Challenge to opportunity - Statement of Performance Expectations 1 July 2020 - 30 June 2021
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G.49 Challenge to opportunity Statement of Performance Expectations 1 July 2020 – 30 June 2021 1
Contents
1.0 Welcome to Callaghan Innovation.........................................................................................3
2.0 COVID-19 recovery will dominate 2020/21.........................................................................5
3.0 Our Services.................................................................................................................................9
4.0 Our strategy and focus areas for 2020/21.......................................................................... 11
5.0 Measuring our performance.................................................................................................. 17
6.0 Statement of Performance Expectations............................................................................19
7.0 Budget and financial statements...........................................................................................35
8.0 Budget 2021 Financial Assumptions.....................................................................................37
9.0 Statement of Accounting Policies........................................................................................ 43
2
Statement of Performance Expectations
1.0
1.0
Welc
Welcome to
o
Calla me tInnovation
Callaghan
ghan o
Innov
Who are we? - row young science and technical
G Our partners
ation
Callaghan Innovation is the Government’s
innovation agency. Our namesake Sir Paul
Callaghan once said, “One hundred inspired
talent. The Wonder Programme inspires
young children through opportunities
in science and technology, and
With over 200 players in the innovation
ecosystem in New Zealand, Callaghan
Innovation works with these organisations
entrepreneurs can turn this country around. we administer the Student Grants to support and connect firms to the wide
That is the challenge for all of us”. programme which facilitates technical range of expertise they offer. We also
talent into firms. work with NZ Inc partners including New
Our vision Zealand Trade and Enterprise (NZTE),
Inspired by Sir Paul Callaghan, our vision How we are funded the Ministry of Business, Innovation and
is ‘New Zealand is a place where talent Callaghan Innovation is funded through Employment (MBIE) and the Ministry of
wants to live’. Vote Business, Science and Innovation. In Primary Industries (MPI).
2020/21 our operations appropriation will
Our purpose be $116.1m, and we administer a further How we measure performance
Callaghan Innovation uses its expertise, $188.8m for R&D grants. We also anticipate Callaghan Innovation’s performance
influence and mana to support business smaller than usual commercial revenue of measures are set out in our performance
research and development, accelerate $18.4m due to impacts of COVID-19 on our measurement framework which aligns
commercialisation and empower commercial customer base. to the delivery of our five-year strategy.
New Zealand’s innovators. This framework covers our organisational
Our customers performance, our impact for firms and our
What we do To focus our efforts, we work to identify innovation impact on New Zealand.
Callaghan Innovation works to: innovators and organisations capable of
delivering the greatest innovation impact Our governance
- Increase New Zealand business and the highest chance of success. We The Minister of Research, Science and
investment in R&D by challenging work with: Innovation is responsible for Callaghan
companies to create / improve R&D
1. F
irms that are innovating using Innovation. Our Board provides governance
programmes, by providing funding
technology and need access and over our strategy and performance with
(R&D Tax Incentive and grants) as well
support to our services and others five subcommittees supporting the Board
as technical expertise and equipment to
across the innovation ecosystem. in their obligations under the Callaghan
support companies’ R&D activity.
Innovation Act 2012 and the Crown Entities
- row New Zealand’s innovation
G 2. F
irms that require our technical service Act 2004 (Grants, Audit and Risk, Health
economy by supporting ideas support offered via our Research and and Safety, Gracefield Redevelopment
to commercialise faster through Technical Services team. Governance Group, and People, Culture
investment in incubators / accelerators, and Diversity).
skills programmes and connecting our
firms to experts across the innovation
ecosystem.
3 4
Statement of Performance Expectations
2.0
2.0
COV
COVID-19 recovery will
We are working hard to manage those This year we will continue our focus on
impacts while emerging from the next implementation of the R&D Tax Incentive
I
dom D-19 2020/21
dominate
year of our activity as a stronger, more in partnership with Inland Revenue and
inate recovery
agile, and resilient entity. Assumptions MBIE. This includes continuing education
around impacts of COVID-19 on and engagement around the scheme,
Callaghan Innovation and its ability to along with operationalising our role
2020 will
In 2019 the Government set out an recovery. The impacts on New Zealand are
operate are outlined in this document.
As more information becomes available,
advising on applications.
/21
We will continue to support startups
economic plan for a productive, equally severe, with the IMF predicting our we will update our assumptions, which
who play a vital role in the innovation
sustainable and inclusive economy, economy will shrink by 7.2 per cent in 2020 could change the nature of some of our
ecosystem. We will oversee and administer
following on from establishing the Living and return to 5.9 per cent growth in 2021. activities and deliverables as set out in this
a high impact programme of incubators
Standards Framework in 2018. To position Statement of Performance Expectations.
The pandemic represents an inflection and accelerators, including a refreshed
New Zealand for the future, the application
point for New Zealand where Through the COVID-19 Response and Technology Incubator programme. This
of innovation and technology to our
unprecedented disruption to our Recovery Fund portion of Budget 2020, support will assist entrepreneurs to grow
economy is key to moving from volume to
economy, innovation system and R&D Callaghan Innovation was allocated $150m and commercialise their research and
value, developing skilled talent, sustainable
activity creates the opportunity to reshape to deliver a Short-Term R&D Loan Scheme products both here and abroad.
and affordable energy systems, and a
our economy. We must not waste this to support R&D-performing businesses
step change for Māori. Additionally, the Through Research and Technical Services
opportunity or shy away from it. through the crisis. We were also allocated
plethora of technology coming our way (RTS), we continue to help solve New
$2m from the Economic Development
can positively impact the Government’s Callaghan Innovation has pivoted our Zealand companies’ scientific and
Budget which we are using to offer
Wellbeing Agenda as measured through five-year strategy in order to support the technology problems so they can develop
business consultancy services to targeted
the Treasury’s Four Capitals – Natural, Government’s recovery efforts throughout new products and take products to market
customers of our Regional Business
Social, Human and Financial/Physical. 2020/21, firmly focused on how we faster. We have recently evolved how our
Partner network.
