ICT-NZ Repels Aardvark Attack

Posted on by
1

Bruce Simpson’s withering attack on ICT-NZ was a bit like a small furry mammal dismembering a termite nest, but it has brought supporters of the proposed ICT industry supra-organisation scurrying to its defence.

Kudos to Garth Biggs for fronting on Simpson’s blog to respond to some fairly searching questions (and some rather ill-informed criticism). There has been so much rumour and innuendo circulating in the industry about what ICT-NZ is up to that this impromptu blog debate has been quite a tonic. Given the amount of public funds already spent on websites by both ICT-NZ and HiGrowth it is somewhat surprising that there is such a paucity of public information available on both initiatives. The intentions are good, but communicating the vision out to the communities of interest has perhaps not been such a roaring success.

It will be a positive if Biggs gets the cash he needs, but he may have a hard time loosening the purse strings. Despite some nice successes in the past, governmental agencies are generally bailing out of supporting super networks, expecting them to be self-sustaining these days. Instead the focus is now on smart niches in the ICT community where they can generate measurable outcomes more quickly. Examples of this approach include Land New Zealand, UCi3 and NextSpace.

Forget termite mounds, ICT-NZ and Hi Growth have still got some mountains to climb. Just how do you amalgamate a highly competitive $15 billion industry under a single flag anyway? Given that ICT has become somewhat of a political football lately, it seems like a tough job.

Is NZ Missing Out on the “Clean Tech” Investment Wave?

Posted on by
Reply

There was an excellent interview with Nick Gerritsen on National Radio this morning. Nick is a unique example of a Kiwi innovator and entrepreneur who has leveraged both his technology start-up expertise and some deep connections into the U.S. venture capital community to kickstart Marlborough based biofuels company fuels company Aquaflow Bionomics.

The company is reportedly negotiating with aircraft manufacturer Boeing to run an airborne trial involving aviation fuel derived from algae and using his firm’s technology. The ramifications of such a project are mind-boggling. Incidentally, Nick is also a director of Celsias a blogsite and virtual initiative that looks at issues around global sustainability and renewable energy. Celsias invites people to submit projects aimed at “global cooling”.

It was interesting to hear his comments about how truely disconnected New Zealand remains from global capital, especially in regards to the surge of investment in “clean tech” or technologies aimed (in particular) at transforming energy production and usage. Gerritsen reckons that NZ has a natural advantage in this area and claims to already have investors from Silicon Valley in close contact with his own venture. Yet local investors to have overlooked the project.

Why then is the NZ investor community standing off from participating? He thinks that the economy has become distorted to the point where domestic consumption and investment in property far outweighs interest in  industries that generate real export revenues. Hence our distance from capital markets does make a difference in terms of constraining investment in local technologies. Since there is little capital available locally, only a fortunate few who have the skills and networks to tap into substantial offshore investment can really make it big, says Gerritsen. He argued that government moves to cultivate venture capital investment have yet to deliver in any meaningful way.

I have already alluded to the potential that exists for New Zealand technology in renewable fuels. Is New Zealand at risk of missing out on the next big technology investment wave?

[tags] technology investment, biofuels, cleantech [/tags]

Competing from Down Under

Posted on by
Reply

A recently released report from Australia’s CEDA economic development thinktank discusses, in frank terms, the challenges of being a distant economy in a global marketplace and offers us many parallels to New Zealand’s own situation.

Contrary to the view that modern transport and communications technologies have reduced the “tyranny of distance” the report reminds us not to be complacent about geographic remoteness from global centres for trade. The increasing trade in services and a trend towards the growth in knowledge sector businesses does not neccessarily obviate the need to be closely connected to markets.

Australia’s relative disconnectedness from global supply chains is cited as a source of concern as is its distance from the deal-making and financial centres of the Northern Hemisphere.  On the plus side of the ledger, open financial markets which encourage both inwards and outwards investment are seen as underpinning Australia’s place in the world of trade. Australian coporates tend to use their financial muscle to buy into businesses abroad that align with their own.

