Policy Implications
Human Capital Investment outside Fonterra
It is significant to note that Fonterra management sees its predominant human capital needs for project JEDI and its wider ICT implementations to be business management and analysis skills, change management, systems understanding and awareness of information and its uses in business, for both company management and the farmer-shareholders. Demand for technology-specific ICT skills is not seen as a Fonterra priority, or even something that the company deems to be a priority for New Zealand.
The scale of the Fonterra project means that the requisite technological skills would never be able to be supplied from within the New Zealand. Supply of skills on the world market is of more relevance to this project. The multi-national nature of Fonterra also means that even though the company is based in New Zealand, technical skills are required to support applications in overseas locations as well. From a policy perspective, therefore, development of specific technical skills within New Zealand is unlikely to be a prerequisite for such large projects by large companies. Even in the longer term, in respect of maintenance and ongoing support, the international nature of both the business and the software and hardware used by the company mean that expertise will continue to be sourced on the world, rather than the New Zealand, market. Thus it is debatable whether New Zealand government policies aimed at creating more technical experts through education will benefit large multi-national companies such as Fonterra.
It is also noted that the development of the rural broadband network has been undertaken in conjunction with existing infrastructure providers rather than internally. This leads to the conclusion that the markets for technical expertise even for large companies are predominantly an issue faced by specialist technology and infrastructure companies. There is no evidence that New Zealand's largest company has been adversely affected by the supply and demand for these services to the specialist companies. Indeed, the rural broadband network may actually be placing New Zealand at the leading edge of developing new technical skills in the world market given the extensive use of wireless technologies in the Fonterra implementation, a technology that is not yet widely used.14
Rather, the Fonterra case emphasises the very real demand for more general business analysis skills, and greater understanding of the ways in which information is used within business operations and decision-making. These skills are required not just at the generic corporate manager level but also within the owners, managers and workers on each supplier farm. This can be seen as a demand for "information workers" as distinct from "information technology workers". Whilst information technology workers are necessary to implement technological systems, the design and specification of system inputs and outputs, their sources and use, and hence the ultimate value of these systems, relies upon the amalgamation of industry knowledge and understanding of how information contributes to the creation of value in that industry. By analogy, whilst motor mechanics are a necessary contributor to the economic value generated by motor vehicles (by designing, servicing, etc), greater value is added by drivers who make decisions about how to most profitably apply the transportation capacity offered by the vehicles (e.g. route scheduling, load types etc). Fonterra management believe that their business would benefit from having greater skill development within New Zealand being focused on "driver training" than in "mechanic training".
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