• Home
• ICT
• Digital Technology
• Digital Strategy
• Archive
• Strategy Draft
• 4. Realising the Benefits

• Digital Technology

• Digital Strategy

• Archive

• Strategy Draft
• Summary of Submissions
• Strategy Draft Feedback
• Strategy Draft Summary

• 4.1 Communities
  • The Role of the Government
  • Maximising the Opportunities
  • Addressing the Challenges
• 4.2 Businesses
  • The Role of the Government
  • Maximising the Opportunities
  • Addressing the Challenges
• 4.3 The Government
  • Maximising the Opportunities
  • Addressing the Challenges
  • Transformation in the Health and Education Sectors

4.1 Communities

To create an inclusive society all New Zealanders must be able to access, use and gain benefit from ICT, and apply electronic information in ways that enhance the quality of their lives. People need motivation, skills and support to become confident ICT users. This requires infrastructure in our communities, including access points, training and coaching.

This dimension of the Digital Strategy, more than any other, depends on activity at the grassroots level. Actions that are conceived elsewhere and driven from central government will not work effectively in our independent, information-empowered communities. Local communities must be responsible for designing and implementing local initiatives if they are to be effective.

Moreover, we need to retain the local connections that affirm our sense of identity, preserving what is unique and local in the face of global brands and the flood of cultural imports from elsewhere.

The key resource for the new economy is the intellectual capital, the valuable knowledge that resides in people. It is essential that we invest in our citizens' skills and knowledge and build cohesive communities to which people will choose to belong.

ICT can contribute to economic growth and social cohesion in at least five ways:

• building people's sense of belonging to the community by enhancing the social services, networks and social infrastructure that support people, geographic communities and communities of interest and improvements in individual and community capability;
• building the productive capability of individuals and groups within that community;²⁰
• improving the functioning and governance of local institutions and community and voluntary groups;
• encouraging innovation in community services and enterprises; and
• extending existing services to isolated communities or socially excluded groups.

ICT offers unique tools for communities to identify, map and mobilise their assets, maximising the use of existing resources to meet their collective goals. The social and productive capabilities that already exist in a community are necessary for building confident, self-reliant, self-actualising communities and crucial to the development and sustainability of ICT initiatives.

The Role of the Government

The government recognises that local initiatives that are locally owned and driven are most likely to be effective. The responsibility for improving communities' access to and use of ICT must therefore be shared by central and local government, the community and private sectors, philanthropic and voluntary agencies, and individual community members.

Central government's particular role is to promote and facilitate the use of information and ICT within our communities by raising community awareness of ICT, and supporting local initiatives where appropriate.

The government also has a responsibility to show leadership by using ICT to deliver core government services and by strengthening relationships with community organisations and local government to allow a comprehensive approach to be adopted. Practical advice, ideas, and the results of initiatives should all be shared so that policy in ICT, education and community development can be informed by an understanding of what works and what doesn't.

In addition, the government has a role through its regional development focus, to improve the performance of economic development initiatives in regional New Zealand. This includes working with regional stakeholders to establish the foundations and pre-conditions for the take-up of economic development opportunities (whether commercially or community driven) and facilitating the building of regional capability.

Maximising the Opportunities

The proposed actions have been developed according to two guiding principles:

An enabling policy framework: Policy development must focus on the full range of communities (geographic communities and communities of interest, identity and circumstance). It should support the identification of communities' assets and foster appropriate partnerships between government, local government, business, iwi, whānau, hapū, community and voluntary organisations, to utilise them to meet the community goals.

Partnerships between government, community groups and business are an effective way to respond to the challenges and opportunities provided by new technologies and ensure community ownership.

Affirming community and voluntary sector ICT initiatives and building capacity: Community initiatives arise from grassroots responses to needs or opportunities. Innovative and effective responses should be supported and adopted where there is demonstrable benefit to the community. Keeping in touch with their communities of origin is a powerful motivator for ethnic and cultural communities to invest in ICT. A number of community ICT projects, directed at particular community needs, are underway at the time of writing. Successful projects should be continued and extended into other communities.

The actions proposed below address the priorities identified at the Connecting Communities Conference 2003, as well as the seven action areas of the Connecting Communities Strategy.²¹

The Connecting Communities Conference identified four priorities:

• the creation and distribution of tool kits and training to support asset mapping and partnership building;
• local resources for technology planning and technical support;
• affordable access to high bandwidth networks and applications to improve ICT use within communities; and
• funding to build the ICT capability of communities.

