Universities critical for research and innovation journey
The Commission supports the government’s current review of New Zealand’s RSI system to give greater emphasis to the impact of research.
Recent reporting may have given the impression that the Productivity Commission undervalues the role of university research and researchers. Several media outlets carried the headline that the Commission’s 2017 inquiry into tertiary education entirely ignored the research role of universities, however, this was because the Terms of Reference from the Government for that inquiry overwhelmingly focused on the education function of tertiary institutions and not their research function.
Far from undervaluing them, the Commission believes universities are a vital part of modern society for their research as well as being an important part of Aotearoa’s network of education providers. They are a critical part of New Zealand’s research and innovation journey, educating the next generation of citizens to live an enriched life and developing a skilled workforce that will help lift productivity and improve the wellbeing of communities.
As providers of fundamental research in New Zealand, universities play a prominent role in the national research system and are in a pivotal position to contribute to innovation. Even so, the current array of research organisations, including universities, is not reaching its potential or what the country needs to solve the big challenges - be they social, environmental, or economic. For this reason, the Commission strongly supports a central tenet of the Government’s current review of Aotearoa New Zealand’s research, science, and innovation system to give greater emphasis to the impact of research and not just its excellence.
The Productivity Commission’s 2017 inquiry, New Models of Tertiary Education took a whole-of-system perspective, to consider new models of tertiary education. The inquiry report assessed how well New Zealand’s tertiary education system is set up to respond to emerging trends in technology, tuition costs, the internationalisation of education, changes in the structure of the population, and the demand for skills in the economy and society. The Terms of Reference for the Tertiary Education inquiry asked the Commission to consider how these trends may affect the supply and demand for tertiary education, and what changes in business and delivery models in the tertiary sector would be desirable. The Terms of Reference emphasised tertiary education, not the research side per se, as important as that is.
The Commission’s 2021 inquiry New Zealand Firms: Reaching for the Frontier put a huge emphasis on the role of research and internal and external researchers to universities and how they could and should be making a much greater contribution to building and maintaining thriving innovation ecosystems. These ecosystems should be the foundation of focused innovation areas in the economy that are world-class in their quality and international competitiveness.
Innovation ecosystems need workers with the right skills, entrepreneurs to build strong businesses, international links, researchers, education and training providers, and investors with deep knowledge and understanding of the area. They also need enabling infrastructure and supportive regulations.
The evidence considered by the Commission in the Frontier Firms inquiry shows that New Zealand’s innovation ecosystems are not currently working well for actual and potential frontier firms. The links between firms and public research institutions are mostly poor, and research focuses too exclusively on “science excellence” and not enough on impact and responding to industry needs.
A central recommendation to the Government was to take deliberate policy steps to choose a small number of areas of economic focus and build excellent innovation ecosystems in them. This process must be a true partnership of government with industry (firms and workers), researchers, Māori, and educators. Universities are a critical part of building these innovation ecosystems (in both skills and research) so they will be important participants in this journey.
The Commission’s follow-on review of the Government’s progress in policy settings, workstreams, and initiatives following the Frontier Firms inquiry will be released in early May 2023.