IT firms receive FRST research and development grants

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Foundation for Research, Science and Technology gives grants

By Computerworld Staff | Auckland | Friday, 10 December, 2010 | 7 Comments

Jade Software, Gentrack, Weta Digital, Zeacom and Endace are among the recipients of research and development grants announced today from the Foundation for Research, Science and Technology’s Technology Development Grant programme.

Research, Science and Technology Minister Wayne Mapp announced the grants in Christchuch, and 26 companies will receive assistance. The total sum of the grants across all recipient companies is $92 million.

Mapp noted at the announcement: “Increasing exports is an essential part of the Government’s economic strategy.

“These grants demonstrate the Government’s commitment to invest in businesses that have the ambition to grow through research and development.”

Jade’s grant is $3.2 million, Gentrack’s is $1.4 million, Weta Digital’s is $7.2 million, Zeacom’s is $2.1 million and Endace’s is $6.7 million.

The other 21 companies to receive grants include Rakon, Fisher and Paykel healthcare and Tait Electronics.

Endace CEO Mike Riley says in a statement acknowledging the grant: “We’re absolutely delighted to have received this grant and would like to recognise the support the New Zealand government has given Endace in the past and continues to provide today.

“Research and development is the lifeblood of Endace and we’re thrilled to see the government recognising and supporting organisations that have proven track records in creating and monetising Kiwi intellectual property.”

Comments

Grant & TAX For every dollar they get they are having to add another 75% of their own money - the amount given is probably not even going to cover the additional tax they will now all need to pay as they have flagged to the IRD that they are building a product which HAS to be amortised over 3-5 years as they presented this in their Grant application as the period required for the NEW concept.
So in all instead of expensing in 1 year they will now be creating a product which the government will claw back what they give each year in TAX.
So although it may look good - it is never free and the consequences of PUBLIC facing grant can have a cost that some of these businesses wouldn't be aware of.
Posted by IRD TAX at 13:22:01 on December 14, 2010

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Thanks guys As much as I appreciate what Weta Digital have done and continues to do (as an example, not picking on them specifically), $7.2M could have been used to give $100K to 72 other small IT companies around NZ, and would probably have reaped far greater long term rewards. I do not understand how successful business like WD, Jade and the others need so much more Govt funding, when the small IT companies (of which one is mine) struggle with how to fund R&D for ideas that we KNOW will return a significant profit in the long term. Disappointing.
Posted by Allan at 12:17:25 on December 13, 2010

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Irony The other comments are spot on. How ironic that previous the set-up under Labour was actually more conducive to SMEs growing their export capabilities.
Jade and Endace in particular - You've got to be kidding!

Posted by Anonymous at 11:50:05 on December 13, 2010

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Well Done Great to see so many Christchurch based companies getting some recognistion.
Posted by Anonymous at 11:45:05 on December 13, 2010

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Ridiculous Having just missed out on a grant from the same people due to apparent lack of funding, I am outraged.

As I am aware at least 50 Wellington companies were declined by FoRST for funding to hire a summer intern last month, these plaements were generating real business, creating real employment and giving our best and most eager students valuable real life experience, not to mention giving the companies some much needed resource... And here we go ahead giving the money to the big boys.

I just can't understand an economic growth strategy that only supports businesses which are already flourishing.

Posted by Anonymous at 11:43:34 on December 13, 2010

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Government not qualified to pick winners I don't think there's anyone in the government who's qualified to pick winners in the marketplace. If they were qualified, they'd most likely be working in industry, not government.

What the gov't can and should do is to encourage endemic (i.e. NZ owned) small and medium IT businesses by structuring RFPs to focus on their offerings.

Because the NZ gov't apparently spends 65% of the NZ annual IT bill, almost entirely on multinational rather than endemic IT businesses (software licenses, services, and consulting) - and are forming preferential deals to ensure things stay that way - it's no wonder why many kiwi IT businesses remain small and struggling on the world stage. They're not even getting support at home.

To that, I simply ask this question: Government, what have you done for our "knowledge economy" lately?

PS despite it's kiwi start, Jade is not NZ owned any more. I understand that a majority of its shares are held by overseas interests. I haven't investigated the others. Anyone else care to shed light on their shareholding?
Posted by Dave Lane at 9:33:07 on December 13, 2010

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Nice to see Nice to see our tax money going to so many profitable and mostly foreign owned companies. It is a bit like rewarding telecom for years of pillage by taxpayer funding of UFB. How about giving real money to start ups and emerging companies, if these large and supposedly successful companies still require government money then they are simply failing and should find something profitable to do. [This comment has been moderated]
Posted by Anonymous at 8:23:47 on December 13, 2010

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