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Budget 2019 signals strong commitment to innovation and high-value tech

This article was published on 31 May 2019

At a glance

  • Callaghan Innovation receives funding to manage and deliver five initiatives

  • Redevelopment of Gracefield supported with release of $50m capex and $25m opex

  • $6.769m over four years committed to Industry 4.0 Demonstration Network

  • $9.57m over two years committed to New Zealand Food Innovation Network

  • $18m to continue Product Accelerator and Bioresource Processing Alliance programmes

  • $25.5m to support the commercialisation of innovation in New Zealand, including for the Technology Incubator programme

Innovation, emerging technologies and potentially high-value tech research and start-ups will all receive a boost as a result of Budget 2019.

“Funding decisions announced in Budget 2019 show a clear commitment to innovation, building a productive nation and transforming the economy,” says Callaghan Innovation Chief Executive, Vic Crone.

“Government has previously stated its aim of raising New Zealand’s R&D spending to 2 percent of GDP over the next 10 years and that is supported by some of the funding announcements in this budget.”

Callaghan Innovation has received funding for five initiatives including $50 million in capital expenditure and $25 million in operating expenditure for the redevelopment of the Gracefield site in Lower Hutt, the main centre for its Research and Technical Services (RTS) teams and labs.

The site currently contains 34,000m2 of laboratories, office space, workshops and pilot labs, rapid prototyping facilities, machine shop, a supercritical fluid extraction plant, materials analysis and testing labs, and the Measurement Standards Laboratory.

Gracefield Innovation Quarter

Prolonged under-investment in the site over previous decades means the initial focus will be on remediation including seismic improvements, asbestos removal, roof and weather tightness, but the funding will also help Callaghan Innovation deliver on its vision for the precinct: Gracefield Innovation Quarter (GIQ) – a national hub for innovative research and commercial activity. 

In the last financial year, through the Gracefield site, Callaghan Innovation’s RTS teams extended specialist R&D support services to approximately 270 companies.

“This places us all in a strong position to pursue our ambitions for the future of New Zealand innovation,” says Crone.

“It represents a significant vote of confidence in the future of GIQ and the importance of the work being conducted on the site.”

A further four budget initiatives will be administered by Callaghan Innovation.

Industry 4.0

A commitment of $6.769m over four years has been made to establish an Industry 4.0 Demonstration Network and complete the Skills Shift project supported through the Future of Work Tripartite Forum.

Industry 4.0 has already been identified as a priority focus for Callaghan Innovation, with its potential to improve productivity and global competitiveness by applying digital technologies to deliver smarter, more efficient manufacturing processes.

The Demonstration Network will play a vital role in allowing New Zealand manufacturers to experience these technologies in a real factory environment, learn from those who have gone through the adoption process and increase industry understanding and uptake of these important technologies.

Food innovation

Support for innovative, high-value food products and related technologies also received a boost, with $9.57m over two years committed to New Zealand Food Innovation Network (NZFIN).

NZFIN is a national network of food processing pilot plants and hubs that provide the facilities and knowledge needed to commercialise new products and processes.

The FoodBowl and FoodSouth will receive the funding through Callaghan Innovation, corresponding to the portions previously provided by Economic Development Agencies, ATEED and Christchurch NZ.

Commercialisating innovation

A package of initiatives to support the commercialisation of innovation in New Zealand has been allocated $25.5 million, with the focus on scaling up existing, proven programmes.

These programmes include the Commercialisation Partner Network Fund, the PreSeed Accelerator Fund and the Technology Incubator programme and the aim of this funding is to increase the impact of public investment in research and science, and develop more effective pathways to translate research into functional applications that deliver market opportunities and advantages.

Callaghan Innovation is responsible for the delivery of the Technology Incubator programme and support for start-up businesses.

The scaled up Technology Incubator programme and additional funding will be used to provide more operational funding to Technology Incubators and increase the pool of funding for Repayable Grants, meaning that more businesses can be supported.

Future-proofing industry

Government has allocated $18m over four years to continue the Product Accelerator and Bioresource Processing Alliance programmes, previously funded through MBIE’s former “Enabling Technologies” funding mechanism.

The Product Accelerator helps connect industry with research expertise, solving industry problems, building productivity and supporting the transformation of the economy through diversification and improving its knowledge intensity.

The BioResource Processing Alliance helps convert low value primary industry and other biological waste streams into high-value export goods, reducing waste and increasing New Zealand’s exports in general.

Callaghan Innovation will become the agency responsible for delivery of both programmes through our Research and Technical Services (RTS) teams.

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