The report recommended that the PGSF should complement successful private research activities where funds are used to promote strategic and generic research and where there is a demonstrated need for such research.
The STEP report (MoRST 1992b) suggested that redistribution of the PGSF from output classes where there is low private funding, such as agricultural production, to output classes where there is a high level of private funding, such as secondary processing and manufacturing, will reduce the possibilities of `crowding out', or funding appropriable research.
Since then, the PGSF system has provided research results as a free or nearly free good.
In its 2010 Action Agenda, MoRST planned to strengthen the Technology for Business Growth scheme (TBG) administered by the Foundation for Research, Science and Technology (FRST), explore possible funding of `near market' research outside the PGSF, expand Joint Action Groups established by Tradenz, and evaluate the effectiveness of the tax system in achieving investment in innovation, research and technology (ibid, p.
In the past, the Manufacturers Federation had expressed negative views on private sector use of the PGSF system.
This involved funds for 1500 enterprise scholarships and post-doctoral fellowships, a taskforce to look at tertiary education, a transfer of money from the PGSF to a New Economy Research Fund aimed at funding research in new areas, funds for teacher fellowships, a proposal for a small business stock exchange, and funds for an 'ideas incubator'.
Measuring the effects of complementary spending by the PGSF is difficult (apart from case studies), but could possibly yield to some form of covariance analysis if data were available.