R&D money for IT firms for the taking

Fancy a load of "free money" for filling in a few forms? If you are an IT business with an R&D project needing some help, don't be shocked: the government is willing to help.

Fancy a load of “free money” for filling in a few forms?

If you are an IT business with an R&D project needing some help, don’t be shocked: the government is willing to help.

It has been reorganising and announcing new programmes to drive us toward a “knowledge economy” and help “close the gaps” between New Zealand and elsewhere. Just over a week ago it announced its e-government strategy, plus a support agency backed by cash awards to help New Zealand incubators.

Last week, Computerworld reported Auckland-based Focus Software received $224,000 from Technology New Zealand to develop its Propella accounting package. This week, we report grants of $580,000 to Pulsedata, $305,000 to SouthFresh and $80,000 to Camsensor.

Technology New Zealand is a part of the Foundation for Research, Science and Technology that aims to help businesses develop and adopt new technology. TechNZ has an annual budget of $36.5 million and a range of programmes. Between last July and January 2001 some 142 projects received a total of $12.5 million under its Technology for Business Grow scheme for R&D projects.

“Typically, this will help companies gain entry into new high-value markets," says Tony Hadfield of the FRST. "Ideally where this leads to high margin products, processes or services and also increase the technical capability of the business."

Since its September launch, Tech NZ’s Grants for Private Sector Research and Development Scheme has notched up 143 grants approved to a total of $8.6 million, with more than $12 million expected to have been awarded by June. It offers to pay a third of a firm’s increase in R&D up to a maximum of $100,000.

“We are investing in the technical and technological risk-takers and applicants must clearly identify the technology gap they are addressing," says fund manager John Gibson. "There needs to be a clear technical risk or uncertainty, a measurable outcome and a methodological resolution of that uncertainty.”

This TechNZ scheme is the first to offer applications online and Gibson says the process is fast and criteria simple: “Is it business? Is it R&D? Is there a market? Is it feasible?”

Other TechNZ programmes include:

  • Technology Acquisition Investigation offers up to $25,000 to investigate or test potential technology solutions for development objectives
  • Technical Feasibility Projects also offer up to $25,000 to investigate short-term experimental investigations of the feasibility of a development plan
  • Product or Process Development Projects – innovative developments and technical problem solving for new products and processes, including secondment funding for graduates to work on a project and matching finance for R&D costs.
  • Strategic Development Projects - students and graduates to complete projects in business.
  • Enterprise Scholarships and Enterprise Skills/Technologies Scholarships - provide funding for individuals to undertake research for training that will benefit enterprises. These scholarships are a 50/50 funding arrangement between government and enterprises.
  • Technology for Industry Fellowship scheme - helps small and medium-sized firms carry our R&D with universities and colleges.
  • Some $2.85 million exists in the New Economy Research Fund to develop “cutting edge technology” in “new wealth-creating enterprises, medical and health industries, advanced biological enterprises and information and communication industries.”

Other schemes exist for identifying opportunities to use technologies and appointing consultants to look at the possibilities.

There are more schemes than you can shake a stick at, which probably explains some of the criticisms from business about time spent applying for grants, when it would prefer a simpler and more generous R&D tax write-off regime, as happens in Australia and elsewhere.

In addition to TechNZ's grants, Pete Hodgson, the Minister for Small Business, has announced a $680,000 Incubator Support Programme to help businesses share their expertise and advice and help each other grow. This programme also includes $550,000 set aside for the first Incubator Awards for businesses who take a leading role in adopting best practices and processes.

Incubators already exist at Unitec, Massey University in Albany, Victoria University, Otago University and in Canterbury.

Hodgson also told the launch that a proposed Crown Seed Capital Fund would help the type of small firms likely to emerge from a business incubator. “We’re setting out deliberately as a government to build our capacity in our innovation system, our business sector, our education and training systems. At the same time we’re looking for barriers to growth and collaboration and then looking for ways through or around them,” he says.

Whether this is enough to help business, remains to be seen. But the money appears to be there if companies want to apply for it.

Greenwood is a Computerworld journalist. Send email to Darren Greenwood. Send letters for publication to Computerworld Letters.

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