How New Zealand Tamed the Great Depression

Gordon Dryden is a Kiwi friend of mine. Born in 1931, he dropped out of school at age 14 and went on to become — as he puts it — a legend in his own mind. He lives in Auckland and is co-author of UNLIMITED: The new learning revolution and the seven keys to unlock it.

Below the fold you will find an article adapted from a presentation by Gordon to New Zealand Futures Trust, Wellington, on March 17, 2009. As Gordon writes in an email to me, “The first bit might remind you of parts of India today – and the second half: other parts of India today.”

Gordon has been fairly regularly mentioned on this blog. The first mention is from Aug 2005 in “Even Hell has its Standards“, “New Zealand According to Gordon Dryden” and “Gordon’s New Zealand.” After a visit to Mumbai, Gordon’s guest post, “Gordon Dryden on India“, appeared in Dec 2006. Finally from April 2007, there’s “Dryden on Intelligence.”

So here’s Gordon once again, displaying his characteristic wit, wisdom and infectious enthusiasm for the subject at hand:how to make the future better than it is today.

How we tamed the great depression and seven keys to unleash a different future

When I was born, in 1931, the Great Depression gripped the world.

Where we lived, in the Catlins sawmilling district of South Otago, not one home had electric light. Tap water trickled from a corrugated-iron tank. We bathed once a week in an out-house copper tub. Our sole outside long-drop toilet teetered over a sawmill creek. We had no movies, no television, no night clubs. My family never owned a car. But the village of Tahakopa — at the end of the now-defunct Catlins railway line — did have a small free library, tucked into a tiny church hall next to the blacksmith’ shop.

In an isolated nation of 1.5 million people, almost 80,000 men were soon to be unemployed. Exports dropped by 40 per cent. A conservative government seemed powerless to act.

The United States was even worse off. At the height of the depression, one worker in four was unemployed. Not until the outbreak of the 1939-45 world war did it fall below 20 per cent.

Yet by 1938 New Zealanders out of work had dropped to 14,000. By the start of the war: to almost zero Unemployment did not exist here for the next 30 years. Even by 1978 fewer than 1 per cent were out of work.

For much of those intervening years New Zealanders enjoyed one of the three or four highest living standards in the world. Our annual productivity increases were consistently in the top three. We might have tolerated the world’ worst liquor licensing laws and most boring restaurants. But we did so many things right: the only county to turn a one-crop economy — in our case, grasslands farming — into a global success story.

Our lumber pioneers created the world’s biggest man-made forest, planted on barren pumice land. That set the base for the booming pulp and paper industry; in the 1950s, its productivity increase topped the world. Our farm-scientists pioneered new breeds of sheep, to produce great meat and wool. New farm milking sheds and bulk tanker collection of milk from farm to co-operative processing companies doubled the productivity of our dairy farms. The world’ first automated milk-powder processing factory sparked the explosion of other dairy exports. Scientists at Ruakura and Massey research institutes poured out innovations. Aerial top-dressing — spreading fertiliser from New Zealand-made planes — turned mountainous tussock country into giant productive sheep farms. We became world leaders in the production of clean, cheap hydro-electric power, as dams were built, first along the Waikato River and later in South Island’ Clutha and Waitaki rivers.

And behind it all, from the mid-1930s, when the recovery began, lay the combined massive state house-building — from all-New Zealand materials — and highway-construction programs. State housing alone spurred the growth of protected manufacturing industries — from Fisher and Paykel’ whiteware to the all-wool tufted carpet.

The late thirties, forties, fifties and sixties were magic years of hope and modest confidence. Along with Sweden, Norway and Denmark, New Zealand successfully led the world out of the great depression — what others achieved by wartime mobilisation. We even seemed to take it for granted that our rugby teams were generally the best — and that, in one blistering era in the sixties, four male athletes living within a mile of coach Arthur Lydiard’ state house in Mt Albert could own either every world middle-distance running record or their Olympic gold medals.

Now, as the world cowers from the second biggest financial collapse in history, amazingly all the things that 1930s utopians dreamed about are now possible. But can we do it again — and in the same way?

The answer, I suggest, is two-fold: yes we can with the same spirit of innovation and early adoption (as we were among the first to fully adopt refrigerated shipping and containerisation, and tourism became one our two greatest export earners as we cashed in on the wide-bodied jet). But: no we cannot do it in the same way, in a world that is dramatically different.

Seven new catalysts are now converging to change virtually everything: just as the disrupting technologies of the printing press, steam power, electricity, the mass-produced automobile, television and the silicon chip have transformed previous eras. Today’ disruptive technologies: the silicon-chip-based doubling of computer power every 18 months, with no increase in price, and the converging technologies of instant, often free, global communicartons.