The report also notes that most innovation occurs not so much within newly emergent and high risk areas of science, but amongst manufacturing and industrial sectors. Fostering innovation and building skill levels through immigration and education are seen as critical objectives. With two-thirds of global trade and one-third of research and development conducted by global multinational corporations, the report suggests that attracting and engaging with them is paramount.

Australia’s recent economic prosperity has been driven not by outstanding growth in export volumes but rather by extraordinary prices for commodities. This represents a risk to the economy unless there is greater diversity and an increased contribution from value-added goods and services. Yet investments in human knowledge and knowledge infrastructure have declined.

Notwithstanding that Australia’s prosperity differs in that it is largely founded upon a vast trade in minerals, there remain a great many lessons in the report that are of direct relevance to New Zealand. Not the least of these is that, as our largest trading partner, any downturn in global commodity prices is bound also to affect our own fortunes.

Genomics: The Next Technological Frontier?

Posted on by
Reply

When J.C. Venter and his team of genomic researchers completed the sequencing and analysis of the human genome in 2001, the scientific world was turned on its head. Dr Venter went on to found a research institute  to support putting the gene mapping technology to work for the benefit of humankind. The Global Ocean Sampling expedition is a recently completed study by the same organisation, conceived for the purpose of evaluating the microbial diversity in the world’s oceans using the tools and techniques developed to sequence the human and other genomes. In the spirit of Darwin the researchers circumnavigated the oceans of the globe sampling a vast diversity of water-borne microbacteria. The project turned up millions of previously unknown genes and thousands of proteins. That the research was part funded by the U.S. Department of Energy gives some indication as to where this work is heading.

Microbial life forms were largely responsible for the deposition and decomposition of much of the materials that now form the basis of the global supply of oil. So it stands to reason that energy researchers should become more interested in the biogenic pathways that led there. In fact a small New Zealand company has recently received a boost for its gas-to-ethanol technology that employs bacteria to break down carbon monoxide to form ethanol. Influential Silicon Valley investor Khosla Ventures even saw fit to make a substantial investment in the company.

These developments underline the fact that there is a niche market for a range of technologies that arise from research into molecular biology and New Zealand is well placed to contribute because we have a highly regarded research community including the Bioinformatics Research Institute at Auckland University.

Biomatters is another New Zealand company that has identified the potential of this market. The company has recently moved its R&D headquarters inside the Bioinformatics Institute where it collaborates closely at the cutting edge of research. The firm has developed bioinformatics software for molecular biologists and biochemists. Their research software application provides protein and molecular visualisation, literature search help and data storage tools.

The institute is a great example of a public-private partnership that has the potential to spin off some world class research and more projects with commercialisation potential in the future. In fact there has been a shift in the landscape favouring “centres of excellence” as the preferred vehicle for high end innovation. There is a wealth of talent available around the country in applied technologies such as biotech, software, digital media and design. It would be great to see some more of these initiatives spring up outside of Auckland.

Broadband Treading Water

Posted on by
1

The news that even third world nations are getting on with the job of rolling out broadband comes as no big surprise. If 300 million global users are now accessing the Internet through high speed networks, then that is a market segment New Zealand simply cannot ignore.

Whilst we continue the academic debate over telco restructuring and the benefits of fibre versus wireless, other countries are getting on with connecting their businesses and emancipating their burgeoning middle classes through fast access to digital content.

New Zealand is brimming over with digital creativity, whilst emerging economies are crying out for it. It’s bad enough that our domestic network speeds are intermittently slow and patchy, but there is clearly now a tangible opportunity cost because our connectivity to the rest of the world is not that flash either.

We have a very fast research network with very little traffic, I’m told there is spare capacity on the Southern Cross cable and there are a number of high speed urban networks in operation or being planned. Surely digital content and applications providers would pay a small premium to be hosted within a high speed network environment with global reach?

What I cannot fathom is with all the smart people involved in the ICT industry in New Zealand, why nobody seems capable of making a good business case. If we don’t do this soon, then the most exciting digital offering to come out of NZ will likely be websites flogging insurance or similar.