continue to diversify our economy, RTS team integrates their services into the
COVID-19 emerged in late 2019 and since
foster new and amplify emerging high organisation and ecosystem – 2020/21
has had a profound global effect. The
value sectors and businesses for global will see this work continued.
global economy is projected to contract
growth. We must look beyond simply
sharply by three per cent in 2020 (which
rebuilding existing industries. There will
is much worse than the 2008/09 Global
also be impacts of COVID-19 on Callaghan
Financial Crisis), returning to growth the
Innovation’s commercial revenue and
following year assuming effective policies
operations.
are implemented to support economic
5 6
2.0 | COVID-19 recovery will dominate 2020/21
Statement of Performance Expectations
Investment in our three transformation This year we will implement a new
programmes continues to take us operating model to support our strategy,
toward being a government exemplar of update our vision, values and identity,
innovation. enhance our support of the Māori
Economy and te ao Māori, and embed
2020/21 continues our significant
a risk culture that supports the Board’s
investment in our Gracefield site in Lower
appetite for a more innovative agency.
Hutt, Wellington, where we have over 200
world-leading scientists and engineers. Delivering better outcomes for innovative
We will demolish buildings, embark businesses and New Zealand lies at the
on construction of a new hazardous heart of everything we do. We cannot
goods facility, construct flexible office achieve our mission alone. Many
accommodation as well as develop the organisations and individuals contribute
sitewide masterplan and strategic business to building New Zealand’s innovation
case for future site development. economy.
Our Digital Transformation Programme Our people will be out listening to
takes a massive step forward this year and engaging with a wide range of
with our organisation being the first stakeholders – strategic partners, regional
government agency to fully implement economic development agencies,
G Suite productivity tools. We will stand government agencies and Crown
up a new grants platform and complete Research Institutes – playing our role
work to optimise our internal networks for as a superconnector of the innovation
enhanced productivity. ecosystem.
Callaghan Innovation continues to place Our work this year is as important as ever,
significant emphasis on our people, culture supporting recovery and diversification
and work practices, and we have spent a of our economy through technology,
significant part of 2019/20 developing our enriching our innovation ecosystem,
culture transformation programme – Tātai and contributing to the Government’s
Whetū. goal of building a productive, sustainable,
and inclusive economy for a better
New Zealand.
Pete Hodgson Jennifer Kerr Vic Crone
Chair Deputy Chair Chief Executive
7 8
Statement of Performance Expectations
3.0
3.0
Our SServices
Our
ervic
es
R&D Tax Incentive
We partner with Inland Revenue to
- t emporary relief options for customers
with R&D grants and repayable loans,
Innovation Skills
We offer four business capability courses
Following successful
webinars and other
implement the R&D Tax Incentive, the including flexibility with contract terms, to give firms the knowledge, skills digital events we
Government’s flagship programme to R&D staff and claiming and motivation to grow faster. These have put on to replace
support businesses to invest in R&D. Our programmes are Lean, Build for Speed, in-person events since
- xtending the Wage Subsidy Scheme to
e
sector experts and Regional Business Driving Innovation and Innovation IP. the COVID-19 lockdown
R&D intensive pre-revenue businesses
Partner network educate and engage period, many Callaghan
- a short-term R&D Loan Scheme. We recently launched Capital Education – a
business about the incentive while the Innovation teams and
foundation workshop and video series to
joint-agency Core Team of experts assess customers have requested
Connect to Experts help startups understand the capital-raising
applications. assistance with future events.
process in New Zealand and how they
We offer advice and tools that connect firms In response our Events team
can raise the capital they need to create a
R&D Capability & Commercial Services with expertise and capability, locally and has developed a suite of best
thriving business – even in the COVID-19
Our leading scientists and engineers are globally. We also operate ScaleUp.nz, a free practice materials for future
environment.
dedicated to helping New Zealand firms online platform showcasing New Zealand virtual events.
solve tough technical problems. Our innovation to the world with three guiding
Measurement Standards Around every two years we hold
specialist capability covers advanced principles:
New Zealand’s National Metrology our own C-Prize competition that
materials, advanced manufacturing, internet 1. F
ind – information, insights, trends and seeks to push the boundaries of
Institute – the Measurement Standards
of things and data science as well as opportunities. what is possible through technology,
Laboratory – is located at our Gracefield
biotechnology. to tackle complex global problems
2. C
onnect – introductions, partnerships, site. This provides accreditation, calibration,
We also provide contract R&D and and measurement standards services to with creativity and inventiveness.
source new business and collaboration
contract active pharmaceutical ingredients New Zealand. Throughout 2019/20 our focus has
opportunities.
manufacturing through our commercial been on empowering New Zealand’s
services such as GlycoSyn, and commercial 3. G
row – funding, expertise, new markets Events and Delegations next generation of environmental
astronomy optics manufacturing through and new customers. Networking opportunities are an innovators. We are looking for solutions that
KiwiStar Optics. important component of our mandate, can positively impact climate change, help
Incubator and accelerator programmes when we bring together innovators and clean up our waterways, and encourage
R&D Funding We invest in and actively help commercialise entrepreneurs around areas of speciality New Zealanders to use natural resources in
We currently offer funding support through complex technologies via our Technology (e.g. Southern SaaS) to connect, learn and smarter ways.
Getting Started Grants, Project Grants Incubator programme. We support Founder collaborate or take delegations offshore
and Student Grants. We are working with Incubators that provide concentrated, (usually in partnership with NZTE) to gain
Government to evolve the grants we offer core business support for early stage, more exposure to the latest technology,
as well as to create temporary support high growth innovators to accelerate innovation practices and markets.
mechanisms in the context of COVID-19. their path to market. Accelerators provide
These include: short programmes focusing on rapid and
intensive product development to establish
- t he COVID-19 Innovation Acceleration an investment-ready startup.
