Science Funding Fix Obscures ICT Opportunity

It has taken almost a year, but the government is finally addressing the mechanisms and priorities around the funding of research, science and technology in New Zealand.

The government’s policy approach to funding science research hinges on maximising the economic and social benefits, building international linkages whilst protecting the natural environment. Better utilising the “scientific value chain” seems to be the chief driver behind the funding shake-up. Science leaders have long complained that they spend too much time doing paperwork and competing for funding, when their time is better spent doing actual science.

The draft policy document indicates that sectorial funding priorities will largely be governed by the interests of existing Crown Research Institutes (CRIs). That is not a bad thing, but it underlines what we have suspected for quite some time – ICT is no longer seen as a primary driver of value-added economic growth, despite its obvious importance as an enabler.

ICT is now bundled within “high technology industries”, although it is not clear what proportion of this funding will be dedicated to information technology. In fact “transformational manufacturing” seems rather to be the focus for this area. It seems odd that the government would allocate $1.5 billion to a broadband rollout without a simultaneous commitment to strengthening ICT research and commercialisation in order to capitalise on the opportunity.

You can read about and make submissions on the proposed policy here.

BB Build Begs Benefits

It is certainly a relief to finally see some leadership from the government in terms of their expectations around the broadband rollout. But in 5-10 years time when the project is finally complete will we have found a way to leverage this huge investment of public funds?

Industry ginger groups are being politely optimistic about the plan but it remains to be seen for how long the honeymoon lasts. Telecommunications is a highly political arena with many vested interests. Indications that the Crown Fibre Holding company will remain a Crown entity rather than a commercial state owned enterprise are certainly encouraging however; because the last thing we need is the new network being flogged off to an incumbent player or other foreign controlled interests at some point in the future.

But what are we going to use high speed broadband networks for once they are built? One would like to think that there will be more lofty social benefits than facilitating faster access to pornography, violent online games and moronic TV shows. Of course despite all the clamour by telcos and their equipment suppliers for a bite of the apple, we have never yet seen a properly articulated explanation of exactly what the social and economic return will be.

That aside, there is a wonderful window of opportunity for the government here. Surely we now need to provide an innovation challenge to stimulate the development of novel online services? Imagine how many creative new start-up companies could be kick-started. It seems glaringly obvious, but this aspect of the plan appears to have been somewhat overlooked as the government instead heavily promotes cowshit and tourism as our economic saviours.

There is another issue that has been overlooked as well. Until New Zealand gets access to better bandwidth and some decent competition on networks across the Pacific,  improving domestic connectivity is likely to have only a limited overall effect on economic growth.

The Digital Innovation Terminator

With the squashing of the R&D tax credit, the biffing of BIF and the annihilation of the Digital Development Council one could be forgiven for thinking the incoming government is auditioning for a role in the forthcoming Terminator movie. Of even more concern is a blatant lack of understanding about where the Internet is taking us, as witnessed by their trashing of the Digital Forum.

Don’t they get that distributed problem-solving by communities and networks is the way forward now? When the Minister states that the government will now consult individually with the parties concerned, what he really means is that he will open the door to the best corporate lobbyists around town. Joe public, small business and the creative sector won’t get a look see. The Digital Forum wasn’t perfect, but at least it gave voice to a wide range of users and producers of digital innovation and creative content.

The axing of the government shared network represents yet another another milestone in the government’s ideological war being waged on every last programme or initiative that had Labour’s brand on it. This leads one to the disturbing conclusion that the KAREN research network might be the next target on the chopping block. Established as a Crown entity, the network was supposed to turn a profit whilst delivering high bandwidth capability to the already under-funded research agencies and universities. But poor demand modelling and underinvestment in marketing new services left the network underutilised.

Given the already woeful levels of research, science and technology investment by government, it would be a disaster to let KAREN go. In fact the government should be fully funding its owner REANNZ as a matter of course, as part of a wider commitment to building up RS&T capability. The potential in terms of research and science outcomes from a properly wired and (socially) networked science and technology community has yet to be fully tapped.

Digital IP Strategy Needs More User Input Less Govt.

Last week I spent a day at the inaugural Digital Development Forum meeting, along with about 150 plus other well-meaning representatives of stakeholder organisations from the New Zealand ICT sector. One of the messages to emerge out of this meeting was that a lot of people are concerned about where the new copyright legislation is heading.

