-Normal science evolved^[13] to suggest different structures are required to address the challenges of the 21st century, including climate change.

Although it is possible a single organisation combining today’s Crown Research Institutes could function with divisions able to follow differing strategies, it seems by far best to allow the potential strategies to set the future form in the following areas:

1. Primary production sectors - these sectors operate differently from tech or health and are subsidised internationally. Our dependence on primary exports requires this area to be given appropriate priority and thought. PFR serves as a leading example that must not be destabilised. It can aid AgResearch and Scion toward similar success, and accelerate progress toward capturing more complete segments of the value chain reaching consumers.
2. Environment and Hazards – Research in environment and conservation, climate change mitigation and adaptation, as well as seismic, volcanic and weather hazards all share cases where their primary value is public. These areas can be prioritised by assessment of value to the public, as well as the value of quantifying and managing risks affecting our nation as a prerequisite for investment. In addition, almost all of our research in these areas is largely or entirely unique to our nation, our ocean or territories such as Antarctica, so that the knowledge, IP, and researcher capacity has limited transferability with the rest of the world.
3. Resources, Technology and Innovation – there are clear opportunities and roles for research that can be done anywhere in the world, yet grows successfully from clusters that build on our strengths. Sir Paul Callaghan referred to our likely successes as ‘weird and weightless’ – now exemplified by the emergence of leading rocket and space technologies. There is a role for the legacy of DSIR’s success, but it must be reconstituted to better connect today’s Callaghan Innovation with the successful parts of Industrial Research Ltd that entered Victoria University of Wellington, and a growing range of other university and independent capabilities. 
4. Health – research in the health sector provides an important additional area where CRIs have not played a dominant role, yet the emergence of the Health Research Council and other structures have enabled successful research and strong leadership to build on itself across many institutions with clear national benefits. The relatively high transferability of health research internationally has helped fuel success, brought recognition of leaders, and made investment and IP management relatively straightforward, and even able to address issues of Māori data sovereignty.

There may also be strong justification for a number of smaller special cases, which have at times thrived or struggled as independent research organisations. Notable also is the need to support museums and the unique services their curators and collections provide to research and society.

Each of the four major areas above (especially #3) as well as the special cases should have the ability to scale up appropriate yet differentiated mechanisms to fund innovation and scale globally where appropriate (Q6). New Zealand’s funding should be rationalised to support a measure-to-manage approach, questioning the Research and Development Tax Incentive’s effectiveness as it balloons well past half a billion dollars.

Clarifying these strategies would return us to a more optimal structure for funding research (Q7) that favours collaboration over the global tendency toward contestability that has fueled ‘hypercompetition’. We believe the correct steps are to identify the strategies that define PROs and Universities and provide stable funding bases that are more internationally compatible (lower overheads). Missions might have to partially await the development of improved national strategies, but can also catalyse and coordinate them. The most competitive funding should aim largely at seeding fundamental research and filling gaps. A clear opportunity to move away from our system’s problematic combination of high overheads and contestable funding can be outlined following Mazzucato’s book sequence from strategies, value, missions, and questioning alignment with consultancy. We believe that the failure to prioritise this sequence was a major error in Te Ara Paerangi’s White Paper process that deserves reconsideration.

The RSIT system and its funding must also take steps to enhance connectivity and stability and clarity of accountability for delivering public value; remove contorted governance, false accountability with high translation costs linked to managerialism. We must remember that the delivery of research outputs and outcomes is only possible through the capacity of institutions and researchers with stable and vibrant careers. Currently little is done to incentivise these aspects of the system, nor encourage meaningful diversity in thought or delivery.

We conclude by answering your Q1: the public RSIT system and its funding must provide a foundation of support for the economy and wellbeing that the nation expects. It must rebuild a compact between science and society, so that society feels served by a system that also represents their needs and exudes competence deserving of trust. It should contrast from the present system which too often feels self-serving in ways brought on by commercialisation of state-subsided institutions. Your recommendations, and their implementation, will determine the degree to which the transition is made to respect and trust in public RSIT versus continuation of the warnings of the 2010 CRI Task Force report, that our institutional structures would choose a million dollars to their bottom line over 100 million to New Zealand’s bottom line.  

Finally, we recommend that the SSAG consider a list of key documents and submissions that provide a view of what’s gone repeatedly wrong, despite valid diagnoses and incisive recommendations. The past problems with implementing successful system change should be targeted in structuring your group’s recommendations, in part through clear recommendations for evaluation and monitoring. Our co-presidents and councillors would be happy to discuss these matters with you.

Notes:

^[1] We use RSIT to define Research, Science, Innovation and Technology, purposefully including ‘research’

^[2] https://scientists.org.nz/Reshaping/13350462

^[3] OECD. 2007. OECD Reviews of Innovation Policy: New Zealand. pp. 12-13. doi:10.1787/9789264037618-en

^[4] https://scientists.org.nz/news/13274451

^[5] Including elimination of the Productivity Commission and evidence units and roles in key ministries.

^[6] Mazzucato, Mariana. 2014. The entrepreneurial state : debunking public vs. private sector myths. 

^[7] Jordan, N and others. 2010. "How to enhance the value of New Zealand's investment in Crown Research Institutes." Report of the Crown Research Institutes Taskforce. Wellington

^[8] https://www.beehive.govt.nz/sites/default/files/CRITaskforceFinalreport.pdf

^[9] https://pce.parliament.nz/publications/environmental-research-funding-review/

^[10]https://www.gov.uk/government/publications/research-development-and-innovation-organisational-landscape-an-independent-review

^[11] Mazzucato, Mariana, and Rosie Collington. 2023. The Big Con: how the consulting industry weakens our businesses, infantilizes our governments, and warps our economies. New York: Penguin Press.

^[12] https://en.wikipedia.org/w/index.php?title=Trekka&oldid=1218920808

^[13] Funtowicz, Silvio, and Jerry Ravetz. 2020. "Post-Normal Science." In Science for Policy Handbook, 14-18.