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23

Jul

Breakfast with ICT Minister, Amy Adams

Minister outlines plans to drive growth of ICT sector.

Last week the newly-named Institute of IT Professionals (formerly the New Zealand Computer Society) held its first event, inviting ICT Minister, Amy Adams, to talk to a breakfast audience about the government’s priorities in the ICT portfolio over the next couple of years. The session brief promised an unveiling of strategic priorities – covering everything from the much discussed (and possibly little understood) Ultra-Fast Broadband and Rural Broadband Initiative projects to topics such as skills, education, government procurement, exporting and digital literacy.

Hon. Adams met the brief head-on, addressing each one of these points candidly, speaking about the worth of the ICT sector to New Zealand and the government’s responsibility to better safeguard and promote it. It was refreshing to see a complete lack of lily-gilding in Hon. Adams’ presentation of her portfolio’s plans; and that she wasn’t afraid to speak honestly about or turn a critical eye to areas of poor performance on the part of government in engaging with the ICT sector, in its own use of ICT and in recognising and promoting ICT in the interests of increased productivity and a return to economic prosperity.

The upshot: there’s plenty of ICT activity afoot – from plans for a “fibre future” to significant disruptions to the status quo within government. As a newcomer to the portfolio, and to the more technical world of ICT in general, Hon. Adams seems to take a pragmatic, no-nonsense approach to her responsibilities. She noted two overarching focus areas within her mandate: the need to improve New Zealand’s connectivity and digital literacy, and to address gaps in the ICT sector.

The audience came away from the session appraised of a decent-sized list of plans, perhaps assured of ICT getting a reasonable amount of the government’s mindshare over the next two years. But there was something in Hon. Adams’ messaging that reminded me of something else – a rhetorical echo of something I couldn’t quite put my finger on. But by yesterday afternoon – quietly pleased at my mental detective work – I’d figured it out. What Hon. Adams’ messaging brought to mind was the late Sir Paul Callaghan’s Chancellor’s Lecture address, held in Wellington in September last year. Specifically it was the acknowledgement that New Zealand desperately needs to improve its productivity, and to do this – to use Sir Callaghan’s words – we need to look to activities that provide high value, high profit margin and high knowledge content. And what better place to meet all these criteria in one fell swoop than the ICT sector?

Sir Paul Callaghan

Image source: www.vuw.ac.nz  

 

Without going into too much detail, some key points and themes from last week’s session (interspersed with some of Callaghan’s thoughts from his September address):

 

The importance of ICT to New Zealand

People need to realise how “successful, important and diverse our ICT sector is,” Adams says. The trouble is, however, that typically our heroes in this area “just get on and do it, with no real song and dance,” and consequently the significance of the ICT industry – and the extent of our good work here – goes under the radar.

And just how significant is the ICT sector, exactly? Adams tells us it’s a $20 billion a year industry, employing 40,000 people, with $5 billion in yearly exports.

 

Sustainable prosperity

Echoing Sir Callaghan’s message, Adams stressed that we’re not trying to mass-produce widgets. Rather, the legacy of our number eight wire mentality and our size put us in a strong position to be “innovative, agile and niche” providers of ICT solutions.

Or, as Callaghan put it, we need to keep doing the weird stuff, and doing things with our brains. He argued that New Zealand occupies itself with low-wage activities – we run a “McDonald’s economy” – and pointed out that in the OECD there are only two countries with lower productivity than ours: Turkey and Mexico. Even Greece ranks higher than us in the productivity stakes.

Callaghan pointed out that, in fact, dairy is our area of greatest productivity. The problem is, though, when it comes to our ability to plunder natural resources, we’re reaching our limits. To run with the dairy scenario alone, to get to where we need to be we’d need four times as many cows. And yet there’s no way our environment could accommodate or sustain this.

He said: “We’ve become a country like Singapore or Japan or Switzerland without resources, where we have to – if we’re to grow prosperity – start to do things with our brains, because we can’t keep on pillaging resources. We can’t keep on taking stuff out of the land because if we do we’ll destroy what we value in New Zealand.”

And the advantage of New Zealand being so small, Callaghan argued – only 0.2% of the world’s economy – is that we stand to gain hugely from doing “strange little niches.” 

“The world’s economy is 500 times bigger than us,” he said. “And what that means is that there are little pieces of it out there that are far too small for General Electric, Apple or Samsung to even bother with. You grab a piece of that, and you’re so tiny, [and it] can be really big for you.”

And the beauty of growing our economy through grey matter – rather than by orchestrating a cow epidemic (for example) – is that it’s clean and it’s scalable.

“The great opportunity with these companies,” Paul stressed, “is that they don’t produce greenhouse gases; they don’t put nitrates into streams; they don’t require energy; they don’t require land. They are completely environmentally benign. And there is no limit to the number of companies like that that you can have.”

Callaghan’s observations on this front are particularly noteworthy to Intergen because we have a vested interested: we are one of these companies. Exportable wares of the ‘grey matter’ variety (i.e. software) are a crucial part of our stock and trade. In the last financial year our work for Microsoft Corporation, based in Redmond, Seattle, represented more than 6% of our revenue – and it’s a number that grows year-on-year.