Addressing the Challenges

The "digital divide" that separates ICT-enabled New Zealand households from disadvantaged ones is the product of economic differences and education levels, as well as family structure, gender, ethnicity, disability, age and locality. The perceived relevance or threat of technology is also a significant factor.²²

There is, nonetheless, considerable potential for ICT to redress socio-economic disadvantages. For example, by providing multiple points to access e-learning opportunities, multi-lingual communication and multi-media information bases, people isolated by location, age, disability or language can participate more fully. ICT offers opportunities to strengthen all communities, and enables resources such as networks and applications to be shared efficiently.

4.2 Businesses

The potential to create significant value for businesses in all sectors, whether in the form of efficiency gains or revenue from new products and services lies in using ICT as a tool to drive process or product innovations. It is the innovative use of information that the technology enables rather than the technology itself that is critical. There are two dimensions to consider:

• promoting the uptake and efficient use of ICT by New Zealand business generally; and
• building a vibrant and competitive ICT sector.

A thriving ICT sector, with an optimal mix of local and multi-national firms, is an important part of the New Zealand economy and society, and has a major part to play in the development of other high value-added service industries. The sector supplies needed skills and applications, and ensures that new technology and knowledge are available to New Zealand firms.

ICT was chosen as one of the GIF focus sectors because of the growth potential of the sector, and because ICT is a "horizontal enabler" of much economic activity.

The enabling impact of ICT can be observed in many areas of economic and social activity. Some sectors of the New Zealand economy, such as banking, have been dramatically transformed by ICT, with applications such as EFTPOS, Internet and telephone banking. Research indicates a high uptake of e-commerce applications by New Zealand business, particularly in tourism, finance, insurance, accommodation, property, business services and in the education sector.²⁴

While the effect of ICT is plain to see, measuring its contribution to productivity growth is tricky. Research by the Australian Productivity Commission, the OECD and the McKinsey Global Institute²⁵ confirms that although ICT contributes to productivity growth, there is no simple correlation between the adoption of ICT and productivity. Strong productivity growth in the past ten years, for example in the US and Australia, appears to have been the result of interrelated factors. These include economic reforms (including regulatory reform), access to higher skills, firm-level innovation and changes in the organisation of work.

Intensified competition in particular has been identified as a key driver of innovation. In this context, ICT plays an important role by providing managers with a tool that they can use in process and product innovation. But the productivity benefits vary from one sector to another. Those with the greatest need for information processing, such as financial services or the wholesale and retail sectors, show the highest improvements in productivity.

Research suggests that ICT is most beneficial when applications:

• are tailored to sector-specific business processes;
• are deployed in a sequence that builds capabilities over time; and
• co-evolve with managerial and technical innovation.²⁶

There is a consensus that ICT, in isolation from complementary innovative changes in how the business is run, is not a solution in itself. On its own, it does not drive economic transformation or productivity growth. A coherent set of economic policies is needed to create the conditions, including intensified competition that will encourage businesses to use ICT and other emerging technologies as a basis for other innovations. This is the goal of the GIF.²⁷

The Role of the Government

The government's key role is to ensure an open, sound and stable business environment. Policies that foster competition are the levers that will ensure that businesses take up ICT applications and services, including broadband.

The government also has an important role to play in making businesses aware of the opportunities afforded by ICT, of best practice in data security and safety in an online environment and of new technological advances.

The government has traditionally played a role in improving the management capability of New Zealand firms through business assistance programmes.

As content is a crucial resource in the knowledge economy, the government needs to ensure that our firms have appropriate access to New Zealand's stock of science and technology research.

The government must also lead by example, by adopting best practice in managing the information for which it is responsible (including interoperability, security and data standards) and developing complementary innovations in governance, management, business practices, processes and organisational forms. It also has a responsibility to seize the opportunities afforded by ICT to reduce the compliance costs for businesses.

Maximising the Opportunities

Maximising the opportunities for business requires actions in six areas:

• improving general management capability;
• raising business awareness of ICT, including new technology developments;
• better access to information and research;
• developing our content industries;
• exploiting market niches for the ICT sector; and
• improving government procurement processes.

Improving general management capability is the foundation for successful implementation of ICT in New Zealand's firms. The greater the understanding managers have of their products, business, industry and trading environment, especially the value chain and the information components of their business, the better they will be able to identify where ICT will fit and how it can add to the value the business creates.

ICT provides business with a plethora of opportunities ranging from cost reduction to participation in global value chains that would have been impossible in the past. Firms need to have much greater awareness of these opportunities, as well as the ways technology is changing their markets and channels, and new developments in technology.

