Sir

Your article dealing with the outcome of New Zealand's 1992 structural reforms of science administration was of considerable interest (Nature 391, 426–427; 1998). It contained several points, however, that are likely to contribute to a misreading of the New Zealand situation.

For example, in contrast to the impression given by statements in your article (and the subsequent correction to one of the figures quoted), 349 new science positions have been established since the Crown Research Institutes (CRIs) were set up, whereas the number of additional support positions has risen by only 83 over this period.

Your article quotes criticism of the need for CRIs to make a profit. But such profits are reinvested in research and CRI facilities. Last year, the institutes generated after-tax profit of NZ$29.8 million (US$17.6 million), all of which was reinvested.

The competitive nature of project bidding under the Public Good Science Fund (PGSF) demands that CRIs are efficient managers. The establishment of profit targets is a proven administrative tool for encouraging good performance. It should be remembered that CRIs compete for PGSF funding with tertiary institutions that are not required to operate in the commercial marketplace.

Universities are having difficulty in funding equipment through their core funding streams, as well as from the ‘contestable’ science market. But CRIs have expanded their net asset base from NZ$139.6 million to NZ$246.5 million. Is there any reason why academic institutions cannot manage their own performance in a similar manner?

The article did not mention a critical difficulty with the reforms, namely that universities and other tertiary educational institutes can now access the PGSF funds that the CRIs need to survive. CRIs by contrast cannot access tertiary sector research funds.

It is this one-sided nature of the science ‘market’ that has led to an increase in the number of players and suggestions that there are too many people chasing too little money. Science career paths have not so far been significantly destabilized by this factor, although the possibility that they will is the main cause of concern that many scientists have about the reforms.

CRIs are tightly focused on science and research closely related to the needs of the New Zealand agricultural, forestry, fishing and manufacturing industries, as well as to international trade and environmental requirements of central government and local authorities. It is this responsiveness to community need that is a significant element in demonstrating to those who control government budget allocations that investment in research and science offers a better return to society than expenditure in many of the other areas that compete for funds from the public purse. Without such responsiveness, it is unlikely that science funding would have been maintained, let alone increased.