Outcome 5: Dynamic business environment fostering innovation and international connections

Our economy operates within a global context and is heavily reliant on two-way trade, based on competitive advantage. It is important for the economy to adapt and innovate.

MBIE works to create a dynamic business environment. This is one where businesses can respond to new opportunities created by shifts in trade, productivity, preferences and technology. MBIE also seeks to increase capital intensity, develop international connections and support economic growth and capability building.

Investing in research

MBIE aims to build a high-performing science and innovation system by funding research and

development programmes. This year, various funds and partnerships enabled innovation that helped support the growth of knowledge in the country.

Endeavour Fund: Transforming Aotearoa New Zealand’s future

The Endeavour Fund is Aotearoa New Zealand’s largest contestable research fund providing investment in projects to improve the country’s future. This year, $246 million was invested across 68 projects for the next five years with the potential to transform the economy, environment and society. These were selected by the Science Board, an independent statutory board, following a review by domestic and international experts. Significant areas of investment include manufacturing, primary production, natural hazards, freshwater environments and biosecurity. Projects include a programme to develop new wearable technology to change the way neurological disorders like Parkinson’s disease and brain cancers are treated and a programme to increase support for arable crop processors to become successful international suppliers of high-value plant-based food ingredients.

Several past Endeavour programmes have received investment through the PreSeed Accelerator Fund, which supports early stage technology commercialisation. Of the 42 startups incorporated between 2019 and 2023 resulting from PreSeed investment, at least 20% are known to stem from intellectual property generated out of an Endeavour programme. Six notable examples that have collectively attracted significant venture capital investment are:

• AllegroEnergy – long duration redox flow batteries for mass energy storage
•  Kitea Health – world-first brain implant for remote health monitoring
• Novolabs – a world-first disinfection system for treating liquids with ultraviolet light
• Captivate – commercial scale carbon capture to reduce greenhouse gas emissions
• Precision Chroma – pioneering new chromatography for purification of biological byproducts.
• Periomedic – using ultrasound to prevent gum disease.

National Science Challenges

The 11 National Science Challenges tackled some of the biggest science-based issues and opportunities

facing Aotearoa New Zealand, including environmental, economic, technology, health and wellbeing challenges. These challenges were impact focused, aiming for real-world changes for New Zealand. They received $680 million over 10 years, with funding ending this financial year.

One of the challenges was the Science for Technological Innovation (SfTI) challenge, to enhance the capacity of New Zealand to use physical sciences and engineering for economic growth. The New Zealand Institute of Economic Research reviewed a small selection of more advanced projects, closer to commercialisation, funded through this challenge. The Institute found that the projected revenue of just one of the selected projects, if successful, had the potential to pay off the entire $106 million investment in the SfTI challenge within 10 years.

Examples of other challenge success stories include:

• High-Value Nutrition clinical studies on Greenshell™ mussels in collaboration with Sanford Ltd, which underpinned the creation of the Sanford Bioactives Division, and Sanford investing in a new $25 million bioactives extraction facility in Blenheim.
• New Zealand’s Biological Heritage produced and successfully trialled a prototype RNA tool for the targeted management of Varroa mite, affecting the honey industry, which is pending product registration in the United States of America.
• The Deep South improved global climate models used in the United Kingdom, United States of America, Australia, Singapore, India, South Korea and New Zealand. These models contribute to projections of future climate in the Intergovernmental Panel on Climate Change assessment reports.

 Other science, innovation and technology funding

In addition, MBIE supports several additional science, innovation and technology initiatives, including:

• the Aotearoa New Zealand Tāwhia te Mana Research Fellowships, administered by the Royal Society Te Apārangi. It aims to support around 300 fellows over the next decade to produce impactful research through the development and retention of talented researchers.
• an applied doctorates training scheme that aims to enable applied research training so students can respond to practical problems in industry and other applied settings and enter careers outside of academia, such as in industry and Crown research institutes.

Supporting business research and development

To become more productive, New Zealand businesses need to increase their investment in research and development. The Research and Development Tax Incentive (RDTI), which MBIE helped develop, provides a 15% tax credit on eligible research and development expenditure. It aims to lift overall research and development activity in New Zealand and generate benefits for the wider economy. To date, the scheme has over 1,880 actively enrolled businesses and has supported $4.5 billion of eligible research and development expenditure, with $676.7 million in paid tax credits. The first five-yearly statutory evaluation is under way and will consider the scheme’s impact, administration and compliance.

Creating connections through outer-space initiatives

The New Zealand Space Agency at MBIE coordinates the partnership between the US-based Environmental Defense Fund’s subsidiary MethaneSAT LLC and the New Zealand Government that facilitates New Zealand’s first official government-funded satellite mission to detect and measure global methane emissions. Gaining a better understanding of agricultural methane emissions will provide much-needed evidence to support reductions for New Zealand and across the globe.

On 5 March 2024, the satellite was launched on a SpaceX flight from Vandenberg Space Force Base in California and is expected to send operational data to Earth later in 2024. New Zealand’s participation includes:

• hosting the satellite’s mission operations control centre and leading an atmospheric science programme
• studying global emissions from agriculture
• bringing together the relevant government agencies to prepare a response plan in the unlikely event of a rocket launch incident.

As part of the $6.5 million Catalyst Fund allocated for Earth observation projects, 12 New Zealand research teams received up to $75,000 to conduct Earth observation feasibility studies with NASA partners. The studies look at:

• food production
• how floods and droughts can be anticipated
• measuring environmental impacts, including tracking pasture quality with satellite imagery and dynamic forest mapping.

Inspiring space exploration

The New Zealand Space Scholarship encourages the next generation of talented people to pursue careers in space-related fields by funding their participation in international internships in the United States of America offered by NASA.

In 2024, six students were awarded the scholarship to support internships at NASA’s Ames Research Center and Jet Propulsion Laboratory. With the support of a mentor, students work on space-related research and development projects, such as improving spacecraft positioning techniques and use of computer systems that model the human brain and nervous systems to expand the autonomous capabilities of small spacecraft.

Following their internships, these students will bring home skills, knowledge and connections that will be invaluable for them personally and will also help to strengthen and grow New Zealand’s science and space sectors.

Radio spectrum five-year outlook

The radio spectrum is a vital resource that enables wireless digital connectivity. It underlies and supports many economic activities, contributing to Aotearoa New Zealand’s economic growth, innovation and global competitiveness. Creating an environment for digital transformation using radiocommunications technologies and radio spectrum resources is a high priority.

MBIE is responsible for the regulation, administration and investigation of the national radio spectrum.

The speed of technological development in telecommunications requires us to monitor emerging wireless technologies, their use of the radio spectrum, and to anticipate areas of growth and development in spectrum management.

This year, MBIE released a five-year spectrum outlook for 2023 to 2027, to manage the growing demands that affect the use of the radio spectrum. The outlook examines the direction that digital transformation might take, noting the international context and implications for New Zealand.

Government procurement

Government procurement supports many aspects of New Zealanders’ lives. It makes sure that goods and services are provided for schools, hospitals, transport, primary industries, science, service industries and so on in a cost-effective way.

We have been working on a new government-wide procurement platform that will capture high-quality data and enable greater coordination and collective purchasing power across multiple agencies. The first phase of the platform is planned to go live in the next financial year.

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