Almost everyone agrees that we urgently need to address the existing law, because it is woefully inadequate given the rapid changes in technology that are occurring. In fact the whole issue of intellectual property protection is receiving attention globally for this very reason. The current system doesn’t really work that well anymore, given the rapid rate of ICT innovation.

But the chief complaint with the New Zealand legislative changes seems to be that there is an imposition upon ISPs to police Internet use and to deactivate recalcitrant abusers and that the government has not listened to industry concerns. That is ironic because Digital Development NZ projects itself as being the industry mouthpiece in the ear of a government that is committed to listening to the industry.

So in a (rare) demonstration of unity the industry has asked that implementation of the legislation be delayed pending further input. But since the amendment to the Copyright Act Bill was actually passed months ago, one has to wonder whether or not these concerns were raised when the legislation was at Select Committee stage over a year ago. Or was the ISP policing clause inserted discretely afterwards?

In any event, the copyright legislation (and the DDNZ Forum) are unlikely to have any affect at all on teenagers and other so called “digital natives” whose lifestyles revolve around ripping off and re-mashing creative content from a variety of sources. Last week’s forum meeting was an invitation only event dominated by middle-aged public servants and well paid industry lobbyists in nice suits and comfortable shoes.

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e-Day Approaching

Perhaps the most useful outcome of my day at the forum was that I met Lawrence Zwimpfer, who is organising the nationwide e-Day event to be held on Saturday the 4th of October. e-Day is a great initiative that provides a free disposal and recycling service for owners of old or unused computer and cell phone gear. So there is no excuse for biffing all that obsolescent junk in the landfill.

They could really use some more volunteers to help out on the day in over 30 venues around New Zealand too! You can sign up here.

Developing a National Innovation Blueprint

Corporates such as Intel and Cisco naturally want to promote us becoming more e-enabled because there’s a buck in it for them. But large multinationals are the natural born enemy of innovation, when you think about patent litigation costs and the detrimental effects of technology cartels. So I take it with a grain of salt when I hear that they have been filling conference halls on the topic of innovation. 

Notwithstanding my cynicism, the idea of a national innovation blueprint is a good one. Improving broadband infrastructure would help, but even if we could open an electronic super-highway to the world tomorrow, it’s not a panacea on its own. The primary choke on opening up the commercialisation of technology in New Zealand is lack of capital, not lack of ideas or lack of broadband. There’s plenty of evidence to suggest that geographical proximity has a lot to do with investment decisions in the tech sector and for that we suffer. Hence the plea for high growth ventures to get offshore quickly.

Kiwis also hate divesting control and this is an additional barrier to growth. In fact we’ve already had this debate amongst the founders of our new venture as we begin to develop a product suite with global reach. The antidote is better education, more mentorship and good role modelling by other entrepreneurs who made the leap and succeeded without selling their souls. You can build a great business whilst still enjoying the lifestyle New Zealand has to offer.

Lastly, the vast majority of businesses will not receive any venture funding and may never grow beyond 5 or 10 employees. Yet, they pay tax regularly and put bread on the table of families. There is no certainly no shame in this. Perhaps one focus of a national innovation blueprint is that we need to better identify the really hot opportunities from amongst those hard-working small businesses and provide intensive practical support to build their value proposition and connect to the real world out there.

Why ICT Underpins Innovation

GITRA recent global report on information technology places New Zealand about the middle of the pack in terms of “network readiness”. But the index only accounts for part of the story about why the country is struggling to remain competitive through innovation.

The information technology report from INSEAD university and the World Economic Forum offers some very clear indications around what New Zealand has to achieve in order to boost innovation and raise competitiveness. The annual report ranks all countries in terms of ICT readiness by assessing a basket of factors that influence business, government and individuals. Quality of phone, broadband and server infrastructure, regulatory environment, quality of science education, R&D spend by firms and availability of venture capital are amongst the variables assessed to establish a “network readiness index” (NRI).

High network readiness alone does not guarantee success however. In fact highly competitive nations such as Finland, Israel and Taiwan rank slightly below New Zealand on the network readiness index. But if we consider a bunch of other factors that allude to innovative capacity, it paints a much different picture. Innovation factors (IF) include quality of scientific institutions, extent of university-industry collaboration, availability of scientists and engineers, number of patents issued per capita. These factors tell us whether or not a nation has the capacity to innovate through novel research, which is a far stronger value proposition than simple imitation. The fact that New Zealand ranks about the same as Zimbabwe is probably reason for some concern.

