In Focus: R&D and science in the GII

In this article, Redvespa Senior Consultant Pam Wright continues her exploration of the Global Innovation Index (GII), looking at innovation in science in New Zealand.

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Within the 2024 Global Innovation Index (GII), Human Capital and Research is one of our best-performing pillars. However, this ranking comes with an asterisk as the data for six of the sub-pillars within this area is noted as being outdated, and many of our rankings in the sub-pillars of Human Capital and Research rank lowly, between 60 and 75.

While Graduates in Science and Engineering is an input of concern for the scientific sector in New Zealand, the ranking for Research and Development (R&D) provides reason to celebrate. In this category we’re achieving positive results, ranking 23rd globally, and, importantly, the data isn’t considered to be outdated. 

‍Science & innovation in New Zealand: where R&D excels

New Zealand’s science sector and government appear to have differing opinions on the recent and future changes to New Zealand Science and research. Scientists are focused on job losses, experienced people leaving New Zealand, and the reduction in research funds. On the other side, however, the Government talks of their changes to the science sector as being positive. Naturally, the Government defends these changes from an economic perspective, promoting a view to helping grow our GDP. In response, the New Zealand Association of Scientists asks the question:
“what has society lost by making the connection between economic growth and science the singular pillar of our science system?”

Our current GII ranking reflects this disposition: ranking highly in some areas and poorly in others. 

This juxtaposition, and some of the reasoning behind it, is reflected in New Zealand ranking 62nd for Graduates in Science and Engineering, and 23rd in Research & Development (R&D). A significant contrast between one driver for innovation and another. 

Some graduate opportunities remain, giving some hope to that specific GII ranking. For example, the Paihau/Robinson Research Institute at Victoria University of Wellington is recognised worldwide as pioneers and leaders in high-temperature superconductivity (HTS) research, and they have been going strong since being founded in 2014. The Institute provides opportunities for undergraduate and postgraduate students to work in industry-linked and core research programmes. This is an opportunity to do real discovery work, and make genuine advances to science while gaining hands-on experience.

When it comes to R&D, the shift is more noticeable and, in some cases, seismic.

In the last 18 months, government-driven R&D has undergone a significant restructure in New Zealand. In December 2024, Judith Collins, then the Minister of Science, Innovation and Technology, announced the Government would divert half of the$75 million Marsden fund to research with economic benefits. In addition, the fund would no longer support any social sciences or humanities research. Collins said that the fund should focus on “core science that supports economic growth and a science sector that drives high tech, high productivity, high value businesses and jobs.” 

Additional funding cuts include nearly $500 million from planned science infrastructure and $30 million from key research funds. The sector has seen more than 350 science jobs cut, with more losses expected. As a result New Zealand stands to lose scientists overseas, a similar outcome to the engineering sector, as they relocate to areas that value their skills.

Restructures and funding cuts have created a sense of uncertainty about the future of science in New Zealand amongst scientists and research groups. Redvespa’s own research into innovation within New Zealand businesses shows the Professional, Scientific, and Technical Services sector is more concerned with job cuts and downsizing than the general business population.

On the other hand, our current R&D ranking of 23rd in the world is based on a long list of success stories, and it will be interesting to see the impact of the Government’s shift in approach when the 2025 edition of the GII is released later this year.

That Government shift is significant in 2025, with the structure of the science sector changing from funding seven Crown Research Institutes to three new, “future-focused” entities. These new entities will be split across Bioeconomy, Earth Science, and Public Health & Forensic science. The intention is to advance innovation in agriculture, aquaculture, forestry, biotechnology, and manufacturing.

The Government is also promoting the implementation and use of AI. Here, one of the ambitions is to combine AI and biotechnology to produce innovative results in our labs, hospitals, and homes. The Government is focused on using AI safely and effectively while boosting productivity and delivering better public services with the intent that New Zealand is able to develop tools that support medical initiatives and improve care for our ageing population.

The Government has also recently released its AI Strategy in an attempt to reduce barriers to AI adoption. It is expected that the growth in use of AI could improve New Zealand's GDP by adding $76 billion to the GDP by 2038. Current Science, Innovation and Technology Minister, Dr Shane Reti, notes:

“We must develop stronger Kiwi AI capabilities to drive economic growth, and this strategy sends a strong signal that New Zealand supports the uptake of AI.” 

Science funding issues are not new, nor are the symptoms resulting from the funding shortages. Early this century, it was already being recorded that many talented scientists were moving to work overseas. This led to a number of New Zealand companies conducting their research overseas, both a sign of and a contributing factor in New Zealand losing our scientists offshore.

At this same time, there were concerns that the wider public in New Zealand did not adopt scientific knowledge and innovations. There were calls for a greater emphasis on science education and communicating science achievements to the public. There were also concerns that Māori and Pacific Island people were under represented in the areas of science. It’s arguable that these same concerns are relevant now.

‍Looking Ahead to the 2025 GII

Ultimately, perception is everything. New Zealand’s science sector and the Government have differing opinions on the recent and future needs of science and research in New Zealand. With the Government focused on financial input and output, and the sector on less tangible and more broadly valuable aspects of their work, it will be interesting to continue to chart New Zealand’s ranking in future editions of the Global Innovation Index. 

When the 2025 GII is released, we’ll start to get a sense of whether the sector’s shift enables us to maintain our high R&D standing, and whether there’s any movement for those graduates as the next generation of New Zealand’s scientists. While it may come too soon for significant movement, it will start to answer questions like:

• How does the move from seven research organisations to three compare globally?
• Is our AI Strategy a realistic driver for increasing our GDP over the next decade?
• Do funding cuts have a broader impact on scores than clearly defining directions for research?

For an overview of the Global Innovation Index, click the image below.