Introduction
Business people don't want to become software and hardware experts. What they do need is simply implementable systems that are robust and easy to correct if a mistake is made.... The challenge is to be able to translate from the techno guru to the practical usage.
(Locke, 2002: 4).
Information and Communication Technologies (ICTs) are becoming increasingly ubiquitous in society. Their increasing ubiquity in specific firms, industries and countries has been strongly anecdotally (and to a lesser but still significant extent in certain parts of the academic literature2) associated with these firms, industries and countries reaping greater benefit from their ongoing investments in ICTs and more widespread use of technologies such as the Internet and Intranets than those which have not pursued ICT investments and utilisation with such vigour (OECD, 2002: 13). As capital investment by firms in ICTs (including in some instances both hardware and software) is measurable and typically captured within national accounts, whilst their proportionate contribution to value added in outputs that utilise the investments is less easy to discern (Haltiwanger and Jarmin, 2000; Triplett, 1998), investments in infrastructure have become de facto proxies for comparing the relative potential of firms, industries and countries to accrue the presumed benefits.
The presumption that ICT investment leads directly to greater levels of benefit accrual by the investing entities has thus spurred the development of a plethora of national and international Information Economy policies designed to encourage firm and industry investment in ICTs.3 If some investment in ICTs has been shown to yield increases in output values, then ipso facto, these policies often presume that greater investment in infrastructure should deliver even greater benefits. Even though the literature cautions that investment in infrastructure requires complementary investment in hard-to-measure intangible factors such as human capital, organisational structures and commercial environments in order to yield the anticipated output gains (Haltiwanger and Jarmin, 2000; Brynjolfsson and Hitt, 2000; Brynjolfsson and Hitt, 2002), the "success" or "failure" of information society policies still tends to be determined to a significant degree by the extent to which tangible investments have been made in infrastructure.
By such input measures, New Zealand's prevailing Information Society policies should be adjudged as highly successful. New Zealand has led the OECD for much of the last decade in the percentage of GDP spent on ICTs (OECD, 2002: 48). New Zealand's firms are very high subscribers to, owners of, and users of: telephones (fixed and mobile), computers, the Internet and broadband connections (ITU, 2003; Howell and Obren, 2003; Howell and Marriott, 2002) relative to comparator countries such as Australia and the United Kingdom (spectacularly so when controlling for firm size - Howell, 2003a). It is apposite to note that the decade from 1992 to 2002, the same period in which New Zealand led the OECD in the proportion of GDP invested in ICTs, was the longest period since the 1960s in which New Zealand's per-capita GDP growth matched the pace of the total OECD's per-capita GDP growth (Buckle and McLellan, 2004).
Yet despite such affirmations, a popular feeling prevails that New Zealand is somehow "falling behind" the rest of the OECD in respect of business use of ICTs. This feeling is fuelled by analyses such as that of the Center for International Development at Harvard University's Network Readiness Index recording a drop in New Zealand's ranking from 11th to 23rd between 2002 and 20034 These surveys provide momentum for negative expectations, despite similar surveys such as the Economist Intelligence Unit E-Readiness Survey5 and IDC Research's Information Society Index, 6 which record rises in New Zealand's position from 18th to 17th, and 17th to 6th respectively, over the same period. Negative expectations, nonetheless, when supported by powerful voice, lead to calls for the Government to make alterations to the policy environment. Thus, it is apposite as New Zealand's Ministry of Economic Development (MED) shapes a new ICT strategy, that an examination be made of the ways in which New Zealand firms are using the substantial levels of ICT capital and communications connectivity that they have already invested in. Whilst existing research polls the use of specific technologies within firms of specific characteristics (Clark, et al, 2003 examines internet application use by sector and firm size; Statistics, 2002 examines computer ownership by firm sector and size), research on how firms are using ICTs and complementary human and organisational investments to generate performance improvements that are measurable (if not at the aggregate industry or national level, then at least at the firm level), has not as yet been undertaken.
To this end, MED has commissioned six case studies as part of an information-gathering exercise that will "assist with the Ministry's investigation into the potential of ICT to improve productivity in the New Zealand context and the development of the new ICT strategy". In addition, the New Zealand Institute for the Study of Competition and Regulation has funded the production of a further three case studies to enable a wider range of organisations to be represented in the analysis.
The case study approach enables policy-makers to gain an understanding from the perspective of the firm how ICTs form part of the firm's value-creating process, and by extension, how different policy approaches will either support and encourage, or impede and discourage, firms to adopt, implement and use ICTs in ways that enable measurable performance improvements to be gleaned. MED intends that the case studies will also "act as examplars, both positive and negative, in the introduction and management of ICTs from which best practice principles in the New Zealand context can be formulated". 7
The subsequent report comprises the nine case studies. It is structured as follows. A theoretical section surveys the literature on the relationships between information use by firms, investment in ICTs and the creation of measurable performance improvements from these investments. From this theoretical exploration, a framework for analysis of the New Zealand case study firms is developed. Next, the methodology for the case study research is explained, and the nine case studies are presented. The studies are then summarised in the final section that endeavours to integrate the outcomes of the case study analyses into common or distinguishing factors that may assist MED in its ICT policy formulation. Finally, some policy recommendations are made.
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