What we do know is that countries which rank highly on both counts, tend to be innovation powerhouses with rapidly improving GDP per capita. By this we mean nations such as Denmark, South Korea, India, Singapore and Malaysia. Unsurprisingly, all of these countries embarked some time ago on aggressive improvements to their ICT infrastructure. So exactly why does ICT appear to underpin innovation?

There are at least five good reasons why a sound ICT environment supports innovation processes:

  • Knowledge identification eg. market research, locating human resources, accessing science research, knowledge sharing platforms.
  • Developing creative capacity eg. computer aided design and 3D graphics.
  • Enhancing exploration eg. simulation and prototyping.
  • Shortening the design-test cycle eg. making failure inexpensive.
  • Improving capacity for commercialisation management eg. knowledge management, Web 2.0 e-marketing, virtual collaboration.
  • Empowering customer feedback into the design process.

The human genome project is a good example of a piece of innovation work that, a decade ago, could not have even been imagined anywhere in the world. Could such a project be done in New Zealand today? Although we now have a high speed research network and at least one homegrown firm offering suitable enabling software technology, it hasn’t happened because we are still struggling with a number of the innovation factors mentioned above. R&D spend is low, collaboration seems problematic rather the accepted norm and the education system is failing to inspire a new generation of scientists and engineers.

This shows that, as an enabler of innovation, we cannot consider ICT in isolation. There has been much debate over the need to rollout better broadband across New Zealand. But the economic case for substantial publicly funded investment in the project has yet to be properly made. Most people grasp that more and better ICT would be a good thing, but few are clear on exactly why. We need to benchmark ourselves more fully in order to better articulate the need.

New ICT Body Kicks Off

phoenix We seem to be awash in a sea of forums, networks, industry bodies and think tanks these days, all of whom have opinions on broadband and the state of the ICT industry. Will we ever get a consensus?

After a lengthy debacle, in which ICT industry players failed embarrassingly to score any goals, the government has stepped in with a solution that bundles the picked over carcass of ICT-NZ with that of the decapitated body of the Digital Strategy. Hopefully increased gate takings in the form of new digital sector funding and some firm direction from the game’s governing body can breath life into Digital Development New Zealand (DDNZ).

Minister Cunliffe announced that the new team will comprise a partnership between industry, community and voluntary groups and will focus on issues of national importance. In the meantime another more commercially oriented organisation has reportedly sprung Phoenix-like out of ITANZ. This group will also have representation at the table of the digital sector body as will TUANZ, NZCS, INZ, LGNZ and WIT – to mention but a few of the team members. A group of prominent business people and heavyweight telco players has also established the independent Broadband Industry Forum to channel ideas on scoring better broadband for New Zealand.

DDNZ is tasked with “providing policy advice and delivering on strategic goals”, although the groundsman has not yet set up the goalposts. I must admit that I’m also left back wondering how well DDNZ can actually function as a team, given the wide spectrum of views represented on its founding board and the lack of industry alignment in the past. Perhaps that’s why Fran Wilde has controversially been engaged to referee the council.  Wilde is a consumate political animal with a history of driving difficult projects forward. It may not matter that there is no consensus.

Notably absent from the DDNZ council are representatives of the academic community. Given the nature of comments on innovation by sports columnist Stuart Corson in a recent Unlimited article, I trust that these new bodies will move quickly to establish links into academia. Considering the absence of academics on New Zealand tech company boards, the shortage of technology graduates and the general paucity of informed debate on the broadband issue, it behoves the industry to finally substitute some representation from the university community onto the playing field. In my experience, contemplative intellectual types are generally the last people chosen to join sports teams. In this case it may prove to be a mistake.

Thank-You So Much for Waiting

Why does it take a major telecommunications provider eight days to rectify a simple fault on a phone line in New Zealand? No. it’s not a bad joke, it really happened to me last week.

A couple of weeks ago I noticed there was a lot of background noise on my phone line. About the same time, my home office ADSL broadband began to get mighty slow. Eventually I lost all access to the Internet, although my phone remained working, but with even more noise. So I set about eliminating all the possible causes of the fault including swapping the router/modem, replacing the cabling and testing wall socket filters. No joy, so now it’s time to call the helpdesk.

