Engineering: issues, challenges and opportunities for development ...

AN OVERVIEW OF ENGINEERINGto a determination to make the provision of a service subjectto a written agreement or contract, whether the service wasprovided by an operational department or by a separate government-ownedor private entity. Based on these principles,the State Owned Enterprises (SOEs) Act (1986) transformedall the trading departments of government (electricity, postal,telecommunications, railways etc.) into companies known asSOEs.When applied to research, the ‘user pays’ principle wasaccompanied by substantial reductions in government RS&Tfunding, and the DSIR and MAF had to seek commercialfunds to maintain staff levels. This led to an increase in privatesector funding of science agencies from under 10 percent in 1984–85 to over 27 per cent in 1990–91, but concerngrew that as research organizations sought to maximize theirincome, duplication and overlap was occurring. There wasconcern too for the survival of the research associations whowere now dependent on funding allocated by the DSIR. TheDSIR itself introduced some internal contestability by developinga series of science activity areas for funding allocationand reporting.The government received a working party report The Key toProsperity in 1986 and set up a Science and Technology AdvisoryCommittee (STAC). In 1988 STAC recommended thatpolicy development and fund allocation for RS&T be separated,that funding to all research organizations be made fullycontestable over five years, that research agencies be givenappropriate commercial powers and further that all governmentRS&T funding for science and engineering, health sciencesand social sciences be allocated through a single agency.Having all research organizations bid into the same pool wouldallow universities to play a greater role in providing researchin New Zealand and would, it was argued, bring the differentresearch providers closer together.A bi-partisan political agreement was reached, largely in favourof the STAC recommendations. In April 1989 the governmentcreated a Cabinet portfolio for Research, Science & Technology,a Cabinet committee with responsibility for RS&T, a Ministryof RS&T (MoRST) to provide policy advice, and a Foundationfor Research, Science & Technology (FRST) to purchase RS&T.Responsibility for conducting periodic in-depth reviews of sciencewas initially placed with MoRST but was later reallocatedto FRST. A significant change from the STAC recommendationswas the establishment of a Health Research Council thatwould fund health research separately from FRST rather thanas a part of the Foundation.As an independent agency, FRST had a board, with a chair andmembers appointed by the government. The board appointeda chief executive who recruited the agency’s staff. The government’sbudget set the overall level of funding for each yearagainst the identified priority areas for funding on advicefrom MoRST after consultation with stakeholders, whichwere conveyed to FRST every year by the Minister. This createda strategy-driven approach to RS&T direction, which wasa significant change from the earlier piecemeal method. Allfunding was to be on the basis of contestable bids for the fullresearch cost, rather than for marginal funding, to avoid crosssubsidizationand to ensure competitive neutrality.During 1990 there was considerable debate over key aspectsof how the new system would work. Some of the researchcarried out by government departments was to assist themin achieving their own operational goals. A Cabinet decisionwas required to establish which research fell into that categoryand should therefore be funded from departmental appropriations,and which was ‘public good’ research, and shouldtherefore be administered by FRST. The term ‘public good’required clarification. It was used by government policy analyststo refer to a consumer commodity while scientists saw itas research that would have positive outcome for the public.Analysts asked why government should fund the direct beneficiariesof research, and the public wanted to know why governmentwould consider funding research that was not goodfor the public. All of this created some difficulties of communicationbetween stakeholders. These issues, along with thoseassociated with ownership of intellectual property and prioritysetting and also the continued role of the DSIR and otherresearch-focused agencies, occupied the attention of the RS&TCabinet Committee during 1990.The election of a national government in late 1990 continuedthe changes as the wave of transformation moved frominvestment in RS&T to its provision. Early in their term ofoffice a decision was made to restructure the existing DSIR,Ministry of Agriculture and Fisheries and other governmentscience agencies into a series of Crown Research Institutes(CRIs). A task group was appointed to identify the number,size and specific roles of the CRIs by 30 June 1991. In accordancewith the SOE model, CRIs were to be established as corporatebodies separate from the government under their ownlegislation (the Crown Research Institutes Act 1992). Governmentownership of the CRIs would ensure that RS&T capabilityremained in New Zealand, that science outputs aligned togovernment outcomes would be delivered to required quality,relevance, timeliness and quality constraints. In response, thetask group proposed that each CRI should be broadly basedon a productive sector or set of natural resources, be verticallyintegrated, have a clear focus that was not in conflictwith other CRIs, be nationally based with regional centres, andhave no minimum or maximum size. External purchasing wasto be important, with 60 to 90 per cent of CRI research to bepurchased by FRST, with the remainder being purchased byprivate companies, government departments or other fundingagencies. There was a debate on whether the CRIs should179