Speech at the NZBio Annual Excellence Awards

Excellence is something we all aspire to.  What does it actually mean, what does it lead to and how do we benefit?

New Zealanders have a proud record of excellence across many areas-business, culture, medicine, sports, science, education.  And looking at the nation as a whole, one area that stands out - one area where we have demonstrated sustained excellence - is the economic wealth we have built from our natural resources.

Our land-based industries have shaped our economy.  There are many examples of excellence from our primary sector and the associated processing and service activities.These will be well known to many of you. 

Take one recent example: two weeks ago, The Wall Street Journal ran a story on the important methane emission research going on in Palmerston North.  The article talked about the impact the work could have on climate change and quoted a University of Aberdeen scientist who said, that in this field, "there is no question that New Zealanders lead the world".  Every day, New Zealanders - like the scientists in Palmerston North - are excelling in their chosen areas.

And this is where the biotechnology sector comes in.  Biotechnology is a mainstay for our predominantly biological economic base.  Of course biotechnology is not the totality of the primary sector.  Rather it is the applied research that gives the primary sector its world competitive advantage.

Biotechnology enables the development of a good understanding of underlying biological processes.  Genetics and genomics are examples of biotech research where New Zealand has excellent capabilities.

Biotechnology also provides the means to act on this information and produce tailored or high-value products or improved industrial processes. Producing better diagnostics and therapies for people, and developing plants and animals - such as fruit, wood, meat or milk - of higher quality illustrate this point.

New Zealand's excellence in applied biotechnology science extends back more than a century.  However, the past two decades have seen an acceleration of biotechnology, particularly as a deeper understanding of biological systems has been achieved.

It is noteworthy that much of New Zealand's biotechnology developments over the last century were created through collaboration between producers and government science.

The theme for this year's conference, "Bio-Solutions for a Changing World", is very timely, given the current global situation.  New Zealand is well placed to contribute biotechnology-based solutions to global challenges. 

Food and primary products are New Zealand's main contribution to the global economy.  New Zealand dairy products make up around 40 percent of the global trade in dairy.  Our food is considered to be safe, environmentally friendly and healthy. 

While visiting our CRIs recently I was reminded of New Zealand's enviable position from an agricultural perspective.  We have highly productive lands and a mild climate.  We have to use our land for its best use.  We owe that to the world's food consumers.  During my visits, I was advised that "if the land is flat enough to drive over, it should be used to grow food, but if the land is marginal, it should be used for biofuels, new materials and chemicals".  Premium land is best used for agriculture, and slopes used for forestry, biofuels and land stabilisation.

The food industry has many new and innovative products that have been realised through the application of biotechnology.  Biotechnology underpins our ability to stay competitive in the global market place.

New Zealand's primary industries have benefitted significantly from the growth in biotechnology. A small productivity gain in the primary sector translates into significant economic gains.  For example, a three percent per annum annual income growth in a $5 billion sector will add about $800 million over five years.

Biotechnology has what has been termed an "enabling" effect, that is, it adds new technologies to an existing sector and thus grows that sector.

Because of its underpinning nature it can be hard to quantify how biotechnology contributes to the economy.  However, a 2006 report by Lincoln University noted that four biotechnologies alone contribute between $300 million and $400 million in added value per year to the primary sector.  And this didn't take account of some applications that are yet to mature.

There are many examples of New Zealand research, science and technology that are world-leading and important on a global scale.

Scientists at AgResearch's Invermay Campus near Dunedin have developed a genomic tool - called a SNP ("snip") chip [Single Nucleotide Polymorphisms] - which can characterise 50,000 different genetic predispositions in sheep. 

The SNP chip takes the guesswork out of traditional selective breeding methods.  It means that commercially important traits such as disease resistance and carcass yield can be quickly ascertained from blood samples.

New Zealand sheep farmers are likely to be the first adopters of this technology, putting them in a world-leading position, a direct result of New Zealand science.

New Zealand scientists are also excelling in research in other areas, such as health. 

As many of you will be aware, diabetes has been described as a global pandemic, with an estimated 170 million people currently suffering from the disease - a figure that is expected to rise to 380 million by 2025.  

Auckland-based biotechnology company Living Cell Technologies was given conditional approval in October for a clinical trial involving the transplantation of pig cells into diabetes patients.  The cells stimulate insulin production and reduce dependence on injected insulin.  If successful, Living Cell Technologies is set to reap the rewards from the world-wide insulin market, which in 2004 was worth $6.83 billion.

I want to turn now to what the Government is intending to do. We have world-class capability in a wide range of areas including biotechnology, biology, agriculture, horticulture, environmental science, earth science and health research.

One of our particular strengths is our talent for linking and integrating ideas and knowledge, for example between health and agricultural research.  This strength is related to our small population and our need to be generalists and adapters. 

There is, however, potential for the sector to deliver even greater value.

Existing structures and processes across the research, science and technology sector have been in place for some time.  There are some immediate opportunities for the system to be improved.

Creating a simplified, less bureaucratic system will enhance the way it works.  We are taking a longer-term approach too, with an examination of the science sector over the next twelve months.  We will be looking at ways to lower the transaction costs that researchers and research organisations face and ways to strengthen links between RS&T, tertiary education and economic development.

The appointment of a Prime Minister's science advisor will provide focus and expertise in this assessment and simplification of the sector.

Such changes could deliver greater value for money from the Government's investment in these areas.  Importantly, it will also support collaboration between researchers and research organisations.

Collaboration between researchers from different institutions will enhance traditional strengths.  The Centres of Research Excellence are a good illustration of this.  The centres are a mix of research organisations working together collaboratively on agreed programmes.

This morning, AgResearch and Lincoln University announced their intention to study how they can merge. This interesting proposal builds on both their strengths and will look at how combining can make a more effective institution that will better serve the needs of agriculture.

This kind of collaboration is foreshadowed by the National Research Centre for Growth and Development, hosted by the Liggins Institute at the University of Auckland, working with AgResearch and Landcorp. 

Their research is focused on the origins of what makes us who we are - foetal and child health, growth and development.  New technologies and clinical practices emerging from this research have been adopted worldwide for the treatment of neonatal and childhood disorders.

These organisations also aim to advance the understanding of the biology of growth and development, therefore creating better grasses and animals for New Zealand farmers. There is an obvious direct correlation between the health of animals and human health.

This success across the biotechnology sector reflects the hard work and dedication of those involved in all aspects of biotechnology. 

The number of organisations actively involved in biotechnology in New Zealand has increased from 110 organisations in 2004 to 168 in 2007. Over the same period, exports from core biotechnology companies nearly doubled, rising from $53 million to $104 million per year. To match this, 225 biotechnology-related patents were granted to New Zealand organisations in the two years to June 2007.

So despite the clouds on the economic horizon, there is good reason to celebrate success across our biotechnology sector.  What we do need is to continue to attract the now scarcer venture capital funding that is necessary to support the biotechnology sector and to also retain and attract the bright scientists and technologists that enable us to undertake the excellent R&D that excites the former. Success in this will lead to ongoing economic success for New Zealand.