Fund
9 10
Statement of Performance Expectations
4.0
4.0
Our sstrategy and focus
Our FY 2019/20 FY 2020/21 FY 2021 - 41
areas tfor
areas rate2020/21
gy an PHASE 1: PHASE 2: PHASE 3:
for 20 d foc
STRATEGY
DEVELOPMENT COVID-19 Recovery New long-term
transitional Strategy strategy and annual
20/2 us
AND PLANNING
In 2018 we established our long-term These things apply not only to firms we Strategy strategic plans
1
organisational strategy. Now in year three
of our five-year strategy, our focus in
this strategic period has been to drive
work with but to our own organisation,
hence we will continue investment in our
transformation programmes.
our three transformation programmes
This means a focus on recovery and
to deliver new capability to support
evolution of key sectors including
customers, increase R&D investment, and ANNUAL
Agritech, Digital, Food & Beverage, DELIVERY RESPONSE TEAM(S) DELIVERY
connect the innovation ecosystem. OPERATING
HealthTech, and unlocking the potential FY 2020/21 3 month rolling plans
PLANS
In March 2020 we refocused our strategy of the Māori Economy. We will use our
to reflect COVID-19 and its impact. We current service mix (including delivering
recognise the deep disruption caused these in new ways such as online
by the pandemic. We face multiple local workshops and webinars) along with new
and global recessionary (and perhaps government support initiatives (wage
depressionary) scenarios ranging from subsidy, R&D loans etc) to do this.
short term to protracted, with some
This year we will undertake long-term
sectors and businesses unlikely to survive
strategy work, looking out over the next
the crisis. There is a fundamental risk to
20 years, which will inform the new
the viability of cash-constrained innovators
five-year strategy to be articulated in our
and R&D investment.
Statement of Intent 2022-2027. Given
Nonetheless we believe the crisis presents COVID-19 and the need for a transitional
a unique opportunity for New Zealand to strategy – in which there will necessarily
reshape its economy to become more be a significant element of fluidity – our
sustainable, productive and inclusive. strategy for the coming months exists to
International research shows the pace of ensure Callaghan Innovation contributes
innovation – and automation and process to the future of New Zealand by remaining
optimisation – increases during economic operationally and financially resilient
downturn. During the next 18 months, while successfully transitioning to a post
firms will need to innovate, redefine COVID-19 world.
business models, rapidly digitise and
automate for greater efficiency.
11 12
4.0 | Our strategy and focus areas for 2020/21
Statement of Performance Expectations
Our Vision Our Strategic Themes
STRATEGY At Callaghan Innovation we are inspired Our four strategic themes remain relevant
by our namesake Sir Paul Callaghan’s to COVID-19 with the transitional strategy
commitment to solving New Zealand’s seeing more initiatives being delivered in
REALISING GOVERNMENT: poor productivity growth through science, points 1 and 2:
OUR VISION A productive, sustainable, inclusive New Zealand technology and evidence-based decision
1. S
howing New Zealand where
making. Our vision is ‘New Zealand is a
technology is taking the world, how we
place where talent wants to live’. We also
CALLAGHAN INNOVATION: must adapt and how innovation drives
believe in the transition to a knowledge-
New Zealand is a place where talent wants to live success.
based economy away from exploitation
of resources and that this new economy 2. F
uelling demand for New Zealand
will improve our real wealth along with our innovation and being a voice for
TO
ACHIEVE forests, land, rivers, seas, fauna, and our innovators.
BERD # Companies # and $ Value of high # Start
THESE (1% OF GDP) innovating investment deals tech exports ups tangata.
OUTCOMES
3. C
onnecting innovators into local and
FOR NEW global ecosystems and collaborating to
Our Purpose
ZEALAND remove friction within New Zealand’s
OUR CUSTOMER AND ECO-SYSTEM STEWARDSHIP Callaghan Innovation is an incredibly R&D ecosystem.
Callaghan Innovation uses its expertise, influence and mana to ensure diverse organisation with a wealth of
New Zealand becomes a place where talents wants to live experts from right across the science 4. E
mpowering innovators by partnering
and innovation ecosystem. Through with businesses and delivering the right
this diversity we are stronger. Our services and funding support at the
FOCUS ON
FOUR KEY SHOW THE CONNECT THE FUEL EMPOWER purpose is to use our expertise, right time, for the greatest impact.
STRATEGIC FUTURE ECO-SYSTEM DEMAND INNOVATORS influence and mana to support business
THEMES research and development, accelerate Our Customers
commercialisation, and empower New Our customers are at the heart of
A clear identity, Manage Zealand’s innovators. everything we do. We focus on ensuring
Fix our Put all our IT in Strengthen
operating through our service mix meets customer needs at
Gracefield the cloud and our Health and
model and build COVID-19
site digitise services Safety culture each stage of the innovation journey. Last
5 FOCUS capability impacts
AREAS TO year we mapped an entrepreneur’s journey
BUILD OUR through the innovation ecosystem and this
INTERNAL Achieve a sustainable financial position | Maximise value from resources year we will embed customer experience
CAPABILITY OUR FINANCIAL STEWARDSHIP
further into our service suite.
AND
CAPACITY
OUR VALUES
About Business | Bold | Connected | Deliver results | Everyday home safe
13 14
4.0 | Our strategy and focus areas for 2020/21
Statement of Performance Expectations
The Innovation Eco-System Map
Market expansion
24%
First
growth
First 26%
development
78%
Working Refreshed Technology Incubator
Idea towards full Programme
potential The 2014 pilot programme produced 45
startups, attracted more than
$50m in investment and created over 160
3. O
ur Tātai Whetū programme is
new tech jobs. A $9m boost in funding
updating our operating model and
along with increased capability in the
ways of working to be fit for the future.
organisation and a refreshed line up of
First This includes our vision and values,
launch Tech Incubator licensees will see us take
process optimisation, organisational
25% this programme to another level in the
Iteration/ Strategic design, and the principles of
coming years.
diversification growth Māoritanga as an exemplar Treaty
12% 13%
partner. It also incorporates our
Our Transformation
customer journey work and further
Our aspiration is to be a government
Via a dedicated Māori Economy group, we The R&D Tax Incentive cultural changes needed to optimise
exemplar of innovation in order to
have significantly increased the number The Government is investing one customer experience.
