Science reform uproots the tree it needs to bear fruit

The current science reforms aim to improve efficiency and increase returns to the New Zealand economy from research. Whether or not they achieve that objective depends on two key factors: sustained investment in discovery science, and an understanding of the relationship between science and commercialisation.

Defunding excellent basic science to focus on commercialisation (as this Government is) is like pulling an apple tree up by the roots to harvest its fruit. Successive government-funded grants for basic research, over a significant timeframe, are necessary to build capability in what investors call ‘deep tech’ – commercial opportunity based on real intellectual property.

To continue with the same metaphor, how do we choose which apples will grow? Governments like to pick winners, and that has been an unapologetic message from the science system reform process – that this Government would be more explicit about choosing its research priorities.

The Prime Minister’s chief science adviser, John Roche, said in a recent interview that the economic benefits of science were unlikely to be realised until the form and function of the science system are improved, i.e. through the current reform process.

That involves selecting research priorities (or ‘pillars’), and allocating in advance how much funding each of these areas will receive.

The four priority areas that the plan identifies for investment are:

• Primary industries and bioeconomy
• Technology for prosperity
• Environmental sustainability and resilience
• Healthy people and a thriving society

Of course we should be investing in these areas, and if the goal is to provide a framework that explains to the New Zealand public what they are contributing to, through supporting publicly funded research, that has real value.

The problem is assuming we can know which discoveries will create economic value.

The companies emerging from the MacDiarmid Institute (where I’m director) include those that focus on clean-energy technologies, some on agriculture, some on medical applications. What they have in common isn’t a target sector, but a scientific capability developed over many years.

They look like they fit neatly into a single pillar from the outside from the end of the story, but not if you go back to their beginnings.

Olivia Ogilvie, a MacDiarmid alumna and now co-founder and CEO of Opo Bio (which aims to produce the world’s best performing collagen for cosmetic and medical applications) said recently: “Most startup advice tells you to start with the problem, ‘find and understand the problem, understand the customer, then build the product’.

“But deep tech doesn’t work that way. You start with an invention, and then go looking for the best problem it can solve. It’s a different path: long, often messy, and carrying both technology risk and market risk.”

It’s usually pejorative to call something a solution in search of a problem, but there is more to this than that. Commercialisation is not a one-step process, from a predefined problem to a targeted solution. More often, researchers develop a capability and spend years finding out where and how it might have the most value.

Finding product-market fit is about building a bridge between what is desperately needed and what is possible. What is possible can change – that is the role of research – but it takes time and iteration to build a bridge to the correct market needs.

There are several startups in the MacDiarmid Institute portfolio that remind me of Ogilvie’s quote.

Liquium, for example, which now develops efficient catalytic materials that will reduce the energy and carbon cost of ammonia production (for fertilisers as well as a zero-carbon fuel). The original research into these materials was targeting electronic device applications. This isn’t translation from basic into applied research so much as it is from quantum into clean tech.

There is also Orbis Diagnostics. They originally launched as ‘point-of-cow’ diagnostics for protein and fat measurement in milk; they have since pivoted to develop the world’s first point-of-care test for Hepatitis B. Same tech, different market.

Advemto was built on sustained funding from the MacDiarmid Institute and the now-disestablished Marsden Fund – based on excellence alone. But while those research grants were for materials science and solar photovoltaic applications, the commercial opportunity is in tech for the life sciences, a result that was not foreseen at the time of publicly funded basic research.

Pivots in deep tech are more common than is apparent from the outside. Whether you are looking at quantum, cleantech, agtech or medtech: materials science, starting from physics and chemistry and biology and engineering, is the common foundation in these stories.

The challenge for any priority-driven funding system is making sure it still leaves room for those unexpected discoveries. Sir Paul Callaghan famously argued that New Zealand scientists should focus on the “weird stuff”. Not because researchers should pursue eccentric ideas for their own sake, but because a small country is unlikely to outcompete larger nations by working in the most competitive areas. Success often comes from specialised expertise that looks niche at first but later proves useful in unexpected ways.

The priorities that this Government has come up with would be fine, if they were limited to only a targeted part of our science funding. If they guided investment into later stages of research and development, or even targeted sector-specific infrastructural needs – addressing the challenges for startups to scale up in New Zealand is an area of investment in which it might make sense for the Government to be picking winners. Once the apples are ready to harvest, you can select those that are best to eat.

But all this depends on a healthy science system at the discovery end of the spectrum. One in which excellence is the only priority: a healthy tree, with deep roots.

The cuts we have seen over the past year threaten everything that the Science Investment Plan is intending to achieve. We should pay attention to the companies being created today, but also to the research pipeline that produced them. That will enable us to produce companies and real economic benefit to New Zealand a decade from now.