Ben Fahy: So Hutch, you’ve just finished a thesis on innovation – and innovation particularly in New Zealand. Can you run us through a summary of that?

Mike Hutcheson: Well, it’s interesting because I thought it would be a slam dunk initially that Kiwi Ingenuity rules the world, but when I started drilling down, it wasn’t quite as clear-cut as I first thought. I thought that this notion that we’re all brought up with about Kiwi ingenuity, and number eight wire means that we are, like the All Blacks, world champions, but when you actually start looking at them, there’s not much there. After you get past splitting the atom, what you actually did in Manchester, of course, rather than in New Zealand, you come back to the disposable syringe and Gallagher’s electric fence. They said Gallagher’s invented the electric fence, they didn’t. They actually invented the movable electric fence, the yanks had been worrying about electricity to prison walls for years before that.

Don’t tell me Pineapple Lumps came from somewhere else.

Yeah, one of the great breakthroughs, of course, in confectionery came through Pineapple Lumps and the Pavlova. But we actually funnily enough do well in social change. Of course, we gave women the vote first and then nuclear free and the 40 hour week all came out of here, so we do lead the world in some areas of social change.

Innovation is a broad palette, but was the finding that there is a mythology around that in New Zealand.

To me, innovation is a compound word. It’s a compound of innovation and implementation. I think that in that sense, we’re actually quite good because we’re in the bottom right-hand corner of the world, and for years away from our markets, but so we had to make do. But that’s the problem: a lot of our innovation is making do, and until recently, we’ve been lagging behind in high tech output in particular. By most of the international embassies on creativity and innovation, we’re up there in the top ten. For example, we’re the 6th in the world at publishing high tech research reports, but we’re 63rd in the world, behind Senegal, Bulgaria and Latvia at high tech manufactured output. And though high tech is growing fast, so it should, because we’ve been far too reliant on agriculture and economies, and we’ve got to look for more weightless exports.

Isn’t that an example of exporting IP instead of manufacturing things? I think we should be focusing on those high value products.

Yeag, but we export our IP for free. We publish it because universities get ranked, of course, by the publications, the academics, love publishing stuff. But we’ve got to figure out how we actually make something out of that. To me, I’m driven by Peter Drucker’s dictum that business has only two functions: innovation and marketing. Everything else is a cost. And yet, we live in a world that’s driven by finance.

I love the story of sliced bread, people talk about “it’s the best thing since sliced bread” and sliced bread was an abject failure for 20 years until it started being marketed by a company that had an interest in selling it. So before you’ve come up with the idea, you actually need to share that idea and get it into popular culture. Is that something that we may be lacking in as well?

Yeah, we don’t put enough faith in marketing. Marketing slipped off the top table, I think, in the late ’80s, early ’90s, after the big dotcom crashes and things got taken over by beanies and I think that is part of the problem, that most of the people in the world are not intuitive by nature and we love measuring things by what we can count rather than by what we can think. I think that you’re right, you can’t sell a secret, so you’ve got to put a lot of time and effort into reaching audiences.

So there’s obviously a mythology around New Zealand innovation, perhaps, that you’ve discovered. Is there also a mythology around the Eureka moment, the thing that sparks an idea that you have come to this realisation and a moment of clarity, or have you found that it is building on things that already exist?

Oh yeah, definitely, building on things that already exist. It’s impossible to think of something, or no one would understand you if you suddenly came up with a concept, they’d think you’re nuts and put you in the loony bin if you came up with something that had no context around it. Everything is really a development or an advance in something else that  standing on the shoulders of giants, as Isaac Newton said. You don’t invent stuff in a vacuum, and Ecclesiastes Chapter 1 Verse 9, there is no new thing

Steve Jobs was famous for saying, in his early days, great artists borrow if that’s quite right, the Picasso quote, great artists still. He changed his tune later in life, I think. But it does feel like there’s a need to reference the past to get to that point.

