Under section 103 of the Crown Entities Act 2004, I direct Callaghan Innovation to give effect to Government policy as specified in this direction.
INTRODUCTION
In this direction I set criteria for Callaghan Innovation to adhere to for assessing proposals for Research, Science and Technology (RS&T) funding. This notice uses the following format:
- Funding decided by Callaghan Innovation
- Criteria to be applied
- Administrative processes.
RS&T FUNDING DECIDED BY CALLAGHAN INNOVATION
Callaghan Innovation must use one of the Business-led Research and Development (R&D) investment tools when making a decision in respect of a proposal for RS&T funding.
Funding allocated by Callaghan Innovation may be allocated from any of the following output expenses:
- For funding allocated using a Business-led R&D investment tool:
- Biological Industries Research.
- High Value Manufacturing and Services Research.
CRITERIA TO BE APPLIED
In making funding decisions, Callaghan Innovation must:
- make funding decisions consistent with the following:
- The Public Finance Act 1989; and
- the "Description of Funds within Vote Research, Science and Technology" within the Supplement to the
New Zealand Gazette, 31 January 2011, No. 9, page 177.
- make funding decisions consistent with the criteria specific to each investment tool, which are:
- Objective of the tool
- Eligibility criteria
- Judgement criteria
- Weightings for judgement criteria
- Parameters specific to the tool.
In addition to the criteria listed above, Callaghan Innovation must take into account the overall mix of relevant investments. Detailed criteria specific to each investment tool are set out in more detail in the following pages.
ADMINISTRATIVE PROCESSES
Callaghan Innovation may issue standing or periodic calls to generate proposals for consideration. The calls for proposals will be consistent with the criteria above, and will provide guidance for applicants. This guidance may include, where applicable:
- the area(s) of investment in which a funding decision is required
- more detail as to how the criteria in this notice apply to the area of investment
- the investment tool (or initiative within the investment tool) to be used
- the amount of funding available
- specific outcomes sought for a given investment process or decision
- other timeline and process information.
Calls for proposals will be published on the Callaghan Innovation website
www.callaghaninnovation.govt.nz
Criteria Specific to Investment Tools
BUSINESS-LED R&D TOOL
OVERALL POLICY OBJECTIVE
The business-led R&D tool relates to research and development activities led by businesses. The objective of this tool is to increase New Zealand businesses’ investment in research and development to support increased productivity.
INITIATIVES
Four initiatives sit within the business-led R&D investment tool.
1. TechNZ Targeted Grants.
2. TechNZ Capability Grants.
3. Technology Development Grants.
4. Technology Transfer Vouchers.
Criteria relating to each are set out in following sections.
1. Technology New Zealand Targeted Grants
POLICY OBJECTIVES
The objectives of this initiative, in addition to the overall objectives of the Business-led R&D tool, are to:
- grow business investment in research and development in areas of government priority; and
- improve the ability of businesses to develop new or more sophisticated technologies.
ELIGIBILITY CRITERIA
- Only a business or a group of businesses are eligible to receive funding via this tool. A business or group of businesses may nominate a representative to receive funding.
- A business must be a person or entity that is in business and resident in New Zealand, and:
- where a group of businesses are applying together, each of the businesses involved must meet these criteria.
- where a business or businesses nominate a representative to receive the funding, the business or businesses must meet these criteria. A nominated representative does not need to meet these criteria.
- Businesses may not be an entity established under or governed by the Education Act 1989, Crown Research Institutes Act 1992, Local Government Act 2002, Local Government (Auckland Council) Act 2009 or the New Zealand Public Health and Disability Act 2000; or an entity that is 50% or more owned by one or more of those types of entities, and:
- where a group of businesses may receive funding together, such groups may not include one or more of the above types of entities; and
- where a nominated representative may receive funding, these entities may, however, act as nominated representatives.
- Where a nominated representative may receive funding, the nominated representative may only receive funding when Callaghan Innovation is satisfied that those funds will ultimately be used or applied by or for the benefit of the nominating business or businesses.
Research and development projects that significantly increase a business’s technological expertise are eligible to receive funding under this tool.
JUDGEMENT CRITERIA
Callaghan Innovation must assess proposals against the following criteria:
Benefits to New Zealand Risk or Success factors
A. Investment returns B. Pathway to market (commercial outcomes)
Key Question: Assuming this project is successful, what are the potential commercial returns to the business and the benefits to New Zealand? Key Question: What is the likelihood the business will successfully commercialise the new technology?