Dental Software Deal Hard to Swallow

Posted on by
3

Investors may be spitting blood in the wake of a $77 million takeover bid for Software of Excellence (SOE). American healthcare mammoth Henry Schein cites “cross selling opportunities” as the fundamental attraction for absorbing the newly profitable dental software provider. Are they serious?

Henry Schein is a Fortune 500 company with 12,000 employees across 19 countries and a multi billion dollar turnover. Why are they interested in a tiny software company from the other side of the world? The answer is that the cheapest way for a large U.S. company to innovate is to simply buy in what it needs to dominate a global market whilst simultaneously smothering the competition. That strategy makes a lot of sense – for them.

One doesn’t need to look far afield to find several recent examples of American corporations swooping on New Zealand technology firms, buying up the intellectual property and then shutting down the local side of the business. That’s fine if you are a foundation shareholder looking for a nice fat return, but it doesn’t help the economy much. Jobs are lost and profits head offshore. Sound familiar?

But, I hear you say, haven’t cashed up entrepreneurs reinvested into new ventures? Yes they have, but most of those new companies have not yet made a dollar in profit and some possibly never will. For every headline sale of a tech company abroad, there are a hundred firms that never make it. I guess the question we have to ask ourselves is a simple one. Is it an acceptable model for NZ to be an ideas incubator to the rest of the world and for us to accept that we have neither the organisational heft nor the capital required to fully exploit global markets?

Perhaps incubation and sale is a perfectly acceptable model? But it seems to me that you need to be sequentially churning out lots of quality ventures to make that model work for the broader economy. I don’t think we are quite there yet. Whatever happened to the plan to build and grow 100 by $100 million tech companies?

Considering some of the other recent trade sales, $77 million seems a little on the light side. I hope SOE shareholders don’t sell themselves short.

Generation C and the Co-Production Economy

Posted on by
3

I predict that one way or another we’ll be hearing more about “Generation C” the Community of talented individuals who Connect to Co-Create Content. What a mouthful! Appropriately, the phrase itself has been popularised by online articles and has begun to take hold with the aid of viral marketing, virtual magazines and blogging. Idealog ran an article on the topic about a year ago.

The concept probably had part of its origins in Richard Florida’s controversial, but widely read book The Rise of the Creative Class, which explores the Post-Industrial shift towards “knowledge work” involving technology and/or creative pursuits and how this is impacting on cities and economies.

Labelling the co-production economy as the next Renaissance is possibly going a little far at this stage and I still believe we do need to question the validity of crowd-written editorial. Contrarians like Andrew Keen go even further, espousing a dystopian view of the future whereby the Internet enables the lowest common denominator to prevail in the world of arts and letters. He describes Web 2.0 as  a “vertiginous media world in which content and advertising become indistinguishable”. However, Keen may have an axe to grind. He founded an Internet startup company that crashed and burned during the first tech boom.

Notwithstanding all the cynicism, I do like Matt Webb’s summation of what Gen C stands for amongst creative and connected people. Community, empowerment and sharing seem like important themes even without referring to the Internet in any way. I’ve seen the phrase “digital socialist” used in the context of freeing up better broadband connectivity and perhaps that moniker applies here too. So is Gen C and the disintermediation of traditional media and consumer channels perceived as a broader threat to capitalism?

Patricia Seybold doesn’t think so. In fact she articulates a somewhat clinical and business centric view. She’s adamant that Web 2.0 is neither a fad nor a phenomenon associated with a particular demographic. Web 2.0 enables not only peer produced digital content, but also opens a whole new channel to engage with customers by allowing them to co-design the products and services they want.  More importantly let’s imagine what might be possible if we networked entire organisations together and let them collaborate on interesting stuff.

But once corporates and government agencies take it onboard, will Web 2.0 then become mainstream and lose its cutting edge? Once everyone is converted to Generation C and is cross-trading the same images, soundbites and information nuggets repeatedly, will this devalue the opportunity? Will we still be able to differentiate between knowledge and folklore?

