1. Brilliant Ideas, Missing Engine
How Aotearoa Keeps Stalling on Innovation
Picture a researcher at a New Zealand university who has spent ten years chasing a breakthrough. The prototype finally works. The science is solid, the global need is obvious and a couple of investors are interested. Then everything slows to treacle. No one is quite sure who owns the IP. The paperwork takes months. The researcher is told to keep publishing but also to think about starting a company. The investors drift away. The idea quietly slides back into the filing cabinet.
That story is not about lazy people or a lack of talent. It is about a missing engine in the middle of our system.
For a long time we have told ourselves that Aotearoa punches above its weight in science. There is real truth in that. Our universities and public research organisations produce strong work and we have plenty of curious, capable people. We can point to genuine bright spots - med-tech and deep-tech ventures around UniServices, collaborative projects supported by KiwiNet, stubborn founders who have built global businesses from small labs.
Yet if we zoom out, a pattern keeps showing up. Compared with other advanced economies we invest less in research and development, we create fewer high-growth firms from our public science base and we still lean heavily on cows, logs and tourists to pay the national bills. The problem is not the ideas. It is what happens to those ideas after they are born.
When you look under the hood, the same weaknesses appear again and again.
First, our policy settings have been stop–start for decades. Successive governments have restructured the science system, launched fresh funds, re-badged agencies and then reorganised them again. Each change arrives with good intentions and clever diagrams. Each one also scatters relationships and institutional memory. People who know how to move an idea from lab to market spend too much time re-explaining their role and rebuilding trust.
Second, we have under-funded the people whose job is to bridge the gap. Tech transfer offices, commercialisation teams and entrepreneurship educators are still treated, in many places, as overheads rather than core infrastructure. Their work is slow, relational and sometimes messy. Done well, it produces better deals, more confident founders and more resilient companies. Done thinly, it frustrates everyone and quietly reinforces the myth that commercialisation does not work here.
Third, incentives do not always line up with the outcomes we say we care about. Researchers are promoted for papers, citations and grants, not for solving real-world problems or co-founding ventures. Universities are under pressure to generate revenue but have limited freedom to invest in long-term capability. Governments want visible results inside an electoral cycle. Deep-tech ventures often need a decade or more to mature.
On top of that, only a sliver of our science and innovation spending reaches the messy middle between IP and an investible company. Less than one percent of the public science budget goes directly into commercialisation capability. It is like building a beautiful highway network and then refusing to fund on-ramps, road signs or driving lessons. The traffic jams at the same points every day and we act surprised.
Fourth, we are a small country that has not fully leaned into clustering. Other small advanced economies deliberately build dense hubs in life sciences, advanced manufacturing, clean-tech and digital. They bring researchers, firms, investors and talent into the same physical and virtual spaces. We have bright spots – Wellington's screen sector, parts of agritech, Auckland's med-tech ecosystem – but not yet the depth or coordination that turns bright spots into global magnets.
Most of all, the impact of these weaknesses is deeply human.
Researchers who want their work to make a difference are pulled between the joy of discovery and the grind of forming a company. Early-career scientists ask themselves whether there is a future for them here or whether they need to head offshore to find a clearer pathway from lab to impact. Commercialisation managers burn out doing three jobs at once. Founders who do make it through often talk about how lonely and fragile those early stages felt.
None of this is about blaming individuals. It is about a system that has not yet decided, in a consistent way, that turning public research into public benefit is as important as generating the research in the first place.
The hopeful part is that we do know what better can look like, because we can see it in miniature at home and in full colour overseas. New Zealand's own spin-out successes show that when you surround researchers with the right people – IP specialists, deal-makers, experienced founders, patient investors – they can build companies that export ideas instead of emissions.
The real question for us is simple and personal. Do we want our clever people to have to leave the country, or give up on their ideas, to see them reach the world? Or are we willing to build the engine that lets more of those ideas turn into jobs, companies and solutions here in Aotearoa?
How we answer that question will say a lot about the kind of country we intend to be.
If you’d like to share your thoughts or discuss further, feel free to reach out. I’d love to hear from you. +64 275 665 682 john.luxton@regenerationhq.co.nz www.regenerationhq.co.nz/contact