C. Technical stretch and capability building D. Ability to deliver (R&D outputs)
Key Question: Will the research be technically challenging for the business and build capabilities of potential future benefit for the business and New Zealand- Key Question: What is the likelihood the project will deliver the R&D results?
WEIGHTINGS FOR JUDGEMENT CRITERIA
Callaghan Innovation must apply the following weightings to the above judgement criteria.
Assessment criteria
Weighting (%)
A. Investment Returns 30
B. Pathway to market 30
C. Technical stretch and capability building 20
D. Ability to deliver 20
PARAMETERS SPECIFIC TO THIS INITIATIVE
- Callaghan Innovation must consider the level of co-funding to be provided by the recipient in the case of every grant.
On average across the total amount of Technology New Zealand Targeted Grants, the funding allocated by Callaghan Innovation must not be more than 50% of the proposed cost of research and development.
- In making decisions, Callaghan Innovation must seek to achieve balance across TechNZ Targeted Grant investments in terms of business maturity. To achieve this, Callaghan Innovation may take into account the overall mix of previous, current and planned investments.
- The majority of targeted grants are to encourage or support high risk "stretch" research and development activities.
2. Technology New Zealand Capability Grants
POLICY OBJECTIVES
The objective of this initiative, in addition to the overall objectives of this tool, is to grow New Zealand businesses’ research and development capability by:
- improving their ability to develop new or more sophisticated technologies; and/or
- improving research and development skills and related business management practices.
ELIGIBILITY CRITERIA
- Only a business or a group of businesses are eligible to receive funding via this tool. A business or group of businesses may nominate a representative to receive funding.
- A business must be a person or entity that is in business and resident in New Zealand, and:
- where a group of businesses are applying together, each of the businesses involved must meet these criteria.
- where a business or businesses nominate a representative to receive the funding, the business or businesses must meet these criteria. A nominated representative does not need to meet these criteria.
- Businesses may not be an entity established under or governed by the Education Act 1989, Crown Research Institutes Act 1992, Local Government Act 2002, Local Government (Auckland Council) Act 2009 or the New Zealand Public Health and Disability Act 2000; or an entity that is 50% or more owned by one or more of those types of entities, and:
- where a group of businesses may receive funding together, such groups may not include one or more of the above types of entities; and
- where a nominated representative may receive funding, these entities may, however, act as nominated representatives.
- Where a nominated representative may receive funding, the nominated representative may only receive funding when Callaghan Innovation is satisfied that those funds will ultimately be used or applied by or for the benefit of the nominating business or businesses.
The research, science and technology and related activities funded under this initiative should result in businesses:
- that have not previously undertaken research and development beginning to do so; or
- sustaining on-going research and development activity; or
- improving uptake of external technologies, including international technologies; or
- adopting business practices to support increased or improved research and development activity.
JUDGEMENT CRITERIA
Callaghan Innovation must assess proposals against the following criteria:
Benefits to New Zealand Risk or Success factors
A. Investment returns B. Pathway to market (commercial outcomes)
Key Question: Assuming this project is successful, what are the potential commercial returns to the business and the benefits to New Zealand? Key Question: Assuming this project is successful, what is the likelihood the business will realise the commercial returns?
C. Technical stretch and capability building D. Ability to deliver (R&D outputs)
Key Question: Will this project build capabilities of potential future benefit for the business and New Zealand- Key Question: What is the likelihood the project will deliver the results?
WEIGHTINGS FOR JUDGEMENT CRITERIA
Callaghan Innovation must apply equal weighting to each of the above judgement criteria.
3. Technology Development Grant
POLICY OBJECTIVES
The objective of this initiative, in addition to the overall objectives of this tool, is to improve New Zealand’s economic performance by increasing the total level of the investment made by high technology New Zealand businesses in research and development.
ELIGIBILITY CRITERIA
- Only individual businesses are eligible to receive funding via this tool.
- A business must be a person or entity that is in business and resident in New Zealand.
- Businesses may not be an entity established under or governed by the Education Act 1989, Crown Research Institutes Act 1992, Local Government Act 2002, Local Government (Auckland Council) Act 2009 or the New Zealand Public Health and Disability Act 2000; or an entity that is 50% or more owned by one or more of those types of entities.
Entities that conduct or commission research and development activities mainly for other persons or businesses are ineligible for Technology Development Grant funding, even if they meet the requirement to be "in-business".