meet the needs of our customers and
of Māori economy firms we are working billion dollars into this scheme and a modernise our own organisation. Three
with and the number of services these Keeping our people safe
key area of strategic focus is successful transformation programmes support this
firms use. 2020/21 will see us continue this operationalisation to contribute to our Due to the nature of our work, significant
modernisation including:
focus and investment. target of increasing R&D spend to two risks and hazards exist on our sites every
per cent of GDP by 2027. 1. T
he GIQ Programme Tactical Estates day. We will continue to strengthen our
COVID-19 response tranche focuses on addressing decades Health and Safety culture via three areas of
Alongside Inland Revenue, we are of underinvestment via significant focus:
Callaghan Innovation has made changes
promoting recently fast-tracked structural upgrades and maintenance.
to our services in order to better support 1. C
ompletion of the Health and Safety
refundability changes to provide extra Our Strategic tranche will define our
our customers through the financial Project
cashflow support to R&D-performing future vision and how we can create
consequences of the pandemic. Some
businesses in context of COVID-19. More a diverse innovation community. 2. C
ontinuing core operations focus on
of these include revising grant payments
loss-making businesses now qualify to have Additionally, this year we will complete health and safety
terms to increase cashflow, holding
their 15% R&D tax credit refunded in cash. the co-location of our Auckland
events that would have been cancelled via 3. C
ontinuing delivery of our Hauora
webinar, amplifying support available from offices.
(Wellbeing) Strategy.
other agencies, and educating startups 2. O
ur Digital Transformation Programme
on how/where to access capital through builds the critical platforms and Research and Technical Services
the crisis. We will continue to implement systems to deliver new services, Our strategy work has recently reviewed
policy initiatives developed with support collaboration, improve the role of this group and how we can
Government partners such as the Short- customer experience and scale our better leverage their capability for the
Term R&D Loan Scheme to support the impact via digital and automation benefit of New Zealand. Our focus this
recovery and transition of our economy. for both our customers and the year is to finish implementation of this
ecosystem. strategic work.
15 16
Statement of Performance Expectations
5.0
5.0 A PRODUCTIVE, SUSTAINABLE AND INCLUSIVE NEW ZEALAND
Meas
Measuring our NEW ZEALAND IS A PLACE WHERE TALENT WANTS TO LIVE
NEW ZEALAND IS A PLACE WHERE TALENT WANTS TO LIVE
perfouring our
performance INNOVATION IMPACT ON NEW ZEALAND
rman Growth in number Growth in number
ce
Growth in BERD% Growth in value of Growth in number
of companies and value of
of GDP high tech exports of startups
Callaghan Innovation’s performance What success looks like when we have innovating investment deals
framework is aligned with our five- year delivered our transformation programmes:
strategy and our purpose – to support
- ew Zealand is recognised as a place
N
business research and development,
where talent wants to live.
accelerate commercialisation, and IMPACTS ON FIRMS
empower innovators. Through this we - ore businesses are innovating and
M
actively contribute to the Government’s conducting R&D across both startups Revenue $ Customer R&D spend
# Customer Net profit growth $ Value of
vision of a productive, sustainable and and established businesses. growth rate export revenue growth rate
FTE growth (% YoY) investment deals
(% YoY) growth (% YoY)
inclusive New Zealand.
- ew Zealand’s business expenditure
N
Along with other agencies, we work on R&D (BERD) grows rapidly to two
to support innovation impact on New per cent of GDP by 2027 and we
Zealand – this is demonstrated through successfully commercialise our R&D,
five key outcomes in our Performance driving strong export growth. SERVICE & ENGAGEMENT
Framework. To deliver this impact we need
- ew Zealand businesses are attractive
N
to ensure we are working with the right # Multiple # R&D Tax Incentive Cumulative
to global and local investors and we # Customers # Services NPS
Services use Applications $ spend on R&D
customers, effectively engaging with them,
see growth in the number and value of
and offering the right services at the right
deals.
time.
- allaghan Innovation seamlessly
C
We have a range of measures to track our
connects innovators to the right
service and engagement indicators such as ORGANISATIONAL HEALTH AND TRANSFORMATION PROGRAMMES
services, at the right time, in the
number of customers we work with, how
right ways, internally and across the
many of our services they use, and our Net Employee # Programme # Programme Leadership Organisational
ecosystem. % Budget H&S project
Promoter Score. engagement # TRIFR maturity milestones through change
variance milestones
- allaghan Innovation is recognised
C ranking level met change capacity
Given we have a large strategic
as helping to drive the growth of the
programme for internal transformation, we
Māori economy and we become a
also measure how we are progressing with
strong Treaty partner.
our transformation programmes along
with assessing our organisational health.
17 186.0
6.0 Performance Measures 2019/20
Performance
Standard
2020/21
Performance
Standard
State
Statement of Total number of organisations working with Callaghan Innovation 2600 2600
m
on services this Financial Year
Perfo ent of Expectations
Performance Net Promoter Score of all surveyed customers +60 60
rman
Total number of organisations working with Callaghan Innovation 300 300
and NZTE as a F700 customer
ce Ex
Callaghan Innovation Operations: Multi-Category Appropriation Digital Transformation Programme
pecta - Deliver new grants platform
- Implement new data integration and architecture platform
N/A
N/A
Achieved
Achieved
tions
This appropriation will enable us to 1. GIQ Programme.