Now when you call the helpdesk you first have to navigate the voice activated interface which (if it works) places you in a queue to speak to a real person. That’s fine, they play some cool Kiwi music that I like whilst I wait (Liam Finn, Anika Moa etc). Any moment I will get to speak to a technician who can resolve my fault – wrong. After a few minutes a lovely Filipina lady called Maria answers and we go through all the standard questions like, “have you turned your modem on and off?” She’s very polite, so I play along. When this fails to solve the problem she decides to put me on hold in order to speak to her supervisor. More music. After ten minutes in the holding pattern I realise she has lost the call.

Second attempt to call helpdesk, virtual receptionist then more music. Then I get a charming fellow from Manila called Arvin. He’s a bit more technically savvy and we talk about testing and swapping filters on all the wall jacks (I bought new filters and a very long cable in anticipation of this conversation). Still no luck. But Arvin agrees there is a line issue and kindly books me a service call with “Advanced Broadband” the division who actually fix the phone lines back in New Zealand. Next day I wait at home for the scheduled call. Nobody calls.

Then I have some meetings and don’t get to follow up. I use CafeNet in the city to check my email and do a bit of business online. Couple of days later I try again. Another call patched through to Manila and the same music whilst I hold. Another lovely lady re-books my technician call, “thank-you so much for waiting”, she chimes. But the technician again fails to call the following evening. Why is this is taking so long? I head off to bed tired and annoyed. The next day, an early helpdesk call, more holding music and then a very sleepy sounding night shift worker in the Manila call centre. We both manage to remain polite. He books me another service call. This time the technician calls as per the agreed schedule. The technician agrees there is a line fault (told you so) and promises to contact me when he is at the local exchange. He makes good on his promise and cheerily calls back to report that a small wire-end was loose at the exchange. Back in business.

So I guess my first question is: why does it take eight days, five phone calls and two hours of my valuable time to resolve a simple fault? Now to be clear, I received very polite and helpful service at all times from the call centre workers and the technician. The problem is the system and how it is managed. Outsourcing call centre work is a great way to lower costs, especially so given that recruiting locally is also getting harder. But if the helpdesk staff do not have authority to make any decisions it reduces their role to that of triage and placating the customer. Furthermore, when they do take action, better make damn sure that request is followed up locally or risk alienating the customer.

I have long maintained that broadband speed is not the issue in New Zealand. I can run my consulting business from home on 500kbs or 100Mbs line speed or anything in between. There are other more pressing problems like international connectivity. And as long as we have a monopolistic situation we risk the continued imposition of high prices and poor service levels for broadband. Bring on the competition.

My second question then is this: if it takes eight days to reconnect a loose wire, how long do you reckon it will take to build and support a nationwide fibre network?

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Epilogue of Enragement

gunmen

I don’t normally speak out on such issues, but I am growing tired of political correctness and can hold my tongue no longer. A father of three young children has died as a result of another armed robbery by three bandits in South Auckland. [Subsequent to first posting this article, an 80 year old Asian woman has been beaten to death in the same area and another Asian businesswoman intentionally run over and killed in a carpark.]

I hope Tapu Misa, who attempted to rubbish a recent controversial research paper by Greg Clydesdale on Polynesian social , educational and economic underperformance, will visit the family of the shot man and apologise for the way both Maori and Polynesians continue to be overrepresented in the violent crime, child abuse statistics and in the prison population. I hope she will explain the reasons why the adoption (by some) of L.A. style gangster culture has led to an increase in drug taking, teen promiscuity and gun ownership. 

I hope she will also write another editorial detailing why some members of her community feel they are somehow exempt from aspiring to contribute economically apart from in the colourful street markets of Otara or mopping toilet floors at nearby Auckland airport.

Clydesdale’s research was not anti-migrant and neither is my argument. The victim in this attack was a migrant, a family man who came to New Zealand and was prepared to work hard for a better life. His attackers were young Polynesian or Maori males probably born and raised locally. The issue here is that we are growing a brown underclass and nobody seems to want to talk about it nor acknowledge the likely downstream consequences for our society. If embarrassed government agencies try to shut down this discussion, how can we possibly find a solution?

Forget broadband or taxation. This is the real election issue debate we should be having because it impacts on our collective economic futures and our prospects for ongoing social cohesion - irrespective of our skin colour.

