hi,
read the responses and here's my 2c:
1 - do good science (this is really hard)
2 - turn this into a product that people will pay $$ for (this is also really hard)
rocket science huh?
i'm all for basic research but tripling the amount of papers and patents churned out will not spontaneously lead to any kind of payback no matter how much scientists implore you to just, just... believe. the trick is to try and do good basic research in areas that you have a credible chance of turning into products and in tandem bootstrap the entrepeneur ecosystem that will help get these things out the door. the blunt fact of the matter is that fonterra should be doing basic R&D as a matter of course and shouldn't need prodding with public funds (as they probably are, their brand new research centre is based in melbourne i believe but i haven't seen anything for ages about that).
so - who will poney up the matching funds from industry? why limit yourself to big companies already resident in nz? venture capital is global - there is no reason a smart niche player with a solid piece of science can't attract capital here and launch the company with matching funding from the pool (for instance). rinse and repeat a few times and if you're lucky some of the first few will re-invest in start-ups and you get a positive feedback loop. it is not a crime to invest $20M in a company and sell it off for $250M if it outgrows the nz economy. the learn-by-doing payback for the nzers involved is invaluable and soon enough the depth of experience will increase and we will be able to hold them here longer and longer. nothing breeds success like success.
what industries should we choose? well, i don't like govt picking winners but i certainly think they should support them as and when they pop up i.e. nobody would have picked PJ to be such an outstanding success with LotR yet for lack of basic broadband infrastructure an entire supportive industry never got off the ground (i believe the NZ Institute had some nice numbers about $/MB transport costs) - we have a world leading farming sector and world wide trade in commodities is going up - it would seem a no-brainer to position ourselves as the 'smart' food nation/ the 'clean' food nation etc etc providing it's backed up with reality and isn't just marketing.
another angle is 'what shouldn't we bother researching'? this is anathema to the classic academic rallying cry of 'fund excellence wherever it is' but the blunt fact of the matter (mentioned by someone already) is that clustering is a good thing - 5 world class people in the same room are far, far more valuable than the same 5 people scattered geographically. things that nz shouldn't bother with are things that are massively important to other, richer countries that already have expertise in or close to it i.e. nuclear energy, carbon capture and storage, rice DNA, anti-ageing GM technologies, high tech health equipment etc. that's not to say that we couldn't have niche roles within these 'mega' trends that could potentially become very large rather, i'm saying i'd be horrified if $50M was slapped down with the expectation that NZ was going to develop the next hospital MRI scanner/search engine/single chip DNA sequencer - it's not the courage i'm questioning, just the sanity. we have enough strengths to work with, go with the flow.
profitablity - large organisations by and large struggle with innovation (read The Innovators Dilemma) purely because they need to have massive returns to justify the effort. it's a lot easier to move and adapt if you are small and sniping at the underbelly - i think this is a reasonable strategy for nz science commercialisation, i.e. don't go head-to-head with nestle on bulk ice-cream with one large super-duper effort, have lots of little companies trying to develop, say, lactose-intolerant ice cream and sell it for $$loads to parents for b'day treats etc eventually a market will move and your small furry rodent company will be bang smack in the middle of the mammal revolution. it's also a lot easier to grow this way than try and put 2 dozen people on the ground in yr 1 - not a trivial statement in the under-resourced nz science/commercialisation pool. this isn't to say its easy and that there is no competition but by their deeds shall ye know them - if the fund rolls into some gargantuan govt institution that only deals with other ginormous companies via MBA middle men then i believe this money will dribble away and 10 years from now we'll be wondering where the hell it went.
size - assuming the details aren't an accounting trick - i think this is a credible and proportionate response (albeit a decade late) for one industry sector/theme. i think another 2 would easily be justified. nz has more un-tapped resources than just green grass that no-on else is going to commercialise for us i.e. tourism and how we deal with the travel footprints and i think broadband's potential for niche nz businesses is huge (think dozens of 37Signals).
cheers,
dr joe

congrats david, it must have been a tough few weeks - amusing PA submissions aside.