Launch of NZ By Design book

Launch of NZ By Design book - speech by Jim Anderton

Thursday, 21 July

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.

Anti-science government axes jobs

Future growth in the most productive parts of New Zealand’s economy will be reduced because of the Government’s decision to axe forty jobs at AgResearch, Opposition agriculture spokesperson Jim Anderton says.

“Our future prosperity and jobs depend on science and innovation, and the sector where innovation and science makes the most difference in New Zealand is the primary sector.

“But today the government is hacking off over forty jobs, mainly in meat and wool research.

“I thought when the government axed the $700 million Fast Forward primary sector and innovation fund that it was coasting in neutral. But this is actually going backwards.

“Fast Forward was meant to work in partnership with the private sector and with agencies like AgResearch to speed up New Zealand’s economic development. After it was axed, nothing has happened for eighteen months - that’s why demand for AgResearch’s long term research and development is falling.

“Farmers won’t carry all the costs on their own back. They need a commitment from government as well.

“Having canned the innovation fund, the loss of jobs announced today is the direct result of the government’s anti-science policies,” Jim Anderton said.

Research and development: from Fast Forward to slow and slower...

Column for Canterbury Farmer

One of the strangest moments in the last election campaign was when the National party announced that it would abolish the Fast Forward Fund, and cut tax incentives for our most innovative businesses prepared to invest in research and development in agriculture.

Unfortunately the National-led government has kept that promise, and we're now facing a crisis in funding for research in the primary production sector.

Fast Forward came out of the 20/20 Summit I hosted as Minister of Agriculture at the end of 2007. A key recommendation of the gathering was to create a dedicated fund to finance research and development. The goal was to take each stage of production, from the production of the raw product on farms, to manufacturing and ultimately to markets here and overseas, and to add value at each stage.

In 2008 we announced the launch of the Fast Forward Fund with the intention of using it to catapult the New Zealand economy into the future.

We had a model where the funding was shared between government and the private sector. The Crown made a commitment to put $700 million up front into the fund which was matched by a similar amount from the private sector.

We had a joint Crown/private sector board to oversee the investment and the allocation of funds which was to have a life span of at least a decade to give certainty over a decent period of time.

The Fast Forward was placed under the management of three independent ‘Guardians’ who would invest it. Treasury and MAF estimated that the Fund plus interest would reach $2000M over a ten-year period.
  The National-led Government cancelled the Fund.

The Fast Forward board had already held four meetings and was developing its overall strategy and the principles to be used to oversee the allocation to programmes and projects. Suddenly it was stopped and the initial investment from the government of $700 million plus $15 million of interest that it had earned, less the costs of getting it established, was returned. 
  Minister of Agriculture David Carter has replaced Fast Forward with the 'Primary Growth Partnership’ (PGP) which is apparently now 'up and running' with $30 million to spend in its first year and a total of $160M over the next three years.

Hon. Carter has yet to tell me how many research project proposals the PGP has received, nearly twelve months after Fast Forward was already working.

This is a huge opportunity lost. We are already facing a crisis in research and development. Meat & Wool New Zealand has announced it will stop any wool-related activities because of the loss of the wool levy in the recent referendum. This means there is no more money to fund the research and development of our wool based products. 

The recently established Government Taskforce needs to give hope to the wool sector that there is a plan to increase the demand for our wool with a lift of prices for the producers, particularly for the coarse wool sector where research is so badly needed. Companies, like Ice Breaker using fine wool merino are already world leaders when it comes to making the most of research and development to expand their markets.

Finally, though, what the primary production sector really needs is not government taskforces; it needs money to fund research and development, and it needs the certainly of knowing that funds will not be taken away arbitrarily by politicians or government departments. 
 

Huge cuts in primary sector science

Nearly as much is being cut out of science and research in the primary sector as the government is investing in infrastructure, Opposition agriculture spokesperson Jim Anderton says.

The total value of primary sector science investment falls from $2 billion in NZ Fast Forward under the last government to as little as $1.2 billion now.

