Griffin on Tech: An inauguration, a demotion and an emerging plan for advanced tech

What a week - it started with the grinning faces of the world’s most powerful tech billionaires sitting in the front row behind Donald Trump at his inauguration and ended with plans for a new high-tech research organisation to be created in NZ.

Along the way, we saw Trump announce a funding investment in AI with Oracle, OpenAI and their financial backer Softbank, which could see up to US$500 billion invested in AI infrastructure, very much a move to counter China’s own massive AI splurge. 

Today, Dr Shane Reti, who lost his health portfolio in a cabinet shake-up last weekend and has been demoted in National’s ranks, takes up the science, innovation, and technology portfolio vacated by Judith Collins.

As I wrote in BusinessDesk this week, Reti was respected in the health sector even if he didn’t have the skillset and political instincts to ram through massive change quickly. But the loss of Collins from the portfolio is definitely a blow for the tech sector. For the last year, Collins had been doing the rounds getting to know the issues and the personalities in her “beloved” portfolio area. A lot of that effort now goes to waste. A high-ranking advocate for tech now has bigger fish to fry.

However, Collins does retain her digitising government portfolio which gels well with her big new role as minister for the public sector. If there really is an agenda to improve Kiwis’ access to government services via digital platforms and technologies, she now has the levers to pull to drive change across the sector.

Change coming for universities

Reti also becomes the minister for universities, a new role that reflects the attention that needs to be paid to the sector as it grapples with its own challenges. The University Advisory Group, chaired by Sir Peter Gluckman, has been advising the cabinet on the future of the universities, and the Government will reveal next month which recommendations it will run with. 

Part of the group’s remit was to suggest how the universities can better deliver the skilled graduates the economy needs. If realistic plans to improve the domestic tech skills pipeline don’t feature prominently that work won’t have hit the mark.

But it was yesterday’s sweeping changes for the research sector, also overseen by Sir Peter in his role as chair of the Science Sector Advisory Group, that got everyone talking. The clear priority identified by the Government is to use science, innovation and technology to stimulate economic growth.

Callaghan Innovation is being disestablished, which via the R&D Tax Incentive, grants, funding of incubators and through its scientific labs, do extensive work supporting the tech sector. A question mark now hangs over the 300 staff who work there and who do incredible work.

Few in the sector will be surprised by that move, or by plans to merge the seven existing Crown Research Institutes into three public research organisations (PROs) and create a new one dedicated to advanced technologies including AI, quantum computing, and synthetic biology.

On LinkedIn yesterday I posted my initial thoughts on the proposed changes:

Crucially, this announcement didn’t touch on funding. That will apparently be dealt with in a second report and set of recommendations. The revamp of the science sector will cost money and creating a new high-tech PRO will need an injection of new funding. So there was much scepticism yesterday that any of these changes mean anything unless there is some additionality to boost an underfunded sector.

Having said that, the new PRO is an exciting opportunity for us to finally have a dedicated focus on some of the technologies that are emerging as the most impactful in the 21st century, AI and gene editing among them.

Butour capability and talent base in both areas, not to mention quantum, is thin to say the least. For a PRO to offer meaningful input, in the ways that AgResearch, Plant & Food and Landcare Research have for years contributed science to improve how our agricultural sector operates, will be a tall ask.

We’ll need to recruit talent from overseas and ensure the PRO works effectively with universities and businesses, where the AI capability we do have exists.

The hunt for investment dollars

A new agency Invest NZ will be set up, initially within New Zealand Trade & Enterprise and then as a separate Crown entity to try and attract more foreign investment into R&D and science and tech ventures in New Zealand. Again, that will be a tough proposition given how aggressively other nations have courted that investment, creating industrial parks and offering tax breaks to lure multinationals to their shores. 

All of this will play out in the next few years in a rapidly changing geopolitical landscape coloured by Trump’s America First mantra. That has implications for how we use American technology, and our trading relationship with the US, which is a key market for our software providers.

Yesterday’s announcement at least laid out a long overdue plan for the future, including creating a science and tech council to advise the Prime Minister. Efforts like this in the past, such as the ill-fated digital council, failed to have impact. However, designed as an interface between the research sector and politics, this one has more of a chance of succeeding.

None of these changes will result in quick gains for the government. They simply lay the groundwork for us to catch up with other countries, including Australia, who invested in advanced technology capability much earlier. This is a once in 30-year opportunity to reset our ambitions. But it could take at least a decade to pay off.