Launch of NZ By Design book - speech by Jim Anderton

Legend has it that our great Nobel-prize winning scientist Lord Rutherford was once asked what made New Zealanders such industrious and curious innovators. He replied: We don’t have much money, so we have to think!

Michael Smythe has produced a book that tells us about the process of thinking in New Zealand.

Like Lord Rutherford, Michael Smythe is right that the driving force of New Zealand innovation is our distance and isolation. We don’t have large amounts of money to throw at problems.

I was once introduced to a Japanese entrepreneur who had made a large investment in IT in Christchurch - he bought a business with over two hundred research staff. It didn’t produce a single product for sale. Its entire production was research for his company’s needs in California and Japan.

So I asked him why he came to Christchurch for that investment, and he told me he had a particular research problem that had been troubling his company for years. They had thrown the best IT equipment and brains not to mention money they could find at the problem, and it was taking them years to solve.

Then he brought the problem to Christchurch and found someone who solved it by hooking up a few old PCs and got the research finished in weeks. When he asked why, how his New Zealand researchers had done what no-one else had been able to do, he was told: “We’re not used to having the money to hire huge numbers of people, so we took a fresh look at identifying the problem and how it could be solved with the resources at his disposal”.

New Zealand’s isolation gives us the drive to innovate, to solve problems using our wits. That’s how the Hamilton Jet was developed, and countless other kiwi problems solved. It is not the ‘Number 8 wire’ approach. It’s the application of intellectual grunt. But our isolation also gives us something else - it gives us a precious advantage: the freedom to try things out.

New Zealanders expect to have a go at things, and risk failure. And risking failure is a critical element of innovation. We can have a go, and we can even fail and get back up because we are small and we can, where in many countries, failure is career ending, and so decision-makers are risk averse.

This was how our much-loved myth of Kiwi ingenuity was born. But unfortunately, the so-called Number 8 wire economy has its limits, too.

When I set up a Ministry of Economic Development a bit over ten years ago, one of our priorities in getting our economy growing, and creating jobs, was to sell to the world many more products that rely on our unique skill and creativity. Because uniqueness and creativity command a premium. They are the key to lifting our incomes.

For most of our economic history, our economy relied on the sun shining, the rain falling and the grass growing. But other countries can grow grass too.

The advantage we have that they can never match is our unique creativity. Design is one of the most important expressions of that. Not just styling, but the conception of how a product will be used, a view about what it is for and a unique way to bring that concept into being: That’s how you make products that earn us more tomorrow than we earned yesterday.

Back about five years ago I used to give speeches pointing out that five years before then, at the opening of the twentieth century, no one had ever heard of an iPod. And of course, just five years before today, no one had ever heard of an iPhone.

This week Apple announced they sold twenty million of them … in the last three months. Two years ago, none of us had heard of an iPad.

In the last twelve weeks Apple sold nine million at an average of nearly a thousand dollars each - $9000 million worth!

Each of those products is an example of brilliant innovation from a design-led company that demonstrates, in a spectacular way, that design and creativity have awesome potential.

There are many engineering innovations, but what is special about these products - and others - is that they weren’t waiting around to be discovered. Other people had already come up with mobile phones, and MP3 players. What they might never have come up with was the unique implementation. It was design that made the products different and successful.

This is important when we think about design in New Zealand.

It means there is not some form of ‘New Zealand design’ sitting around to be discovered. Instead, there is a way of looking at things that can only come from New Zealand. And if we want New Zealand to be successful, we have to harness that New Zealand uniqueness. We have to encourage more businesses to embrace a unique way of looking at things.

A few years ago I set up a New Zealand Design Group to work out how to better use design to improve New Zealand’s exporting. It discovered there is far more New Zealand potential in our industry than most people imagined. But the hard question to ask was why more of it wasn’t developed to create New Zealand products.

They found we don’t use our natural advantages very well - advantages they identified included international respect for our education system. Another is our cultural diversity - especially the unique quality Maori and Pacific Island influence.

Experts said that because we have mainly small firms, many see design services as ‘too costly’ or an add-on to their core business. Even among the bigger firms, there is a general lack of understanding of the value of design in the way leading export firms like Fisher and Paykel or Formway have understood.

Fisher & Paykel had a huge commercial hit with their dish drawer, which was created because the design team regarded nothing as given in the design process. They came up with a drawer that washed dishes, and developed a product that was sold all over the world.

That’s a pretty good example of what we need more of. But we have legitimate questions to ask about what is the best way to unleash this potential.

I strongly believe the best - in fact the only way - to get industry to take the necessary risks in a small country like New Zealand is for government to partner with industry.

That’s the only way we will align the elements of our education system, export agencies, industry training and everything else we need to get right.

It’s why the then-government created a research and development tax credit and set up NZ Trade & Enterprise to work with industry in promoting design.

The current government has a different perspective on this issue - its view is that the government should stand back and the market will create the necessary innovation all on its own, which is why one of the first things they did in government was to axe the R&D tax credit.

I don’t want to involve you in a political debate about the merits of these different approaches. But I do want to ask you to engage closely with it.

I get frustrated by hearing people say ‘politicians don’t get it’ when it comes to the need to lift the value of our exports and create more design-led products. The truth is that there is a divide in politics between those of us who see a hands-on role for the government in unlocking our development potential on one side; and those who believe in hands off on the other side.

I urge you to contribute to that discussion - and to have a strong view about what the government can do to help, and make your view known.

My own priorities are in several areas.

I think we need to incentivise R&D. We just don’t do enough in the private sector. Our government research and development is about average by world standards, and we commercialise more of our R&D than most countries.

What we don’t do is spend enough time on R&D in our private businesses. That is both a result and a cause of not putting enough emphasis on design in business processes. As one wag said, too much of our industry is structured around one set of Aucklanders selling haircuts to the people who they pay to mow their lawns.

So we need to promote awareness of the difference design can make.

When people see how success is achieved, they are inspired to emulate that success. If we think of our fashion industry, the success of labels like World and Karen Walker have helped inspire another generation of small businesses built on design and creativity.

A book like Michael Smythe’s will help inspire people and make them aware, too, so I welcome it. It can help us to see how design made a difference to creating the New Zealand we have today.

We tend to think that the way things are today is an inevitable result of history. Those decisions in our past are like water trickling downhill to reach an inevitable stream. But most of history is not inevitable - it is the result of decisions, and because you and I are all decision-makers, we can all influence tomorrow’s history.

We should not accept limitations on what New Zealand can achieve. We need to be fiercely determined to be better than any other country. We need to be prepared to accept failure on the way, and not punish those who try but fail. That is the environment where design can thrive and make a difference to our businesses.

It is an environment that is achievable in New Zealand, but it is not always what we do. Unleashing and exporting more of our creativity is immensely important to New Zealand. It is the only way we will transform our industrial base.

Smart investment in design can produce an enormous return in jobs, and higher incomes.

So I welcome this book’s contribution to that future, and I welcome the change it will help to promote in our attitudes to design and the difference it makes.

I wish this book, and its author, the success they deserve.

www.progressiveparty.org.nz

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