Like for like government spending over ten years falls from around a billion dollars in the NZ Fast Forward Fund, to $610 million in the government’s replacement.

“With matching private sector funding, the total investment in primary sector research and development falls by $800 million, or about 0.4 per cent of GDP.

In addition, the government has not replaced a cent of the cancelled research and development tax credit. Overall, the government is cutting innovation spending by more than the value of the personal tax cuts.

“This is huge cut in science and research. It is a disaster for the future of New Zealand’s economy,” Jim Anderton says.

“Other developed countries are preparing themselves to come out of recession stronger. New Zealand is preparing by switching from science and research to poltergeists and UFOs.

“The government promised the primary sector it would spend more on science and research. It has broken that promise as surely as if it has broken its promise on personal taxes.”

May Edition of Jim's eNews

Budget Day 09 - Huge cuts in primary sector science
28.05.09
Nearly as much is being cut out of science and research in the primary sector as the government is investing in infrastructure.

The total value of primary sector science investment falls from $2 billion provided for in NZ Fast Forward under the last government to as little as $1.2 billion now.

Like for like government spending over ten years falls from around a billion dollars in the NZ Fast Forward Fund, to $610 million in the government’s replacement. “With matching private sector funding, the total investment in primary sector research and development falls by $800 million, or about 0.4 per cent of GDP.

In addition, the government has not replaced a cent of the cancelled research and development tax credit. Overall, the government is cutting innovation spending by more than the value of the personal tax cuts.

This is huge cut in science and research. It is a disaster for the future of New Zealand’s economy.

Other developed countries are preparing themselves to come out of recession stronger. New Zealand is preparing by switching from science and research to poltergeists and UFOs.

The government promised the primary sector it would spend more on science and research. It has broken that promise as surely as if it has broken its promise on personal taxes.


Winter rebate from electricity companies would be appreciated
22.05.09
The knowledge that many elderly New Zealanders huddle under blankets rather than turn on unaffordable heating should be a wake-up call to the power companies to return a winter rebate to their consumers this winter.

For many New Zealanders, this wintry weather brings on a bitter struggle with the cold and the dilemma of whether they can turn on a heater or not. Low income households, the elderly and students fear their electricity bills and well they might. I remember when the electricity bills came every two months – now the monthly bill is the same – or more – than the bi-monthly one was.

The Commerce Commission’s investigation into the wholesale and retail electricity markets showed that the electricity companies have not breached Part 2 of the Commerce Act but their extra $4.3 billion in earnings from 2001 to mid-2007 reveals they are charging with a take no prisoners mentality. The electricity companies’ profits are at the expense of New Zealand’s most economically vulnerable.

Since 2002, I have pushed for a return to consumers of some of the big profit increases from the state-owned power companies to help them with winter power bills. Low income households could be given $200 toward winter heating costs and power companies would still contribute as much to the government as they did last year. $200 would mean some households had a month of relief from winter heating costs. For superannuitants, beneficiaries and people who have lost their jobs in the downturn, it would make a huge difference.

The Commerce Commission’s ruling on the power companies should not be seen as a sign off for a return to business as usual. I am sure that New Zealanders would be hugely relieved to see the companies acting in the interests’ of their consumers with a winter rebate during this winter.


Comment on economics and the recession Response to Daniel Silva’s article in the Country-wide magazine

21.05.09
So Daniel Silva thinks that the current international recession isn’t going to affect New Zealand much.  Well that’s all right then?  Actually – no. 

He’s quite wrong to think so for two significant reasons quite aside from the fact that any nation which earns its living as an international commodities trader is going to be affected by what happens to purchasing power in our major markets.See website for full response


Aucklanders should have elected, not appointed leaders

19.05.09
Letting Auckland vote would be a better way to make appointees to the Auckland super city transitional agency than a secret process in a government where decision-making is melting down.

Why is the government even appointing a board? The way we find people to run local government in New Zealand is we have democratic elections.

A government that listened to New Zealanders would not have a problem making a choice of leadership. The people do the appointing for it. In a democratic election, you are much more likely to get leadership that looks like Auckland. National seems interested only in leadership that looks like the National or ACT Party.

