Rich Katherine: Debate on Crown Entities Public Organisations  and State Enterprises — In Committee 
Rich Katherine: Debate on Crown Entities Public Organisations  and State Enterprises — In Committee 
[Volume:631;Page:3063] 
KATHERINE RICH (National) 
: 
 One of the first points I would like to make is to express disappointment that the Education and Science Committee did not look at the New Zealand Venture Investment Fund Ltd in greater detail. I am holding the committee’s report and I am sad to say it is just a pro forma report of some four lines. I think it would have been important for the select committee to have a serious look at the fund because since it was established in 2002 a lot of water has gone under the bridge. I think it would have been an opportunity for members to ask some questions about progress. Economists seldom agree on many things but one of the things they do agree on is the role that innovation plays in the economic growth of any country. In fact some of the academic literature suggests that as much as 90 percent of a country’s economic growth could be attributed to technical change technology development and innovation. So a subject area of this nature I think is one that is vitally important and one that perhaps should have been looked at in more detail. 
The fund was set up in 2002 and it seeks to place about $100 million into commercial projects so that we can do a better job as a country of commercialising the technologies that come out of our Crown research institutes and universities and that come as a result of the work of inventors and entrepreneurs. The aim of the fund is to leverage additional funding from the private sector and I understand the aim is to ensure that private sector dollars match State sector dollars 2:1. So I am interested in the fact that the capital committed so far is some $60 million yet the amount invested through the programme—the Venture Investment Fund plus the private sector funding—is $86.7 million. So that is not even close to doubling the amount put in by the fund. The Venture Investment Fund funds other venture capital funds so the aim is to ensure that the organisation manages taxpayer funding and gives it to fund managers who will do a good job. 
One of the things I am keen about when it comes to venture capital is that it does give us a greater opportunity to commercialise the outputs of research that is generated here. It allows Kiwis to take a greater ownership in some of the technologies that are developed here and it means that overseas companies cannot just sail into town pick the cherries out of the best technologies and sail off again. So I think it gives New Zealanders a better opportunity to ensure that we attempt to commercialise our projects here and take a greater stake in the value that hopefully can be accrued from some of the research that we have made into various technologies. Venture capital is a vital part of the commercialisation process but $100 million in my view is very much a drop in the ocean. It is a very small amount of money. If we look at the amount put into venture capital in this country surely we can see we have to do more to encourage the availability of venture capital so that companies here that do have a bright idea and that have a new innovation as a result of technical and scientific research have the opportunity to commercialise their new products here. 
I understand that there are some successes. In the long term venture capital is a very risky business. Some projects that are funded can take 10 20 and sometimes 30 years before they become commercial successes but one such project I understand is Ectus put together through the University of Waikato. A company was established around a technology and some people there and it has just recently been sold to a Norwegian firm. 
If this country is to make improvements in its economic growth we have to get used to talking about the commercialisation of technology supporting the technologies that are developed here and making sure that we extract as much as we can out of the technologies that we as taxpayers fund through Crown research institutes universities and other areas.