- Complete network optimisation N/A Achieved
broker and provide innovation services
2. Digital Transformation Programme.
to businesses and deliver programmes Gracefield Innovation Quarter (GIQ) redevelopment
that enhance New Zealand’s innovation 3. Tātai Whetū Programme. - GIQ Strategic Services Programme Business Case complete N/A Achieved
system. We can then provide more support - Sitewide Masterplan complete N/A Achieved
4. E
nsuring we are delivering to our
for businesses to successfully develop new - Biotech Hub Indicative Business Case complete N/A Achieved
Health and Safety obligations.
and improved products, processes and - Demolition of four structures onsite N/A Achieved
services through R&D and technology- 5. N
ew programmes Callaghan - Construction of a hazardous goods facility commenced N/A Achieved
driven innovation by improving the Innovation received funding for funded - Construction of flexible office accommodation commenced N/A Achieved
performance of New Zealand’s innovation for in Budget 2019:Bio-Processing Tātai Whetū Programme (Culture, operating model & customer
system. Alliance and NZ Product Accelerator. experience)
This appropriation has three categories: 6. NZ Food Innovation Network. - Embed new Operating Model and associated processes N/A Achieved
- Deliver Shared Vision, Values, and Identity N/A Achieved
- Building Business Innovation We have reviewed the proposed - Embed new Risk Culture in Callaghan Innovation N/A Achieved
performance standard in context of
- esearch and Development Services
R Māori Economy
the impact of COVID-19. Across most
and Facilities for Business and Industry - Number of Iwi & Trusts served* N/A 5
measures, we have maintained the existing
- usiness Research and Development
B performance standard. This reflects the - Defining our role as Treaty partner N/A Achieved
Contract Management. interplay of economic factors with short- Health, Safety and Wellbeing
term demand drivers offset over the year - Full implementation of PCBU framework N/A Achieved
How Callaghan Innovation’s by economic downturn and business - HSE Critical Risk Framework Operationalised N/A Achieved
performance is measured impact on R&D. This means there will be - Wellbeing strategy operationalised - engagement score for
We have included in this category the some fluidity in the outcomes. Wellness above 6.9 and Happiness above 7.4 N/A Achieved
performance measures that relate to
Bio-resource Processing Alliance (BPA)
activities and investments Callaghan - Number of industry partners involved in research projects N/A Baseline to be
Innovation is undertaking in 2020/21, established
including: - umber of new products or processes developed for
N N/A Baseline to be
industry partners established
NZ Product Accelerator (NZPA)
- Number of industry partners involved in research projects N/A Baseline to be
established
- umber of new products or processes developed for
N N/A Baseline to be
industry partners established
NZ Food Innovation Network
- Continued operation of the New Zealand Food Innovation
Network and support MBIE with the programme review N/A Achieved
19 206.0 | Statement of Performance Expectations
Statement of Performance Expectations
Building Business Innovation
How Callaghan Innovation’s performance is measured
Scope Examples of services provided
Performance Measures 2019/20 2020/21
This category is limited to activities that - Customised one-on-one advice and
Performance Performance
raise awareness about and increase information for business
Standard Standard
business investment in R&D.
- onnection services for businesses
C
Number of customers who worked with Callaghan Innovation in 1,200 1,000
to access domestic or international
What does this mean? the following services:
expertise, facilities, training, knowledge
It is intended to accelerate the growth - Events
and technology infrastructure
of innovative companies and build the - International Missions
effectiveness and skills of New Zealand’s - Training services and programmes - Innovation Skills (formerly ‘Programmes’)
innovation system. - etworking events, tradeshows and
N Net Promoter Scores for the following Callaghan Innovation
Raising awareness of and increasing sponsorships Services: +30 +30
business investment in R&D is a core - Events +60 +60
- Incubator and Accelerator programmes
function for Callaghan Innovation. We - International Missions +60 +60
for business.
accelerate the growth of innovative - Programmes
companies and build the effectiveness and Cost and Funding Total unique opens of Callaghan Innovation’s monthly N/A 3,500
skills of New Zealand’s innovation system.
Accelerate e-newsletter
Cost and Funding 2020/21 ($M)
Scale Up NZ
Revenue
- Organisations profiled on Scale-Up NZ N/A 2,000
Crown Revenue - Appropriation 37.1 - Introduction requests N/A 450
Other Revenue 1.4 HealthTech Activator N/A Development
Define programmes and services required to smooth the and delivery of
Total Revenue 38.5
commercialisation journey of Healthtech companies 75% of
Expenses 38.5 programmes
and services
Net funded to/(from) 0.0
21 226.0 | Statement of Performance Expectations
Statement of Performance Expectations
Research and Development Services and Facilities for Business and Industry
How Callaghan Innovation’s performance is measured
Scope We also provide advice, consultancy and
Performance Measures 2019/20 2020/21
This appropriation is limited to providing technical training and educate businesses
Performance Performance
research and technical expertise and on how to improve their R&D and
Standard Standard
facilities to business and industry. innovation processes for the future. Our
customers range in size and maturity from Number of customers with a Research and Technical Service 240 216-264
What does this mean? start-ups to multinational corporations, project this financial year
It is intended to achieve growth in in public and private sectors, and across a
Net Promoter Score from Research and Technical Services +50 +40
businesses through meeting their research, host of industries.
development and commercialisation RTS Strategy delivery
needs. Examples of services provided Deliver and implement a new commercial operating model that N/A Achieved
- Access to specialist equipment, supports high-impact ‘frontier firms’ and established R&D players,
Callaghan Innovation meets the R&D
facilities, pilot plants and laboratories while sustaining revenues
needs of business by helping to de-risk
innovation and get products, processes, - esign and prototype development
D
or services to markets quicker, so business services
can realise value faster and gain a greater - Technical expertise and facilities
return on investment. We do this by
applying a commercial lens and our - onnections to external R&D capability
C
unique mix of world-class expertise and fit for meeting business needs.
technology to each stage of a business’s
R&D journey. We invest in pioneering Cost and Funding
technologies and infrastructure and make
Cost and Funding 2020/21 ($M)
it available to New Zealand businesses.
Revenue
We connect businesses to other technical
experts and business collaborators, across Crown Revenue - Appropriation 42.5
New Zealand’s innovation ecosystem
Crown Revenue - Other 1.4
and worldwide. We have expertise in
the technologies that will transform our Crown Revenue - National Science
future, including advanced materials, Challenge 17.8
biotechnologies, advanced manufacturing,
Commercial Revenue - Domestic 7.2
artificial intelligence, robotics, and the
internet of things. We partner with Commercial Revenue - International 10.7
business to solve tough technical
Other Revenue 1.8
problems and prototype, develop, test,
improve and validate a product, process Total Revenue 81.4
or service that can be delivered at scale.