I am very concerned that the quality of decision-making in the government is falling apart as the pressure of actually governing comes on. The National government is making poor decisions or refusing to make them at all. It created a sense of urgency for itself over Auckland’s super city, and now it can’t even meet its own urgent timetable.


Needle Exchange Programme proven it worth

19.05.09
On the 21st Anniversary of the Needle Exchange Programme (NEP) - and the 4th year of the free one-for-one exchange of needles, I again would support and expand a needle exchange programme that provides free needles for intravenous drug users.

The Progressive Party successfully bid in 2004 for $4 million over four years to fund free-to-users, one-for-one exchange of used needles because we wanted to minimise the harm caused by drugs”.

Back in 2002, I was appointed as the Associate Minister of Health and the minister responsible for drug policy. I received an independent review of the needle and syringe exchange programme. It reported that the programme saves lives. It said the programme saved - back then, seven years ago - $35 million in treatment costs since it had been established.

The report said plainly that the needle exchange programme reduces the harm caused by drug use. It told me the programme had helped to prevent twenty deaths from AIDS and more than two thousand cases of Hepatitis C and HIV/AIDS.

When you get a report like that in government, you sit up and take notice.
It makes a pleasant change from all the doom and gloom about things that don’t work. Here was clear evidence of a programme that worked.

There were people who sneered at that as liberal political correctness. I can tell you from personal experience there aren’t many votes in being wise or liberal about this stuff. But it was then, and is now, the right thing to do anyway.

The results have been very worthwhile. Obviously, I wish we didn’t need this programme. I wish we didn’t have drug use causing the harm it does, wrecking the lives of many people, and wrecking many communities.

But it does happen. It will keep happening. And if we care about vulnerable victims then our responsibility is to reduce the harm to them as much as we can. The needle exchange programme does just that and I endorse it for that reason.


Anderton brands Auckland bill as the “Removal of Democracy” bill

18.05.09
The Local Government (Auckland Reorganisation) Bill which will usher in Auckland’s “supercity” should be renamed the Removal of Democracy Bill.

The Local Government Act would have given Aucklanders a say in one of the most significant changes in local government in their region that they will see in their lifetime, but they are not going to have a chance to have that say.

In essence it is a great leap backwards to the days when 21 out of twenty two councillors lived east of Queen Street. It was the reason why a ward system had to be introduced so that all Aucklanders could actually be represented on their own Council. The conservative right-wingers have always resented that change and this proposal returns Auckland to the past they have always hankered after.

In real life terms it means, for example, the end of free swimming pools for the kids of South Auckland and any other future say for most Aucklanders in the way they want their local communities to deliver for them.  Does anyone believe that those pools will continue to be free under the government’s proposal?  I can already hear the self appointed Mayor of the super city, John Banks, making speeches about why the ratepayers of Auckland City shouldn’t be subsidising the swimming pools of south Auckland. 

I support a strong regional government for Auckland.  There used to be one – the Auckland Regional Authority (ARA) and I know about it because I was elected to it in 1977. We bought all the major regional parks and replaced the entire ancient bus fleet with new Mercedes Benz vehicles. 

In 1989, the Labour government replaced the ARA with the Auckland Regional Council (ARC). In 1992, the then National government wanted to sell the Ports of Auckland and the water services, so they diverted ownership of these and other profitable assets into the newly established Auckland Regional Services Trust (ARST) with the plan to sell. What a shambles that would have been if it had been allowed to happen. It took all of the strength of the political group I led at the time to put a stop to that.  Auckland has reaped the benefit ever since,” Jim Anderton said.

Now they’re having another go.  This is a privatisers’ dream to sell the community assets of Auckland, and is entirely in line with Rodney Hide and the ACT party’s ideologies.  Does anyone believe that this is in the best interests of Aucklanders? 

You can understand in those circumstances why the National ACT government doesn’t want people to have a say as to whether or not they want this outrageous piece of community destruction to go ahead.
 
