Finding the future with R&D
“The Growth Grant has been helpful to us, but the R&D tax credit is going to be better again due to the sheer amount of R&D we do.”
Andrew Somervell, Products and Technology VP, F&P Healthcare
© 2019 Fisher & Paykel Healthcare Limited
F&P Healthcare’s innovation pipeline
- Fifty years since the inception of its first product, Fisher & Paykel Healthcare has grown to be one of New Zealand’s most successful global companies, with its innovative medical devices helping around 14 million patients in more than 120 countries.
- The company has a strong focus on R&D, consistently investing around 10 percent of annual revenue in this area. In the 2019 financial year, that equated to $100 million, from revenue of just over $1 billion.
- Embedding a patient-centred approach into its culture is also key to keeping it at the cutting edge of innovation.
- The firm helps feed its talent pipeline by taking on interns. This summer alone 40 students will undertake internships through the Callaghan Innovation Student Experience Grant programme.
Ask Zak Flintoff what he loves about his job and he doesn’t hesitate.
“It’s easy to work at a company where you’re actually making a difference and helping people,” explains the Product Development Engineer. “And when you’re working in an area like infant care where I do, it’s even easier because you’re helping babies. That, for me, is about as good as it gets.”
Flintoff scored his dream job at Fisher & Paykel Healthcare almost two years ago, after undertaking a Callaghan Innovation R&D internship at the medical device maker in the summer between the third and fourth years of his University of Auckland mechatronics degree. During the internship he worked on a project using data gained from CT and MRI scans to help develop physical 3D models of infants for use in product testing.
“The project was really interesting and certainly gave me a good idea of what it could be like to work in the field,” he says. “The internship was also crucial to me landing this role and getting a job I really enjoy.”
This summer a whopping 40 tertiary students will undertake internships at Fisher & Paykel Healthcare supported by Callaghan Innovation’s R&D Experience Grants, hinting at the scale of R&D work undertaken at the company.
The firm consistently spends around 10 percent of revenue annually on R&D; in the 2019 financial year, when revenue surpassed the $1 billion mark, that equated to $100 million pumped into this area.
The company consistently doubles its annual revenue every five to six years, and Products and Technology VP Andrew Somervell says R&D is what underpins that growth story.
“What we try to do is improve care and outcomes for patients, at the same time as lowering the overall cost of delivering healthcare,” explains Somervell. “And when it comes down to it, that’s all about the product we create as a result of the R&D and product development work we do. It’s fundamental to our success.”
Somervell says the company intends to continue increasing its investment in R&D, helped by the implementation of the Research and Development Tax Incentive (RDTI). Previously the company had received the Callaghan Innovation R&D Growth Grant, valued annually at around $5 million; this year that’s being replaced by the RDTI.
“The Growth Grant has been helpful to us, but the tax credit is going to be better again due to the sheer amount of R&D we do.”
In 2019 Fisher & Paykel Health care celebrated 50 years since the development of its first product – an innovative humidifier designed to counter the drying effects of then-new portable ventilator technology used in hospitals. Today it has 4800 staff globally, around half of which are based in New Zealand, and just under 600 specifically employed in R&D. Somervell says staying at the cutting edge becomes more challenging as a company grows, so taking Fisher & Paykel Healthcare’s heritage of R&D and innovation, and embedding it into the company’s culture has been another crucial element to its success.
“For every patient type, or therapy that we are pursuing,” explains Somervell, “we’ll structure a team around that – everyone from the engineers involved in the R&D and developing the manufacturing processes, to the clinical and marketing people – because we think the better we understand that particular patient type the greater chance we have of coming up with new insights and better options to help them.”
Constantly feeding its talent pipeline is also a priority in a growth company so heavily focused on innovation.
Callaghan Innovation Head of Health Technology Andrew Clews says in recent years the organisation has worked closely with Fisher& Paykel Healthcare’s Brand Attraction team to align the skills, talents and smarts of many of New Zealand’s top science and technology students with the opportunities the company offers through its internships. The R&D Experience Grants from Callaghan Innovation fund ten-week placements for students or new graduates over the summer.
“Students gain real-world experience that’s tailored to their ambitions and interests and the company also benefits from an abundance of fresh thinking and energetic talent making it a win-win proposition,” says Clews.
Fisher & Paykel Healthcare Product Development Manager Melissa Bornholdt says the large size of the company means it can offer opportunities to those studying a range of disciplines. For example, her department is currently seeking a student with a textiles background to undertake an internship.
Bornholdt says the company also reaps many cultural benefits from taking on R&D interns.
“I’ve had students come into my team for the three-month internship period and then been in a position to hire them when they’ve finished their degree. That’s just fantastic because they know the company, they’re familiar with the products and the people, and they know how we work.
“It’s also really great having young, motivated people come in with their ideas because a fresh mindset is so valuable when you’re looking to innovate. Creativity really is at its best when you’ve got a diverse range of people working on projects.”