Paul Callaghan – ‘Wool to Weta’

Paul Callaghan, NZs leading physicist has published a book about NZs attempt to climbing the OECD rankings. Despite not being a big paperback reader, this was definitely up my alley.

I have heard the ‘slipping in OECD rankings’ story several times from many angles in the business community (David Skilling, Steven Carden) and UoA so I was  quite interested to see it from a scientist’s perspective. And on that note its great to see a scientist crossing into the realm of business and making the connections between the two i.e. science –> technology/ knowledge –> business $$.

For those not familiar with our economic situation ( exclusive to the recession). We currently have commodity focused export economy which has worked in the past but now as the price for them has fallen so has our GDP in comparison with other similar countries. These other countries have invested strongly in R&D/ technology to create economies based on knowledge rather than exploitation of primary industries (and tourism for NZ). NZ continues to focus on the latter as the backbone of our nations wealth. John Key’s current catch phrase of ‘low productivity’ also fits into this. The long term consequence of this type of economy going forward is that it becomes more expensive to live as we rely heavily on imports e.g. pharmaceuticals.

Rather than providing a review of the book, I’d rather speak on thought-provoking issues that were raised in the book. Some where I agree with Paul and some where I do not.

The book is essentially a collection interviews with key prominent NZ achievers ranging from business folk to scientists discussing around the topic of New Zealand’s economic future. Paul subtly advocates that ‘physical sciences may be our best hope’ for our new economy, an area which he has pioneered in NZ.


Being a ‘biotechy’ I was interested to see Paul’s argument surrounding government’s decision to  invest in biotechnology as a key industry. While I do believe we need to invest in this area he does make some valid points that I tend to agree with. Particularly the governments move to fund pre-determined areas/ sectors rather than taking an approach that rewards proposals with solid science research mixed with clear wealth generating opportunities down the line.  We cant take a narrow focus because we don’t know where our capabilities lay, and the size of the task ahead is unlikely to be fuelled by one or a few industries. rather a monumental shift in the performance and growth of our technology-led companies.

I do however believe we have a potential capability in biotechnology. This is due to our strong background in the sciences that underpin this technology. In terms of how this translates into commercial successes, we haven’t had the experience with these type of products outside the food and agriculture area. And I agree that assumption that our successes in the agriculture/ farming business  will transfer into biotech is a tall ask. This is especially true when you start to consider the industry’s complexity: the diversity of business models, ranges of different products/ applications, regulatory requirements, routes to market and funding requirements. Despite this void I don’t believe we have had much more success in other high tech areas/industries and as a result our nationals wealth is under threat. Obviously there are several success stories as Paul points out but not enough to conclude that we have a strong capability in the corresponding industries (i.e. the physical technologies).

Because NZ doesn’t really have a validated ‘proven capability’ in a export led, high tech, non commodity industry setting we fund based on our proven strengths in scientific/tech research fields where we do clearly have a impressive background of technologists/ scientists. For example in biosciences we have Peter Gluckman, Bill Wilson, Jim Watson, Garth Cooper, Richard Faull, Ted Baker, and David Parry.

Because investment in the bioscience/tech bucket has been more recently tied to applied research supported by developments in building our tech commercialisation capability ( TTOs, Incubators, Industry:University relationships, Entrepreneurs in residence, NZTE and FRST programmes e.g. Global expert and Beachheads) it has meant that we are building capabilities in a multitude of fields include biotechnology.

Despite these predefined funding buckets from the 2002 GIF (creative design, ICT, biotechnology) it looks like we are now seeing a deviation from the original ‘plan of attack’. Following the 2008 stakeholder survey, FRST is in a process of restructuring its funding – do these buckets still apply now?  More so NZTE’s InvestmentNZ industry portfolio advertises specialised manufacturing (including physical technologies), food and beverage, wood processing in addition to the three former buckets as key NZ industries. Lets hope this is part of the new strategy as opposed to a misalignment of government bodies.

Another thing to consider is the trend towards  inter-disciplinary research, a place where a lot of new opportunities are being discovered for commercial products & services. For example  physical technologies with applications in biosciences ( quantum dots as bioscience research tools). What this means it is that it becomes hard to actually define what sort bucket each project falls in to and conversely opens up multiple avenues of funding for a project.

Lastly Paul makes a comment ‘little mindedness, parochialism, tendency to divide among ourselves and be suspicious of each other’ which touches on a previous post  of mine on the connectivity and co-operation of groups/ people within networks in NZ (especially government departments and organisations). We have to aim to create a NZ INC – an aligned/unified effort to grow our economy.

It is also great to see Paul instilling a culture of entrepreneurship in his own grad students at the MacDiarmid Institute.

Wool to Weta



Last Minute Notes

The books most sobering fact ‘Samsung produces 3/4 of our GDP with 123,000 employees’

Paul also outlined some great criteria of what these new economy companies should look like:

  • no new resources to start except brains
  • practically no land
  • no significant transport costs or weightless
  • little energy and low greenhouse gas emissions
  • high product values
  • scalable size


Overall the book is a great read that I highly recommend especially if you are not up to date on our current economic situation. While Paul does bias his questions in patches around a push for physical sciences at the expense of pharma/ biotech the responses of the interviewees are genuine and insightful.

Those that read this book should ask themselves what are you doing to grow NZ’s economy? Hopefully I don’t see another book like this, rather one about what we have DONE to address this, showing that we are on track to a more prosperous NZ.


Graeme @


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