Inbox: Telecoms industry plots nz economic boost

What practical steps can New Zealand take to lay the foundation for technology-driven success? That was the question posed – and partially answered – at April’s MindStorm conference.
The Auckland event was organised by the Telecommunications Carriers Forum, an industry policy group made up of the main telecommunications companies, with focus on boosting technology start-ups and innovation. While most conferences in this sector focus on technical or regulatory issues, MindStorm sessions were tailored for general business audience.
Although it wasn’t mentioned much, the government-subsidised fibre networks lurked in the background of many presentations. Google country manager Tony Keusgen briefly pulled it back to the fore when he told delegates UFB on its own won’t revitalise the economy – because there aren’t enough IT workers with the skills to put small and medium companies online. Google’s solution is to partner with the University of Auckland to train 100 graduates in technical skills then help find jobs for them.
Could UFB form the foundation for innovation?
Towards the end of his life, the late Sir Paul Callaghan chose Victoria University physics professor Shaun Hendy to continue his work looking at the links between science, technology and New Zealand’s economic prosperity.
At MindStorm, Hendy described what people mean when they talk about an ‘innovation ecosystem’. In biological ecosystem – say Waipoua Forest in Northland – there is range of plant sizes. You find handful of the biggest Kauri trees that dominate our attention, more of the intermediate plants and millions of the smallest ones. As physicist Hendy says the distribution obeys ‘power law’ that’s similar to the distribution found where there’s mix of competition and evolution.
Intellectual property is distributed among technology companies in the same way: handful of large companies own many patents, while there are lots of smaller companies each owning few patents.
Taking this as his starting point, he then looks more closely at the innovation ecosystem in Finland – small country like New Zealand but with one large technology company: Nokia. There’s big collaboration network between researchers in Nokia, but the company doesn’t exist in vacuum, there are external knowledge networks extending beyond Nokia’s boundaries. Hendy says successful innovative companies are highly connected.
There’s global knowledge network with 10,000 companies worldwide. The US, Japan and Germany dominate, but the key point is the connectivity is important in fostering innovation. He says the biggest network of inventors is made up of small to medium companies in California. Significantly they are not in telecommunications or information technology but in medical devices.
Hendy says Finland’s innovation ecosystem resembles the US, while Australia and New Zealand struggle to take ideas to scale. This is problem because we don’t have enough complexity in our economy which gives us less advantage when exporting.
However, there is an answer. Hendy says innovation happens more in bigger cities – that’s because of the increased connectivity between companies and people. Consequently there’s more innovation in Sydney and Melbourne than in Auckland or Wellington.
Hendy says New Zealand needs to create one large city of four million people to build scale. That isn’t feasible. So how do we compete with Sydney? Hendy says the telecommunications industry need to build connectivity across the country to connect innovators. That’s what the Government is doing today with its UltraFast Broadband and Rural Broadband Initiative projects.

Wake-up call on workplace gadgets
US-based Allison Cerra, VP marketing and communications, Alcatel-Lucent, specialises in looking at how employees use communications technologies and devices in and out of the workplace. She talked about how company culture and work patterns are changing.
Cerra says the ‘uber-connected’ generation currently entering the workforce – the millennials – bring radically different approaches to work and technology. Today’s workers use mobile devices; in many cases they are purchased by the employee – not the company. And this brings whole set of questions: who owns the address book stored in mobile phone? Is it the company or the employee, what if the employee purchased the phone and entered all the data? Are companies entitled to monitor employee-owned devices? What about the employee’s movements? And if the answer is yes, can you monitor them around the clock? When can you remotely wipe the device?
She says there’s even question of financial privacy when company allows bring-your-own-devices. carrier might want credit check before allowing the employee to connect to their network – should an employer have access to that information? These issues redefine the relationship between employees and their companies.
On big data, Cerra says recruitment war is about to break out as companies struggle to find people with the analytical skills to make sense of data. There will be 1.5 million shortfall in the US alone.

Warning signs
Peter Griffin, who manages the Science Media Centre, notes New Zealand slipping in global ranking in the World Economic Forum’s network readiness index despite the government-subsidised networks. We’ve gone from 14th place to 20th. The issue is price, New Zealanders pay far more for broadband than users elsewhere in the world. Although prices have been falling here, they haven’t been falling as fast as the rest of the world. We’re also lagging in the robustness of our infrastructure and the availability of digital services.
Griffin says we need to work to roll out the networks faster and to encourage people to take up the services by showing them the enabling power of fast internet. He says in the past New Zealand has been test bed for technologies like Eftpos and Vodafone mobile services. He said Telecom NZ’s recently launched Digital Ventures unit is step in the right direction, but it’s tiny. Griffin wants an ICT centre of excellence – he says we have them for other areas such as biotechnology.
Let’s hope the next MindStorm shows we’ve made some progress in these areas that are increasingly pivotal to New Zealand’s overall economic performance. M

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