Better access to information has the potential to accelerate research and development and the diffusion of innovation and, as in the case of regulatory compliance, reduce costs. Actions to maximise the opportunities of greater access to information are proposed in the Content section of this Strategy.

New content industries are also developing at points along the digital content value chain with the convergence of creative and technology providers and the blurring of traditional barriers between different types of media. New Zealand Trade and Enterprise reports that the digital content industry has an average growth rate of 29% per annum. Digital content opportunities are now available in such diverse areas as interactive games, e-learning, animation, special effects, Web design, visualisation technologies, audio design, and film and publishing. New Zealand already has some exemplar digital content firms such as Right Hemisphere, Sidhe Interactive, HITLab NZ and Weta Digital.²⁸

New Zealand ICT companies are already establishing positions in market niches in health-related technologies and mobile communications. There is potential for New Zealand to promote itself as a software outsourcing destination and to attract foreign investment in research and development.²⁹ The ICT sector currently generates $1.25 billion in foreign exchange annually, and is growing at 20% per annum.³⁰

Lastly, government procurement is a significant component of the ICT market in New Zealand, and there is potential to improve the procurement process to ensure that New Zealand firms have a fair opportunity to compete.

Addressing the Challenges

4.3 The Government

The opportunities for using ICT to transform the government and create an information-empowered society are of two quite different kinds:

• general, in terms of how a networked public sector will use information and technology to improve the ways it delivers services to citizens; and
• sector-specific, such as the possibilities ICT offers for transforming the health and education sectors.

This section therefore deals with the general case first before considering the far-reaching opportunities for using ICT for the delivery of health and education.

New Zealand's transformed government will be able to deliver:

• better services that are more convenient and reliable, with lower compliance costs and higher quality and value. For example, sharing common client data between agencies will:
  • enable individuals to be automatically reminded of obligations (such as renewing a driver's licence); and
  • avoid the need for businesses to provide the same information to more than one government agency, reducing compliance costs;
• cost effectiveness and efficiency - cheaper, better information for citizens and businesses, and better value for taxpayers; and
• improved participation that makes it easier for those who want to contribute to policy changes (for example, agencies will outline a proposed policy change on their websites and receive feedback on that change).

The government will also lead; it will act as an exemplar to citizens and businesses by its innovative approach to the supply of services, such as:

• in the authentication of online services to ensure that all government information and services go to the right person, while protecting their privacy; and
• the effective use of information in the health sector, so that patients are better informed and health resources are distributed to areas of greatest need at the right time.

Maximising the Opportunities

ICT is only one part of achieving the outcome of a transformed government. Success will depend on making continued improvements to the design, operation and culture of the public sector.

Of particular importance is ensuring that government agencies collaborate so that their ICT decisions reflect the broader requirements of a networked government through the development of enterprise architectures, shared ICT infrastructure, common data and security standards, and government-wide standards for interoperability.

Addressing the Challenges

Transformation in the Health and Education Sectors

Because health and education are information-intensive and their delivery is widely dispersed, they represent the most far-reaching opportunities to transform government and build an information-empowered society. The transformation of health and education has the potential to deliver significant productivity benefits that will flow from the sectors themselves to the wider economy.

Transformation in the health sector is particularly important in view of our ageing population, which will place more demand on health services in the future, with costs increasing in proportion to usage.

ICT is now widely available in pre-schools, schools and tertiary institutions, providing opportunities for supporting new ways of teaching and learning. Taking advantage of these opportunities is important if New Zealand is to develop a skilled workforce and to attract and retain a solid core of the exceptionally talented - necessary ingredients for us to make the jump to a successful high-growth economy.

Using ICT will not only enable the more efficient delivery of services and sharing of information and resources, but also open up the possibility of offering wholly new services to citizens, conferring benefits that would have been unimaginable a decade ago. The government, as the major provider in the health and education sectors, will lead in the use of ICT to transform them.

Transforming the Health Sector

By embracing ICT, health providers will be able to:

• implement telehealth initiatives such as specialist diagnosis in rural medical practices, clinics and hospitals;
• exchange high-volume information leading to more timely diagnosis and treatment interventions;
• transfer large files such as diagnostic images to specialists to further improve diagnosis and treatment;
• reduce the burden of travel on specialists by enabling clinics to be held at distant locations using video-conferencing technology;
• access decision-support guidelines at the point of care, so that general practitioners can provide evidence-based care;
• provide education at a distance via video-conferencing to rural health care providers, reducing the need for travel and maintaining the body of knowledge in New Zealand on latest research findings; and
• carry out administrative activities more efficiently, allowing funds to be reallocated to service delivery.