 —————————————————————–

The folks at Webstock have organised a panel debate and networking evening in Wellington on June 19th. The topic of the debate is:  “That Web 2.0 is all fizz and no substance”.

An Icy Adventure

Posted on by
1

sled.jpgA good friend of mine has recently returned from a ten day commercial walking expedition to the North Pole. He described the adventure as the greatest experience of his lifetime so far. This was despite having to deal with extreme physical stress, near blizzard conditions at times and an air temperature that never rose above minus 15 degrees C. In his account of the epic journey, Thomas reports that he was extremely fortunate to complete the trip with all his digits intact, having suffered bad frostbite after just a few moments of accidental exposure to the savage environment.

The team had the benefit of helicopter support, GPS and other modern equipment on their 120 km odyssey hauling sleds across the ice from Barneo in the far north of Norway. It puts into context what the early polar explorers must have endured. Despite this, it was a huge undertaking the likes of which most of us will never experience within our own lifetimes.

Entrepreneurs have much in common with polar explorers. Like the explorer, a successful entrepreneur is prepared to take on calculated risks in the knowledge that there is a rich reward to be claimed. An explorer trains for the physical challenges ahead and carries out a great deal of logistcal planning. An entrepreneur writes up a plan of action and learns as much as possible about the product and the marketplace before launching into business. Both make use of expert mentors and have a healthy grasp of their own personal limitations.

I guess where intrepid explorers part company from trail blazing entrepreneurs is that if you make a mistake in a blizzard in the Arctic, then you are dead. Entrepreneurs get to learn from their mistakes and live to fight another day.

Mobile is King in Developing Nations

Posted on by
Reply

Young people obviously have way too much time on their hands these days judging by the volume of bizarre content sitting around on servers out there. It must be a great time to be a hardware manufacturer. But is anyone actually making any revenue by hosting and sharing the stuff? Perhaps the trick is to guess which kind of hardware is going to win out and become a reseller or manufacturer?

When you think about developing countries, my guess is that mobile devices like phones, notebooks and i-Pods already way outnumber PCs. That leaves us wondering what kind of content sharing and business applications could be usefully deployed to cater for mobile but connected users. I’m involved with a project in India at present looking at this very problem, having last year successfully assisted a New Zealand digital technology exporter to find a product champion in this market. We find that the number of mobile users to (reportedly) be a staggering 115 million, whereas the number of individuals with direct access to a PC is only about 40 million. In fact if you look up almost any source it’s clear where the growth path lies.

With this in mind, a New Zealand startup venture called Voeveo has set out to corner the market on mobile content by devising a trading portal that allows mobile content producers to market and sell their wares online. It will be interesting to see how this evolves, given the high global growth rates in mobile phone usage.

Govt. Gets Wise to Web 2.0

Posted on by
3

David Cunliffe outlined his government’s ICT agenda in a speech to public service CIOs last week. As minister of all things to do with ICT as well as economic development, he is in a unique position to influence outcomes. Achieving better productivity and enhanced connectivity has never been more important to our economic well being. So it bodes well that we have a Minister who is fronting up and paying attention to the very industry that can enable those things.

At the same event, visiting experts implored the government to get on board with Web 2.0 and start using web technologies to engage with its constituency. The State Services Commission have (finally) heard this message and are now involved in developing a state services framework for online participation.

To their credit the commission have invited a small community of interest to contribute to the policy formation process. Encouragingly, the consultation process makes use of the very technologies being proposed as part of a new toolset to bring government agencies closer to the people.

The only variable missing from the equation is that the government heads of departments have not yet been widely consulted on the policy proposal. Government agencies are brimming over with staff and there is an election looming on the horizon. Implementing an e-participation plan that actually empowers the public, increases transparency and contributes to productivity may yet prove unpalatable within certain quarters. A few government agencies are already well advanced in their use of Web 2.0 technologies and having a cross government standard, sooner rather than later, would be a good thing for service providers and the public who will be the end users.