To Paul’s mind there are two crucial things needed to grow this brain-led activity (and, in so doing, help coax our economy back to health): research and development and entrepreneurial genius.

“You gotta do weird, and you gotta find the niches,” he said. “And that requires entrepreneurial genius and understanding of how to meld the technology skill and engineering skill to the market opportunity that you’ve seen.”

 

The government’s action plan

How are we – and by we I mean New Zealand’s government – going to support and foster this growth? Here’s the (greatly abridged) action plan:

 

Ultra-Fast Broadband

A $1.3 billion undertaking, the UFB project is an eight-year “transformative” programme. “It’s not just about putting cables in the ground,” she says. These cables are symbolic of significant future gains in GDP.

One year in it’s tracking well, with a “slow but exponential” growth curve and UFB brought to 70,000 premises (in excess of the one-year-in target). Schools, hospitals, businesses and government are the focus for early uptake, as this is where key productivity gains can be made, Adams says. She warns that, as with any long-term project, it will take time to gain critical mass, and then, towards the end of the eight-year timeframe, things will start to happen quickly. She spends a lot of time managing expectations, she says, and getting the community to understand it and know how to use it will be crucial to its ultimate success.

 

Rural Broadband Initiative

Adams observed – jokingly, but making a clear point – that as a Cantabrian largely working from a provincial address, she has to be the worst connected ICT minister anywhere, ever. As part of the eight-year programme, the RBI seeks to redress the balance in the connectivity-starved provinces, bringing broadband with a minimum speed of five megabits/second to 86% of rural New Zealand.

 

Transparency and normalisation

As digital becomes the “absolute norm” it’s important that we make sure we know exactly what products, packages and pricings are, and what they mean, Adams says. We need to normalise the use of these products, making them understandable to the wider community. While the digital world (and the plethora of products it creates for its consumption) is self-explanatory to a select few, we have a role to play in embedding New Zealanders’ digital literacy through a conscious ongoing effort to educate and demystify.

 

Security

Despite its many advantages, the world’s relatively recent digital ubiquity “is not all milk and honey – it has a dark side,” Adams says. We need to know that our data – both personal and the country’s IP – is secure and safe, and a strong cyber security framework is imperative.

 

Producing digital content

Adams acknowledges that this is the area where the government has the least direct influence, relying on a wide range of sources, including the ICT sector and the media, to create our digital content. The government’s role, therefore, will be in a support capacity, helping ICT companies by being more effective and easier to deal with.

 

Skills and innovation

The ICT portfolio has a particular focus on skills and innovation, and a plan to “sort out the skills pipeline into the IT sector, exposing students to enough of a story around IT to entice them into careers in IT,” Adams says. Energies here need to be directed both at a secondary level – through greater promotion of IT as a career option – and at the tertiary level, by refocusing institutions to careers that will provide for New Zealand’s future. To this end, the government has earmarked $159 million for engineering, science and research-led learning.

 

Government efficiency

Adams pointed to a real need for the government to improve how it engages with the ICT sector and also how it buys its own IT. She states that ICT efforts at the government level “have not been cohesive,” and that, while government spends a “poultice” of money on IT, “we often don’t spend it well and we don’t get good outcomes – and that’s our fault.”

The formation of the new Ministry of Business, Innovation and Employment (MoBIE) is a step towards “joining up our thinking,” Adams says. 20 days in “and we’re already finding it’s helping us to focus around a particular sector,” she adds.

The new Advanced Technology Institute (expected to be fully in operation by December) – the government’s “flagship innovation engine” – is another step in the government’s journey to fostering innovation, and we’re told the business community holds “high hopes” for it.

The Open Door to Innovation is another initiative to bridge any gaps between the public and private sectors, making it easier for the ICT sector and government to engage and helping to “achieve the future of government ICT.”

Several of the government’s recently announced 10 planned results areas relate directly to ICT efficiency. But perhaps the most bold (outside of the establishment of MoBIE) of these is this:

Improving interaction with government.

Mission statement: New Zealand businesses have a one-stop online shop for all government advice and support they need to run and grow their business. 

Specific goal: By 2017, an average of 70 per cent of New Zealanders’ most common transactions with government will be completed in a digital environment – up from 24 per cent currently.

 

In terms of better engaging with the ICT sector and helping to foster its growth, Adams says: “In the public sector everything is about following a well-trodden path. We need to help people to get on this path.” The answer to this, she says, lies in providing scope for organisations to deliver “smaller scale, more creative, easier, low risk projects.” In doing this, the barrier to entry is lowered and innovation can be fostered further down the food chain, helping ICT companies to build valuable experience in contributing to government-led projects.

 

Commercialisation of government data

“We have a huge asset in government data,” Adams says, “and there’s a massive opportunity to commercialise that data.” The government is keen to see the ICT sector taking this data and running with it, and has no intention of “clipping the ticket.”

 

What happens now?

There’s plenty on the government’s ICT to-do list, and there’s plenty going on in the ICT sector, however invisible this activity may be. In the words of Sir Paul Callaghan: “It’s happening, people!” The interesting thing now will be to see how the next two years unfold.

 

Posted by: Katy Sweetman, Marketing Director, Empired Group | 23 July 2012

Tags: Amy Adams, ICT Minister, productivity, Sir Paul Callaghan


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