Why the Crown Research Shake-Up is at least a 2-Year Setback

In a year where New Zealand’s productivity crisis is finally getting some airtime, the government has managed to stall one of our most important levers for change: innovation.

The Crown Research Institute (CRI) reforms were supposed to turbocharge commercialisation and collaboration. Instead, we’ve ended up with a bureaucratic limbo. Restructuring science funding in theory might make sense, but not if it pulls the handbrake on actual innovation for two years while the dust settles. The timing couldn’t be worse.

 

David Altana, Head of Growth & Partnerships at SmartSpace.ai & Co-Founder & Host of The Better SMB Podcast. david@altena.solutions

While other nations are doubling down on R&D to fuel economic transformation, New Zealand is in danger of drifting further into irrelevance. We’re already ten years behind our OECD peers on technology adoption.

Now, with innovation policy in flux, the few Kiwi companies ready to lead from the front are left waiting for clarity, funding and alignment.

 

Rob Bull, Director of the New Zealand Lean Academy. rob@nzla.nz

To understand why this matters, we need to be clear on the difference between innovation, R&D and technology adoption.

Innovation is about exploring better ways to lift organisational performance. That a bold business model shift, or solving a customer problem in a novel way. It’s the spark that drives progress.

R&D is what fuels that spark. It’s the deliberate investment of time, moneyand expertise to develop the ideas that underpin innovation. It can live inside universities, CRIs, or businesses themselves, but without it, our ideas run shallow.

Technology adoption is how we bring it all to life. It’s the moment we take those R&D outcomes or global innovations and embed them into how we actually work.

This is where New Zealand, historically, has struggled the most.

These three elements are tightly linked. Undermine one, and you weaken the others. By freezing CRIs mid-stride, we’ve taken an axe to the very structure designed to turn research into real-world value. Not just for startups or tech firms, but for manufacturers, farmers, exporters and service providers across the economy.

And here’s the kicker: innovation in New Zealand has never really been about the CRIs.

We’ve Built a Culture of Pilots and Prototypes, Not Progress

Talk to a few manufacturers and you’ll hear a similar story about  innovation…

“We tried that, once”… “We ran a pilot with Callaghan”… “We had a go at Lean, but the consultant disappeared.”

Innovation in Aotearoa has been reduced to sporadic sprints and report- writing exercises, not systems of progress. The CRIs were meant to bridge the gap between research and reality, but their incentive structure has kept them anchored in academia, not industry.

As a result, we’ve failed to build the capability infrastructure to turn one- off pilots into repeatable performance. Without internal champions, frontline buy-in, or leadership systems that support risk and experimentation, even the best ideas fizzle out.

The shake-up could have been a circuit breaker. But instead of evolving with urgency, we’ve paused for process.

Make no mistake, process is not progress.

 A Nation of Tinkerers Can’t Afford to Wait

New Zealand is full of smart people solving hard problems.

But we don’t scale. We don’t commercialise fast enough and we rarely build with the world in mind.

The private sector is waiting for signals, on IP policy, tech transfer pathways and whether there will be meaningful support for real innovation, not just pet projects for PR points.

We should be throwing everything we’ve got behind enabling manufacturers to test, adopt and scale next-gen capability – AI, digital twins, advanced materials, robotics, 3D printing, sustainability-led design.

Instead, we’re shuffling chairs in Wellington.

The risk? Our best ideas die in the lab. Our best people head offshore and our biggest opportunities get picked up by someone else.

In the time it takes us to reorganise our innovation bureaucracy, other countries will launch, fund and scale multiple industrial strategies. This isn’t just about falling behind, it’s about opting out of the race entirely.

 Who’s Really Responsible?

 Let’s be honest: blaming the government is easy. But this isn’t just about policy. This is about culture, leadership and the expectations we set in our own organisations.

Too many Kiwi businesses are still doing the same thing they did ten years ago and wondering why margins are tight. We’ve normalised a culture where “good enough for NZ” is the benchmark. Until that changes, even the best R&D system in the world won’t save us.

Maybe we have made innovation sound more complicated than it needs to be?

When it comes to innovation, the word itself has become bloated. For many business leaders, innovation now feels like something that belongs in a lab or an awards submission not on the factory floor, or in a team meeting, or at the whiteboard sketching out how to serve customers better.

But it belongs there most of all.

We’ve wrapped it in jargon. Split it into funding categories. Framed it like a research project when, for most businesses, it should start with a single question: Is there a better way to do this?

We don’t need permission to innovate. We need intent.

So, What Now?

Let’s stop waiting for the system to catch up. Let’s simplify innovation by making it accessible and understandable.

Start with your next product. Your next customer problem. Your next process.

Just look at the firms already embedding digital tools to shorten lead times, personalise products, or reduce waste. They didn’t wait for a policy announcement, they acted with purpose, and it’s paying off.

Innovation doesn’t have to be high-tech. But it does have to be deliberate. The organisations that win won’t be the ones who waited for the funding round. They’ll be the ones who generated momentum while others were standing still.

​Because here’s the truth: if you’re waiting for what’s coming with the Public Research Organisations to save your business, you’ve already lost the plot.

To innovate is a leadership choice. Choose it now.

Ready. Set. Go.

Let’s uncover the better way to do this.

 

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