ICT Investment for Health

It’s no coincidence that David Cunliffe was allocated both the role of ICT Minister and that of Health; he’s both comfortable with technology and adept at relationship building. But in his speech to a recent health leadership forum, he made only passing reference to the role of ICT in the health sector.

Given that New Zealand companies have developed and exported some of the smartest health sector business applications around, it seems curious that we still have not yet invested in an integrated health I.T. infrastructure of our own. Apart from the obvious cost saving benefit, there is the alluring prospect of showcasing our homegrown technology to the world. Most importantly, such a system might save lives and alleviate suffering. Furthermore, the health sector has long been touted as a beneficiary of better broadband, yet we don’t seem to have made the connection yet.

The recent case of a patient whose lung cancer remained undetected is surely a prime example of a medical misadventure that might have been avoided through the use of technology. The gentleman concerned presented with a bowel problem. He then received an x-ray which incidentally alerted the attending physician to the presence of a suspicious mass in the patient’s lung. However no follow-up was done after the man returned home and four years later the tumour is now inoperable. With a high speed nationally integrated system, the query by the house surgeon would have been flagged on a universal patient file and the digital x-ray image could have been accessed by a specialist and the patient’s GP at any time. Why haven’t we implemented such a service yet?

The most obvious reason involves having the political will to allocate funding when there are competing needs within the health sector. The other reason is that it would be a lot easier to do if all health providers were linked by a proper broadband network. In fact if there ever was a compelling case for extending the reach of high speed networks then this it. There is one other hurdle. District Health Boards make independent funding decisions. Getting unanimity across the country on any such project would be almost impossible. But if anyone can help form a consensus in the health community, it is Minister Cunliffe. The only question then is whether or not he will get the opportunity to do so after the election result.

Entrepreneur’s Epilogue

It has been a busy week, with many hours logged slaving over a hot laptop. One of the first tasks was to set up our office server with a suite of nifty collaborative tools – essential because some of the team are offshore based. We also checked in with our very helpful accountant friends at Openside CA, we plugged away at the business plan, protected our trademark and completed the incorporation process. By the way, my co-founders assure me that despite the slightly clunky interface, the Companies Office website is light years ahead of anything in Europe where bits of paper and numerous trips to several different offices are required. They should know what they are talking about because they write application interface logic in their sleep. But more about that later…

Broadbandwagon – Where To Next?

I just don’t get Stephen Bell’s criticism of the New Zealand Institute’s (NZI) latest report on broadband. On the one hand he complains that the NZI hasn’t come up with any solutions, but in an article only two days prior he reports how industry leaders have approached ICT Minister Cunliffe for help to fund a full economic analysis of the broadband issue.

The NZI report was only ever intended as a discussion document. Industry players and other interested parties have used it as a starting point to prime the debate. Nobody is suggesting that NZI has a franchise on the broadband solution. Even, Rod Drury, who has been a passionate advocate for broadband and has worked closely with both NZI and Mr Cunliffe, accepts that we do not yet have all the answers. But what most people do agree upon is that the way we fund and build telecommunications infrastructure will have to change if we are to keep up with the rest of the world.

I was at a function last week at which Drury gave a quick overview of his ideas on what needs to happen next. He thinks the market should fund the infrastructure through a bond issue and that there should be an autonomous network operator. A national rollout would be coordinated by central government but not neccessarily funded by it. Local government would be involved at a regional level. All of which seems fair.

Rod also makes the point that we need greater diversity in our choice and access to international broadband, in order to secure our “digital trade routes”. I strongly agree, in fact I believe this is a way more pressing issue. Where we part company slightly is that I don’t believe a complete economic case has yet been made for ubiquitous domestic broadband. That’s why we now need a full economic analysis, properly funded by government and which considers both the positive and negative social and economic effects, based on experience elsewhere.

Perhaps the most compelling reason that I read recently, for delivering better domestic broadband, was a story by a returning visitor to the Rep. of South Korea. The North Asian nation is one of the most wired on the planet. It also tops the tables for I.T. competitiveness, maths and science literacy and ranks highly for GDP. But the most persuasive argument for broadband involves how the Koreans have used the Internet to export their culture abroad and turn it into a win for tourism and technology business investment. Perhaps we could learn by their example.