In addition to the eligibility criteria above, to be eligible to receive funding a business must:
- have a track record of reasonable spend on research and development activities relative to the revenue of that business (R&D intensity)
- be able to meet due diligence requirements to a standard sufficient to justify a three-year investment from government (including, but not limited to financial viability and suitable management capability)
- have a research and development programme that aligns with the aspirations of the business around growth and is likely to generate wider benefit to New Zealand.
JUDGEMENT CRITERIA
Callaghan Innovation must assess proposals against the following criteria:
A. Business and R&D track record
B. Business and opportunity
Key Question: Does the business have a successful track record in delivering and exploiting R&D- Key Question: Is this an aspiring business with an ambition to grow through investment in R&D?
C. R&D programme D. Benefit to New Zealand
Key Question: How will the R&D programme (and the Grant) contribute to achieving business outcomes- Key Question: What are the likely benefits to New Zealand from the business’ R&D programme?
WEIGHTINGS FOR JUDGEMENT CRITERIA
Callaghan Innovation must apply the following weightings to the above judgement criteria.
Assessment criteria
Weighting (%)
A. Business and R&D track record 40
B. Business and opportunity 15
C. R&D programme 15
D. Benefit to New Zealand 30
PARAMETERS SPECIFIC TO THIS INITIATIVE
This initiative will support a programme of research and development activities.
The Technology Development Grant is equal to 20% of the eligible expenditure of a business’s R&D programme, for three years, up to $2.4 million per business, per year.
Eligible businesses must have an R&D intensity (the ratio of R&D expenditure to revenue) of 3% or more and revenue of at least $3 million per year over the three years.
4. Technology Transfer Voucher
POLICY OBJECTIVES
The objective of this initiative, in addition to the overall objectives of this tool, is to increase the transfer of technology and related knowledge between businesses and accredited publicly funded research organisations by supporting business-led projects that develop better linkages between the two.
ELIGIBILITY CRITERIA
- Only a business or a group of businesses are eligible to receive funding via this tool. A business or group of businesses may nominate a representative to receive funding.
- A business must be a person or entity that is in business and resident in New Zealand, and:
- where a group of businesses are applying together, each of the businesses involved must meet these criteria.
- where a business or businesses nominate a representative to receive the funding, the business or businesses must meet these criteria. A nominated representative does not need to meet these criteria.
- Businesses may not be an entity established under or governed by the Education Act 1989, Crown Research Institutes Act 1992, Local Government Act 2002, Local Government (Auckland Council) Act 2009 or the New Zealand Public Health and Disability Act 2000; or an entity that is 50% or more owned by one or more of those types of entities, and:
- where a group of businesses may receive funding together, such groups may not include one or more of the above types of entities; and
- where a nominated representative may receive funding, these entities may, however, act as nominated representatives.
- Where a nominated representative may receive funding, the nominated representative may only receive funding when Callaghan Innovation is satisfied that those funds will ultimately be used or applied by or for the benefit of the nominating business or businesses.
This initiative will support research and development activities that respond to business needs. The research and development activities will be undertaken by an accredited research organisation.
JUDGEMENT CRITERIA
Callaghan Innovation must assess proposals against the following criteria:
1. Project coherence and credibility 2. Project results in technology transfer
Is the R&D project proposal coherent and credible?
Is the requested size of Voucher credible given the proposed R&D project- Will the project result in the transfer of technology and related knowledge between research organisation and business?
3. Project improves linkages 4. Business R&D capability
Will the project improve linkages between the business and the research organisation- Does the business have limited R&D capability and lack the specific in house research capability to carry out a piece of research?
5. Problem definition and benefit from research organisation 6. Business organisational capability
Does the business have a well defined problem or idea that will benefit from the R&D expertise and services in a research organisation- Does the business have, or have the ability to develop, the organisational capabilities required to manage their R&D relationship with a research organisation and to apply the R&D results in their business?
WEIGHTINGS FOR JUDGEMENT CRITERIA
Callaghan Innovation must apply equal weighting to each of the above judgement criteria.
PARAMETERS SPECIFIC TO THIS INITIATIVE
For the Technology Transfer Voucher, the funding allocated by Callaghan Innovation is not more than 50% of the proposed cost of research and development.
Dated at Wellington this 4th day of February 2013.
HON STEVEN JOYCE, Minister of Science and Innovation.