Expenses 82.5
Net funded to/(from) (1.1)
23 246.0 | Statement of Performance Expectations
Statement of Performance Expectations
Business Research and Development Contract Management Future-proofing New Zealand’s Manufacturing Sector by
Driving Industry 4.0 Uptake and Skills Development
Scope Examples of services provided
This appropriation is limited to the - Assessment and due diligence of grant This appropriation is limited to a package Cost and Funding
selection of businesses or individuals for recipients of complementary elements that target
either the provision of Research Science different stages of Industry 4.0 uptake. We Cost and Funding 2020/21 ($M)
- Monitoring of contracts and incubators
and Technology output, or the award of intend to increase the uptake of Industry Revenue
grants, and to negotiate, manage and - unding and monitoring outsourced
F 4.0 and improve the productivity and
monitor appropriate contracts with these partner organisations who promote competitiveness of New Zealand firms. Crown Revenue – Appropriation 1.4
businesses or individuals. Callaghan Innovation services.
Total Revenue 1.4
What does this mean? Cost and Funding Expenses 1.4
This category is intended to achieve
Cost and Funding 2020/21 ($M) Net funded to/(from) 0.0
efficient and effective allocation and
contracting of research, science and Revenue
technology outputs, and grants to
Crown Revenue - Appropriation 7.8 How Callaghan Innovation’s performance is measured
maximise their returns to New Zealand.
Other Revenue 0.5
Callaghan Innovation currently manages Performance Measures 2019/20 2020/21
three R&D grant funds on manages three Total Revenue 8.3 Performance Performance
R&D grant funds on behalf of MBIE. We Standard Standard
Expenses 8.3
provide robust, transparent and efficient
Number of customers who received a service during New measure Baseline to be
allocation and monitoring services of these Net funded to/(from) 0.0
the financial year established
grants to business.
Net Promoter Score from customers who receive a service New measure Baseline to be
during the financial year established
How Callaghan Innovation’s performance is measured
Deliver a programme that includes at least 10 Industry N/A New measure
Performance Measures 2019/20 2020/21 4.0 factory site visits per year and a dedicated mobile
Performance Performance showcase to demonstrate Industry 4.0 technology
Standard Standard
Number of new Project and Student grant applications 700 700
received during the financial year
Percentage of Project and Student grant applications who have 90% 90%
received a decision within 30 working days of receipt of the
completed application
25 266.0 | Statement of Performance Expectations
Statement of Performance Expectations
Output Class – National Measurement Standards
How Callaghan Innovation’s performance is measured
Scope Examples of services provided
Performance Measures 2019/20 2020/21
This appropriation is limited to providing - Specialist measurement services
Performance Performance
specified standards to satisfy the needs
- xpert consultancy, including advice
E Standard Standard
for traceable physical measurement in
on difficult measurements
New Zealand. Provision of national measurements and standards and Achieved Achieved
- &D on measurements or measuring
R related services in accordance with statutory obligations
What does this mean? instruments under section 4 of the Measurement Standards Act 1992,
We contribute to the success of reported annually to the Minister and accepted
- Field measurements or surveys
companies selling products and services All technical procedures related to the maintenance of Achieved Achieved
that are dependent on accurate and - Calibration services.
national measurement standards (in accordance with the
internationally accepted traceable physical resolutions and recommendations of the Metre Convention)
measurements. Our Measurements Cost and Funding
independently reviewed and validated, with all external
Standards Laboratory is New Zealand’s review actions completed by the end of the financial year
Cost and Funding 2020/21 ($M)
national metrology institute, ensuring that
New Zealand’s units of measurement are Revenue
consistent with the International System
Crown Revenue - Appropriation 8.1 Commercial Revenue Our commercial revenue is reinvested
of Units. Delivery of services is provided by
We earn commercial revenue for back into our services to ensure our
the Measurement Standards Laboratory in Commercial Revenue - Domestic 0.4
our research and technical services capabilities are up to standard to continue
accordance with its role assigned under
Commercial Revenue - International 0.1 domestically and internationally. We to deliver and improve our services to
the Measurement Standards Act 1992.
also run two export businesses as part meet the immediate and future needs
Other Revenue 0.2
of this portfolio – GlycoSyn and KiwiStar of business and industry. Note that our
Total Revenue 8.8 Optics. We have scientists, engineers, Domestic Revenue of $7.6m includes
and technology experts providing advice, $1.1m from our Food subsidiaries.
Expenses 8.8
services and products to the New Zealand
Net funded to/(from) 0.0 and international marketplace. Commercial Revenue 2020/21 Budget
($ M)
You can see a summary below of our
total commercial revenue as well as a Domestic Revenue 7.6
breakdown in Building Business Innovation International Revenue 10.8
and Business Research and Development
Contract Management. Total Commercial Revenue 18.4
27 286.0 | Statement of Performance Expectations
Statement of Performance Expectations
Non-Departmental Capital Expenditure
Scope What does this mean?
This appropriation is limited to capital This capital expenditure is capital to
expenditure to support the development support the purchase or development
of Callaghan Innovation’s strategic of assets by and for the use of Callaghan
infrastructure. Innovation to ensure we have the
appropriate infrastructure to enable us
Callaghan Innovation is expected to
to provide the best possible services to
draw down a total of $12.1m in capital
business.
appropriation for 2020/21. This is split
across Gracefield property initiatives
($8.0m), National Measurement Standards
($1.9m) and other specialised equipment
($2.2m).
Note the $149.0m in Equity for Repayable
Loans is referred to on page 32 under
Non-Departmental Capital Expenditure.