The seven resulting keys to unlock the future are simple but revolutionary. And they give small societies, like New Zealand, Finland, Sweden, Denmark and Singapore, as much opportunity to prosper as the innovative ecology of Silicon Valley has changed America today, and our innovators did around 70 years ago in even tougher times:

KEY 1: It’s global. Virtually everyone on earth now has the opportunity to plug into a digital global market. Tiny Singapore, with the same population as New Zealand but crowded into an area the size of Lake Taupo, and with few natural resources, has attracted over 3000 international companies to set up there. Singapore also runs the world’ best airline, has the world’ finest airport, one of the planet’ best rapid rail transit systems, and a community linked by blazingly fast broadband.

KEY 2: It’s personal. Even nine years ago, half the people on earth had never placed a phonecall. Only 12 per cent owned mobile phones. Now almost 3.5 billion have them. By the end of 2009: 4 billion. In Finland= , the former Nokia gumboot and lumber company is the world’ biggest producer of the new mobile phone-camera-multimedia computer in your pocket. Better still, everyone has a talent to succeed at something and now has the chance to sell that talent to niche markets around the world. What an opportunity to take the talents of New Zealand’ brightest grandparents, marry them to the interactive-technology skills of their grand children and turn them into personalized learning programs to sell to a global market.

KEY 3: It’s interactive. Only a few years ago I was battling with New Zealand’ sole state television channel for the right to run a second one. Now well over 100 million people, in many countries, create their own multi-channel global TV network every day: on YouTube — a concept that did not exist five years ago. Now, in a typical month, YouTube notches up 5.6 billion separate video-views. And most of the best are similar in quality to the New Zealand TV-commercial cameos that win world awards (not to mention the model of Peter Jackson whose innovative genius has turned sleepy Wellington into a world movie capital).

KEY 4: It’s instant. Eleven years ago, Google didn’t exist. Now it can scan billions of websites in half a second and provide instant answers to 300 million inquiries a day, plus instant access to maps and email. For around $1 to $2 a year, Atomic Learning can provide each student in any school with access to 30,000 video tutorials, on how to master the world’ most important computer software programs. As Google CEO Eric Schmidt says: What does it do to teaching when every student (with the equivalent to an Apple iPod) can do the answer quicker than any professor can get it out of her mouth?

KEY 5: It’s often free or almost free. Over 300 million subscribers now make free international phone calls everyday, and view each other as they speak, through Skype on each other’ computer screens. Google provides all its information free — but sells its associated, relevant sponsored messages, often as low as 5 cents a click. China has slashed laptop computer prices by up to 90 per cent selling them without an operating system and letting buyers download a free open source system from the Web.

KEY 6: It’s easily shared. Wikipedia is now by far the world’ biggest encyclopedia, with well over 10 million articles in English alone, compared with Britannica’ 80,000. Yet all Wikipedia articles are contributed by passionate specialists on their own subject — and extended by others, free.

KEY 7: It’s co-creative. If we can dream it, we can do it — together with millions around the world. And this is probably the most important of all, especially in a small country where co-operative enterprise and No. 8 fencing wire innovation has always been a treasured trait. Wikipedia, Google, YouTube, MySpace, Flickr, Facebook and other online co-creative social communities are only the beginning.

Each has created an interactive global platform to unleash the talents of millions. And each is based on all seven catalysts for change. (Barack Obama even won a landslide election by unleashing a similar platform.)

Now that’s a real challenge, even greater than the thirties.

And if one New Zealander — Prime Minister John Key — can come up with concept of a national cycle trail to help build tourism and employment, imagine the results if we unleashed the talents of 4 million others. And instead of a nine-day fortnight, imagine following Google and involving all New Zealanders in spending a fifth of their working week creating new ideas.

Then imagine if we created a simple interactive platform to share those ideas and promote the country that has unleashed them — tapping into the experiences of two million satisfied tourists a year Wow!

Note: When C.E Beeby became New Zealand Director of Education, on Peter Fraser’ invitation in the late 1930s, he transformed primary schooling by bringing to New Zealand, for a series of conferences, the world’ most stimulating innovators. What would happen today if we invited the founders of Google, Apple, eBay, Yahoo, Facebook, Flickr and YouTube? Education Minister Fraser attended all the regional conferences. But he spoke at none. Instead, he listened, crystallized the messages. And then acted. Now there’ a great idea: applying the best from everywhere.

“Applying the best from everywhere.” Couldn’t agree more.