ICT will enable health data to be better managed. By having access to better quality and more comprehensive data, we will be better able to predict our health needs and prioritise services regionally and nationally, and devise targeted prevention programmes. With accurate national data we can benchmark ourselves against international norms, and provide accurate national data to international agencies such as the World Health Organization.

Maximising the Opportunities

In collaboration with the sector, the Ministry of Health has a significant programme of work underway to put in place infrastructural components on which e-health services can be built. Applications such as electronic laboratory reports and hospital discharges already use the new infrastructure. District Health Boards are exploring telehealth initiatives that will improve the quality of services they provide, particularly to rural areas. And the Ministry of Health is working with Project PROBE to enable affordable broadband to become available to sector organisations.

This existing programme of work and future work opportunities will be delivered through one strategic plan for the health sector.

Transforming the Education Sector

ICT has the potential to transform the sector: how students are taught, where they are taught, and what they are taught - and also to transform the administration of the sector.

Through the use of the Internet and the provision of materials created electronically, educators will be able to access professional advice, online learning materials, tools and professional development, and collaborate in communities of professional practice.

Learners will have the opportunity to experience a much wider range of learning situations and resources. They will be able to participate in "virtual classrooms" and communicate with people beyond their immediate environment, increasing their connection to the world. For example, a lesson on global warming in a school in Southland could be taught in conjunction with a class in Finland.

Maximising the Opportunities

The education sector is already undergoing change as a result of initiatives arising from the ICT strategies for schools (e.g. Digital Horizons), the tertiary education and information strategies (e.g. the Interim Tertiary e-Learning Framework), and Project PROBE.

²⁰Recent research shows that training in ICT has a greater effect on an individual's capacity to increase their earning power than training in any other subject (Daldy and Gibson, "Have Computers Changed the New Zealand Wage Structure? Evidence from Data on Training," New Zealand Journal of Industrial Relations (2003), 28(1): pp. 13-21).

²¹Connecting Communities' seven areas of action:

• practical assistance to help communities plan their use of ICT;
• improved co-ordination of government assistance to community ICT initiatives;
• support in creating an infrastructure of non-government agencies with the capability and capacity to help deliver services to meet community ICT needs;
• assistance with providing information to communities;
• research and evaluation programme;
• training for community workers to help their communities engage with ICT; and
• development of cross-sector relationships to assist with resourcing community projects.

²²Household income, qualification levels and the number of parents and children in a family are major factors in an individual's home-based access to the Internet. Statistics New Zealand, The Digital Divide (2003).

²³The ICT Taskforce advocated this ambitious target in its 2003 report Breaking through the Barriers.

²⁴Research by University of Auckland, E-Business in New Zealand, 2000-2002: Are We Ready for the Digital Economy?, 2003.

²⁵Parham, Productivity Commission, Australia: Getting the Most from ICTs, 2002, Australia.
McKinsey Global Institute, Whatever Happened to the New Economy?, 2002, San Francisco.
OECD, ICT and Economic Growth: Evidence from OECD Countries, Industries and Firms, 2003, Paris.

²⁶McKinsey Report, ibid.

²⁷The economic factors include openness to trade, foreign investment and ideas; an efficient telecommunications market; appropriate regulatory frameworks, including international frameworks; a property rights system that strikes the appropriate balance between the promotion of innovation and the diffusion of new knowledge; a business environment that fosters and harnesses innovation; and a well educated workforce and flexible labour market.

²⁸Right Hemisphere provides 3D software and technology platform design development for entertainment, education and sophisticated manufacturing. Weta Digital is the Oscar-winning creative team behind the special effects and animation of The Lord of the Rings trilogy. Sidhe Interactive is the first New Zealand games studio to deliver an interactive game on the PlayStation2 and XBOX platforms. HITLab NZ is exploring human interface design.

²⁹Two reports independently reached the same conclusion: Strategic Capabilities Assessment - Global Software Outsourcing, by the Gartner Group, and The Centre for Advanced Government ICT Application, by the Information Technology Association of New Zealand.

³⁰New Zealand Trade and Enterprise: ICT Sector Strategic Plan, March 2004.

³¹Firm Foundations: A Study of New Zealand Business Practices and Performance, Ministry of Economic Development, p. 110.

³²Firm Foundations, Ibid.