How Callaghan Innovation’s performance is measured
Performance Measures 2019/20 2020/21
Performance Performance
Standard Standard
Any physical and virtual infrastructure investment is aligned Achieved Achieved
with the overall strategy
Any major capital project proposal is developed in Achieved Achieved
accordance with published Treasury business case guidance
29 306.0 | Statement of Performance Expectations
Statement of Performance Expectations
Business Research and Development Grants
In addition to our MCA and National We provided 20% co-funding for R&D for
Measurements Standard Output Class, an initial three with an extension option,
Callaghan Innovation administers three capped at $5 million a year. Growth Grants
funding programmes aimed at helping are funded by the Crown through a multi-
businesses invest more in R&D. We year appropriation to the end of 2021/22.
administer a range of R&D grants to add The scheme has now closed, and we are
scale to businesses’ own R&D investment no longer accepting applications.
for greater impact. Our R&D grants are
structured to meet a range of business Cost and Funding
needs, whether those businesses are
Cost and Funding 2020/21 ($M)
young start-ups or established R&D
performers. Revenue
Research and Development Growth Crown Revenue – Appropriation 138.4
Grants Total Revenue 138.4
Growth Grants were designed to increase
Expenses 138.4
R&D investment by businesses that have
a strong track record for R&D spending in Net funded to/(from) 0.0
New Zealand.
How Callaghan Innovation’s performance is measured
Performance Measures 2019/20 2020/21
Performance Performance
Standard Standard
Percentage of businesses receiving a Growth Grant that 70% 70%
maintain or increase eligible R&D expenditure over the grant
period1
1
This compares the average eligible quarterly R&D spend in the two years prior to the Growth Grant (the years used to enter the scheme) with the
average eligible quarterly R&D spend during the Growth Grant period. Note: the wording about eligible R&D Spend being maintained or increased
has changed in the latest Ministerial direction. It was previously ‘the business has maintained or increased non-government funded eligible R&D
expenditure over the two years of the grant period as compared to the two years prior to the grant period’. It is currently ‘has maintained or
increased eligible R&D expenditure over the two years of the grant period as compared to the two years prior to the grant period’.
31 326.0 | Statement of Performance Expectations
Statement of Performance Expectations
Targeted Business Research and Development Funding Repayable Grants for Startups
R&D project grants support greater Cost and Funding Our Incubator Support Programme Cost and Funding
investment by businesses in R&D, accelerates the growth and success
especially those with less established Cost and Funding 2020/21 ($M) of high-value New Zealand start-up Cost and Funding 2020/21 ($M)
R&D programmes. We provide up to Revenue businesses through a range of services Revenue
40% co-funding of R&D costs. and funding. We intend to support
Crown Revenue – Appropriation 32.5 development and growth of new Crown Revenue – Appropriation 17.9
Our R&D experience, career and
Total Revenue 32.5 technology-focused business start-ups. Total Revenue 17.9
fellowship grants support undergraduate
and graduate students to work in a Expenses 32.5 Expenses 17.9
commercial R&D environment as interns in
New Zealand’s excellent commercial R&D Net funded to/(from) 0.0 Net funded to/(from) 0.0
facilities; this is a win-win solution for both
industry and the students. These grants are
funded by the Crown through a multi-year How Callaghan Innovation’s performance is measured
appropriation.
Performance Measures 2019/20 2020/21
Performance Performance
How Callaghan Innovation’s performance is measured Standard Standard
Performance Measures 2019/20 2020/21 Number of customers that received a service from either an 180 170
Performance Performance incubator or accelerator
Standard Standard Percentage of surveyed start-ups who agree that they have 60% 60%
Number of active Project Grants this financial year 570 570 gained business or commercialisation skills as a result of
working with the incubator/accelerator
Net Promoter Score from Project Grants recipients Baseline to be +70
established First ventures for funding from the Tech Incubator Programme N/A Achieved
Percentage of Project Grant recipients who perceived that the
grant- funded project:
- Had an overall positive impact on their business
95% 95% Non-Departmental Capital Expenditure
85% 85%
- Increased knowledge acquisition Short-term Research and Development Callaghan Innovation is expected to draw
85% 85% Loan Scheme down a total of $149.0 million in capital
- Improved business productivity
appropriation in 2020/21 to fund loans
Net Promoter Score from Experience Grants recipients +70 +70 Scope
as part of the COVID-19 Response and
This appropriation is limited to funds to Recovery Fund.
Callaghan Innovation to provide temporary
financial assistance by way of short-term
loans to businesses undertaking research
and development.
How Callaghan Innovation’s performance is measured
Performance Measures 2019/20 2020/21
Performance Performance
Standard Standard
Percentage of applicants that have been provided with a N/A 80%
decision within 4 weeks of their application being received
33 34Statement of Performance Expectations
7.0
7.0
Budg and financial
Budget
Profit and Loss Balance Sheet and Cash Flow
1. Balance sheet opening balances
state et and fin
1. T
he 2021 Budget is consistent with
are based on the latest Callaghan
statements
Callaghan Innovation strategic direction
and is considered appropriate and Innovation forecast to 30 June 2020.
ment ancia
achievable. 2. E
quity is forecast to increase as a
s
result of the following Crown capital
l
2. C
ontinued operational funding
from the Crown for: the Gracefield appropriations during the year, all of
Financial forecasts to 30 June 2021 The prospective financial statements rely
Innovation Quarter ($7.3m); Food which will be used to fund continued
The prospective financial statements are on the Budget 2021 assumptions noted
Innovation Network entities ($4.9m); investment in critical infrastructure
presented in accordance with generally below. The Callaghan Innovation Board,
and the National Science Challenge and technology – MSL equipment
accepted accounting principles and the which is responsible for the preparation
(NSC) ($17.8m) has been included in ($1.9m), scientific and digital plant and
Crown Entities Act 2004. They comply of these prospective financial statements,
the FY2021 Budget, along with the equipment ($2.2m) and further draw-
with Public Benefit Entity FRS No 42 – believes the assumptions adopted at
operational costs involved in delivering downs for the Gracefield Innovation
Prospective Financial Statements and the time of preparation provide the
these programmes. Quarter development ($8m).