Tribute to Senior-Constable Len Snee
12.05.09
I join with other party leaders in expressing my deepest condolences to the family of Len Snee. I too wish a speedy and full recovery to the injured as they lie in their hospitals.

I send my best wishes to their families who must be desperately worried as they pray and wait at the bedsides of the fallen.

Maybe the most sombre thing we do in Parliament and government is send men and women into danger on our behalf. We send them out knowing that sometimes, on our darkest days, they won’t come back alive. When we send them out, we send them to defend New Zealanders. They are there for us.

They go out as our bravest, and when they fall, some of us all falls with them.

Every police officer knows that they go about their duty on every apparently normal day, with danger and unpredictability lurking. They take on that danger on our behalf. We can never repay sufficiently our debt to them, and we can not begin to repay the debt we owe to those who give their lives for us.

Most of us have learned a lot about Len Snee in the last few days. We learned about his professionalism as an officer. We learned about his popularity in his community. So I pay tribute to him personally and I hope his family, as they grieve, can find some small condolence in the respect and admiration his country is expressing.

I hope New Zealanders will show respect by declining to seek political mileage from this death while this wound is still so raw.
It is very easy to exploit the strong emotions we all feel over a tragedy like this. It is easy, but it’s wrong.

I want to congratulate the prime minister, and say I agree with his reaction when he said he was not going to be stampeded into a call for arming the police in their day to day operations. That was the right response. There will be lessons to be learned from this tragedy, and we will all have to reflect carefully on them. But the time for making political points isn’t here yet.

I am sure the family of the murdered officer are not yet ready to have him used for point-scoring about guns, nor for political mileage about drugs nor crime, nor about policing, nor mental health, nor any of the other issues that will inevitably give us pause.

This is a time to give thanks to the men and women whom we ask to protect us, to share the grief of Len Snee’s family and friends, and to express our strength as a community that comes together and makes our bonds stronger when we are confronted with tragedy.


Launch of the Finsec Banking petition
05.05.09
I would like to express my support for the Finsec petition, and for the retention of New Zealand jobs. Banks in New Zealand have been making enormous profits by mistreating customers and exploiting staff.  
In the current global financial situation - the overseas owned banks in New Zealand are some of the most profitable in the world.  
But they are still firing staff.  
It’s time for them to give something back. It’ time for them to support New Zealand as good corporate citizens.  
The taxpayer is giving the banks a crucial government guarantee. The government is right to do so. The banks need the guarantee to keep functioning. In a crisis, New Zealanders should be prepared to help each other out. And we should be prepared to use the power of government to make our economy stronger.  
But there is a quid pro quo. It is perfectly reasonable to ask that in exchange for getting support from New Zealanders, the banks should, in return, support New Zealand in general and their own staff in particular.

MPs should not be able to fight by-elections 
05.05.09
It’s a farce that sitting MPs are standing for election to parliament. I am drafting a members’ bill to stop MPs from standing for parliament in by-elections. In Mt Albert, there are three MPs standing for parliament. They are already MPs. If they want to represent the electorate, they already can. Any list MP can open an electorate office in Mt Albert and be a good representative.  
What those MPs are really doing is using their parliamentary salaries and resources to bring in someone on a party list who has nothing to do with Mt Albert. For example, if the National candidate were to win she would be an MP just as she is now. But she would bring in a new MP who virtually no one has heard of, and who might never have visited Mt Albert in his or her life.  
MPs who contest the seat but lose bring MMP into disrepute. Since there are three MPs contesting the seat, at least two of them have to lose and maybe all three will lose. If they are going to test their mandate, they should be prepared to live with the result.  
In a general election, no MP has insurance. They have to get enough votes in their electorate or for their party, or they are out. It’s a democratic farce to have different rules in a by-election.  
A simple bill that stopped a sitting MP standing in a by-election would force MPs to make a meaningful choice - if they really want to contest a seat, they should resign from parliament  and contest it on the same basis as anyone else.   
MPs shouldn’t fight a parliamentary by-election while they’re drawing a full parliamentary salary.