Bill Gates said that IP has the shelf life of a banana. I think that that’s so true, and what you’ve got to do is be first to market and get on with it. I think we need more support, Callahan did a good job in funding research in science and technology, but what we need is an equal amount of effort into funding marketing.

Ben: So Hutch, there’s plenty of innovation in the primary sector and we are very good at that, I think we’ve added over many years a whole range of expertise and we are now creating some value. There is still a lot of focus on commodity products, some would argue. Do you see that changing and moving into different sectors?

Absolutely. I think we have to do that. We have to think more of weightless exports. We have to think more about how we add value to our agricultural produce and now agricultural thinking, for example, Israel leads the world in irrigation technology, and we’ve got more water than they have, we should be doing that. Maybe the focus for us now should be focusing on the technology of water treatment.

Creativity also loves constraints sometimes, doesn’t it? When there are challenges to overcome and problems to solve, that’s often when it becomes apparent.

The best art works within a frame, on an easel, you don’t just scribble on the walls, you’ve got to have some kind of framework to work with and you’ve got to have some kind of constraints and some kind of brief and some kind of understanding of what problem you’re going to be solving and for whose benefit.

So from your vast experience, some successful, some unsuccessful, I imagine, unless they’re all successful, Hutch. Your story is probably they’re all successful, but…

Mike:   No, not at all, I’ve launched many ships, some have sunk without a trace, some have come home laden with treasure – my early wives got most of that.

Another potential pitfall of innovation.

Someone who is successful is someone who has won more often than they’ve lost, that’s all.

So what kind of things would you suggest to people who have an idea who are thinking about progressing that idea into a business?

I would say enroll at AUT because we’re about to launch the e-school, which is actually a paper initially for talking about the elements required for entrepreneurship and innovation. I don’t believe you can actually teach someone to be an entrepreneur, you’ve either got it or you haven’t. If you had a lemonade stand at age ten or had a paper route at age 15, you’re probably going to be an entrepreneur. If you didn’t have those things then you don’t have a sense of adventure and an aptitude for risk taking, then I’d just get a job and stay there. But I think that what we can encourage in this country is what we’re lacking in often, which is collaboration. Every time I’ve really been successful in business is because I’ve collaborated with others who have the skills that I don’t have, and I think that we need to learn to do that a lot more in this country because there’s a fierce independence that we have in our psyches as a nation. In fact, I heard recently that a study done in Dunedin, a PhD thesis on why there’s a higher incidence of bipolar disorder in this country than anywhere else and the thesis was that when people were shipped off at her majesty’s pleasure from England, the crooks went to Australia, the loonies came to New Zealand, shiploads of women in particular, maybe there’s a genetic strain of quite extreme bipolar disorder in this country, I don’t know what that incidence is, but I’d love to actually check the research. But you can kind of believe that because in this country, we all want to be our own boss. You’re not the boss of me, and there’s 487,000 small to medium businesses, small being the operative word, because people want to buy themselves a bit of a living and that is a problem. We need to learn to collaborate a lot more.

Are there any other cultural aspects of New Zealand that hold us back in an innovation sense? One of the things that we’ve done recently with Callaghan Innovation at Idealog is a project around failure and the stigma that attracts from often that doesn’t exist in other markets. Is that, do you think, one thing we’re not good at: dusting ourselves off again?

Yeah, we are. Because we’re in a small society, a fear of failure is sort of a problem because it sits with you. You can’t escape the fact that you fell over at something. But we should actually should just embrace that and move on. What we don’t do is fail fast. A lot of businesses hang on, hang on, hang on when they should just shut their doors sometimes because there is that kind of stigma because everyone will know because we’re a small country and everyone knows everybody else, whereas you can hide it in the States or you can hide it in Europe or the UK.

Or not even hide it as it’s often seen as a badge of honour or some battle scars that might help you learn from it.

Yeah, you could be right. I think there is more work and more research that needs to be done on our psychology of success in this country, and I’d love to do that, and the psychology of organisations. I think that we need to think far more deeply about the opportunities that we have in adding value to what we’re good at, which is growing food and distributing that to the world.