other applicable financial reporting best estimate of the future financial
standards, as appropriate for Public Sector performance and state of Callaghan 3. E
quity is also forecast to increase by
3. T
he commercial revenue budget of
Public Benefit entities. Innovation for the year ended 30 June $149m as a result of the Short-Term
$18.4m represents a split between
2021. R&D Loan appropriation, with capital
The prospective financial statements have domestic and overseas of $7.6m and
$10.8m, respectively. contributions being used to issue loans
been prepared based on Crown policies Authorisation statement to R&D performing companies. As
and Callaghan Innovation outputs at the 4. S
ubmitted In Principle Expense Transfers
The forecast figures reported are those referenced under the profit and loss
time the statements were finalised. This from FY20 to FY21 for the Health Tech
for the year ending 30 June 2021. These assumptions above, interest income,
is forecast information and therefore the Activator, GIQ demolition costs, Industry
were authorised for issue on 18 June 2020 fair value and credit loss activity has not
actual results achieved for the period will 4.0 are approved by Treasury
by the Callaghan Innovation Board which been included in equity at this point,
vary from the information presented, due
is responsible for the forecast financial 5. C
ore operational costs other than those given the high levels of uncertainty
to external factors.
statements as presented. impacted by COVID-19 remain at similar about their impact.
levels to FY20. There is no provision for 4. F
ollowing the closing date of the R&D
abnormal costs. Growth Grants scheme on 31 March
Budget 2021 Financial Assumptions 2021, all grants are claimed and settled
6. W
hile the Short-Term R&D loan scheme
is expected to introduce interest, fair by 30 June 2021.
The 2020/21 budget is based on a broadly - ravel, with international travel budgets,
T
‘U-shaped’ recovery for which we have and to a lesser degree domestic travel value and credit loss activity, the exact
assumed New Zealand’s response level budgets, significantly reduced. impact will not be known until the loan
remains at Level 2 for the full financial portfolio is established. Given the high
- roject delivery costs, reduced in line
P level of uncertainty, these values have
year (allowing for temporary fluctuations
with the forecast drop in commercial not been forecast within the profit and
into either Level 3 or 1). This assumes
revenue. loss.
broader economic impacts, both within
New Zealand and globally, translate into To help mitigate the expected impacts of
depressed commercial revenue. reduced commercial revenue, Callaghan
has been provided with further funding
In addition to revenue impacts, there are
for FY21 to ensure operations and critical
also a range of non-discretionary changes
services can be maintained.
in operating costs that result from different
New Zealand response levels. The key costs
that are impacted include:
35 36Statement of Performance Expectations
8.0
8.0
Budg 2021 Financial
Budget
et 20
Assumptions
Assum 21 Fin
ption ancia
s l
The 2020/21 budget is based on a broadly
‘U-shaped’ recovery for which we have
assumed New Zealand’s response level
To help mitigate the expected impacts of
reduced commercial revenue, Callaghan
has been provided with further funding
4. S
ubmitted In Principle Expense Transfers
from FY20 to FY21 for the Health Tech
Activator, GIQ demolition costs, Industry
2. E
quity is forecast to increase as a
result of the following Crown capital
appropriations during the year, all of
remains at Level 2 for the full financial for FY21 to ensure operations and critical 4.0 are approved by Treasury which will be used to fund continued
year (allowing for temporary fluctuations services can be maintained. investment in critical infrastructure
5. C
ore operational costs other than those
into either Level 3 or 1). This assumes and technology – MSL equipment
Profit and Loss impacted by COVID-19 remain at similar
broader economic impacts, both within ($1.9m), scientific and digital plant and
levels to FY20. There is no provision for
New Zealand and globally, translate into 1. T
he 2021 Budget is consistent with equipment ($2.2m) and further draw-
abnormal costs.
depressed commercial revenue. Callaghan Innovation strategic direction downs for the Gracefield Innovation
and is considered appropriate and 6. W
hile the Short-Term R&D loan scheme Quarter development ($8m).
In addition to revenue impacts, there are
achievable. is expected to introduce interest, fair
also a range of non-discretionary changes 3. E
quity is also forecast to increase by
value and credit loss activity, the exact
in operating costs that result from different 2. C
ontinued operational funding $149m as a result of the Short-Term
impact will not be known until the loan
New Zealand response levels. The key costs from the Crown for: the Gracefield R&D Loan appropriation, with capital
portfolio is established. Given the high
that are impacted include: Innovation Quarter ($7.3m); Food contributions being used to issue loans
level of uncertainty, these values have
Innovation Network entities ($4.9m); to R&D performing companies. As
- ravel, with international travel budgets,
T not been forecast within the profit and
and the National Science Challenge referenced under the profit and loss
and to a lesser degree domestic travel loss.
(NSC) ($17.8m) has been included in assumptions above, interest income,
budgets, significantly reduced.
the FY2021 Budget, along with the fair value and credit loss activity has not
Balance Sheet and Cash Flow
- roject delivery costs, reduced in line
P operational costs involved in delivering been included in equity at this point,
1. Balance sheet opening balances
with the forecast drop in commercial these programmes. given the high levels of uncertainty
are based on the latest Callaghan
revenue. about their impact.
3. T
he commercial revenue budget of Innovation forecast to 30 June 2020.
$18.4m represents a split between 4. F
ollowing the closing date of the R&D
domestic and overseas of $7.6m and Growth Grants scheme on 31 March
$10.8m, respectively. 2021, all grants are claimed and settled
by 30 June 2021.
37 388.0 | Budget 2021 Financial Assumptions
Statement of Performance Expectations
PROSPECTIVE STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE
For the year ended 30 June 2021 2021 Budget Group $M
Revenue
Revenue from the Crown 116.1
Revenue from the Crown – Grants 188.8
Commercial revenue 18.4
Total Revenue 323.3
Other income 3.4
Interest income 0.5
TOTAL REVENUE 327.2
Expenditure
Personnel costs (60.1)
Science project and subcontract costs (37.5)
Other expenses (30.9)
Depreciation and amortisation expense (11.0)
Grant expense (188.8)
TOTAL EXPENDITURE 328.3
SURPLUS/(LOSS) (1.1)
Other comprehensive revenue and expense -
TOTAL COMPREHENSIVE REVENUE AND EXPENSE (1.1)
PROSPECTIVE STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021 2021 Budget Group $M
Balance at 1 July 2020 116.9
Total forecast comprehensive revenue and expense for the year (1.1)
115.8
Other transactions
Capital contribution 161.1
BALANCE AS AT 30 JUNE 2021 276.9
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