Chief Executive's report
This has been a year of both change and achievement for Landcare Research. Following a thorough review and strategy update, we underwent major reorganisation to position ourselves strongly for the future. We also achieved a group operating surplus of $2.155 million from revenues of $51.6 million. Our net operating cashflow of $3.2 million places the company in a highly favourable position for the new financial year. These robust results highlight the commitment and resilience of staff through a period of significant change.
We have continued to work on science that has multiple benefits for stakeholders and New Zealand. For example, identifying carbon farming opportunities on Māori land could benefit Māori economic development and aid New Zealand’s response to climate change. Our work on determining the real value of New Zealand topsoil will help landowners and policy makers in setting priorities for land management practices.
New Zealand is exposed to biosecurity threats that could devastate primary industries, this country’s economic backbone. Our researchers are assessing the risks presented by foreign pests and how these might be mitigated. For example, recently, through our biosystematics expertise, we prevented disruption to carrot exports to Australia by identifying a mite found on New Zealand carrots. This mite was found to be already present in Australia. Similar knowledge helps central goverment and local bodies to determine timely and cost-effective eradication programmes and how best to apply them.
To ensure continued high relevance of our science we reviewed our strategic priorities for the next 5 years. Key considerations included the need to broaden our engagement with the private sector to increase revenue, and ensure the uptake of our science by stakeholders through commercial relationships. The process required us to strengthen our business development and commercialisation capability; build on our already strong relationships with Māori organisations; foster transdisciplinary thinking across our science; and develop future leaders. These initiatives will help us boost growth, and will improve our ability to invest in commercialisation initiatives while maintaining competitive remuneration and high quality facilities for our science.
In line with our revised strategy and increased focus on sustainable development we updated our mission statement and also introduced a vision statement, which refl ects our commitment to supporting sustainable development, and resonates with New Zealanders’ strong affinity with the environment2. Our new mission statement expresses the primary purpose of our science: to discover and apply knowledge that will protect, enhance and/or restore ecosystems that underpin the sustainability of terrestrial environments, whether in a relatively undisturbed national park or a high-density urban development. Both the vision and mission statements complement our guiding philosophy, which was updated by our board in 2004.
Growing customer demand for simple, integrated solutions focusing on environmental, social and economic outcomes and the increasingly competitive global market for science, plus the desire to strengthen internal leadership development and succession led us to reorganise our research business. We have gone from a regional matrix to 10 national science teams, assisted by a national support service and an integrated business development, commercialisation, marketing and communications capability. Except for one senior management appointment, restructuring was essentially complete by early May. In the new financial year there will be a major focus on strengthening cross-team initiatives and achieving greater operational efficiency through simplified and IT-enabled systems.
In adopting the new company structure we acknowledged the increasing complexity of external multi-party relationships and commercialisation entities (see organisational chart) and the growing need to undertake research collaboratively with external parties. The three Outcome Based Investment collaborations (OBIs) we lead and a fourth multi-CRI collaboration we contribute to were established this year. Although there were challenges in establishing these projects, parties to the OBIs are enthusiastic about the increased value already arising from joint long-term science planning and investment.
We acknowledge the substantial contribution made by Dr Rod East, founding Chair of Landcare Research OBIs. Sadly, ill-health forced Dr East’s premature resignation in March. In June we appointed our former Research Manager, Dr David Penman, as his successor.
We welcome the intent of the new “More Stable Funding Environment” (MSFE) science policy announced in May. We view this as shifting the focus of the funding bid process from “how can we win the contest?” to “how can we achieve the best sustained performance, delivery and national benefit?”This approach makes more effective use of provider organisations’ governance and performance accountability systems. Also, funding for our core science programmes is more assured with MSFE, despite the 2006 Budget providing no overall gain in Crown science funding in real terms. However, maintaining capability in nascent areas of commerce or policy development remains a concern. Under MSFE, our smaller and emerging programmes face increased bidding intensity for a smaller pool of contestable funds. Already, this has sparked unhelpful tension within New Zealand’s small research community. These situations highlight the importance of clear strategic priorities to ensure best use of science capability and of continuing to grow both Crown and private sector investment in research, science and technology in real money terms. We therefore applaud the Government’s intention to lift public investment from 0.52% GDP to the OECD average (currently 0.68% GDP) by 20103.
Landcare Research has continued its commitment to demonstrating leadership in sustainable development, leading by example and through research. We are also committed to sustainability reporting, using the Global Reporting Initiative (GRI) framework to guide our progress. We were honoured to receive the Australian Reporting Awards’ Sustainability Reporting special award for our 2005 Annual Report. Our staff continue to excel, including notable achievements from Margaret Barbour and David Penman.
I thank the board for their support and Landcare Research staff for their commitment and loyalty over the past 12 months. They have made huge efforts to ensure continuity of outputs through a period of substantial internal change. During the year we farewelled a number of senior staff who have made long-term and substantial contributions: Ian Whitehouse, Rau Kirikiri, Dr David Penman and Mark Cleaver. I wish them every success in their future roles and thank them for their part in helping to shape the company.
2 New Zealand Business Council for Sustainable Development UMR National Survey 2005.
3 Science for New Zealand: An overview of the RS&T system. MoRST 2006, p. 3.
Our vision:
Quality of life and economic well-being from healthy land environments
Te whai huanga me ngā rawa mai te oranga o te whenua
Our mission:
To future-proof natural, rural and urban ecosystems through world-class science innovation
Kia noho pai te taiao me ngā taone nunui pakupaku rānei mai ngā hua o ngā mahi pūtaiao puta noa
WJ Parker
Chief Executive