Five Issues Raised at the E-Commerce Sector Leaders Forum
[ Last Updated 16 February 2006 ]
Notes from the ECAT Anniversary E-Commerce Sector Leaders Forum 16 May 2002
At the ECAT Anniversary E-Commerce Sector Leaders Forum held earlier this year the following five discussion topics were raised.
- Technology Deployment
- Broadband Applications Development
- Keeping Growing Businesses in NZ
- Clusters
- Small and Micro Enterprise Support
We invite you to post observations, comments and questions on the notice board of nzecommerce.co.nz and welcome you to continue the discussion.
The link to this discussion summary has been sent to a wide group of individuals and organisations interested in e-commerce.
Technology Deployment
Summary: Combinations of technologies will be needed to meet the needs of rural businesses and rural communities.
Tom Lambie (Federated Farmers), in response to a question from Stephen Bell (Computerworld), discussed the ranges and costs of the various technologies that can service the rural communities and referred to the increasing use of services like Fencepost.
- ADSL enabled by quality copper suits those close to towns
- Satellite good for download but back-haul is difficult and 2-way is expensive
- Wireless suits line of sight, therefore not an "all terrain" technology
- Cellular not enough bandwidth for data, but is mobile and can be a bit dear. There are also coverage issues.
Broadband Applications Development
Summary: What are we going to do with broadband? Good question, initiatives by individual sectors and companies, a TUANZ sponsored conference featuring a creative approach to broadband applications planned in November 2001.
There is good content in Tourism for both suppliers and customers, and the sharing of customer experiences on-line is growing.
Fonterra is pushing the need for a big pipe to farms, which will bring the opportunity to access university research information, and also perhaps to look at photos or movies of actual crops growing/products to assist with management. The "Robotic Cow" from Hamilton will ease labour problems and enable farmers to be freed, for a short while, from the twice daily demands of milking schedules. Fonterra has lots of research and thought has gone into content and technical support for on-farm wireless networks.
What next for other industries? There is the development of an Applications Development Forum as a progression of the Regional Broadband Forum. (see www.ecommerce.govt.nz for developments)
Keeping Growing Businesses in NZ
Summary: Complex issue involving taxation, direct foreign investment, innovation and effective application of thinking and technology.
How do we keep a company like Weta here? The pattern has been that these firms [innovative NZ firms that have made a 'name' for themselves eg Weta FX] are bought out by overseas interests. Peter Jackson, himself, is passionate about remaining in NZ, however stronger community & country support is needed to keep other high growth companies here.
It was suggested that a more 'investment friendly' environment is needed. Also Jon Labrie (Weta Digital) believes that computer gear too expensive as well…about 10% more than US for some reason.
The point was made that there is more investment money available now, which is good.
NZ seems able to incubate companies well, but then sells them. Although most companies and investors have an exit strategy, there needs to be a way of keeping the growth and IP here.
Most small companies are owned by one person. There is more private equity becoming available. Rod Oram feels strongly about keeping NZ companies based here. And that tax policy, foreign investment, style of businesses that are invited here all need to be considered.
Rod Oram believes that the classical direct foreign investment strategies that have worked for others may not work for us. For example Microsoft locating a factory or large branch to Ireland has been successful there because it enabled people to move from low wage activities (mostly rural work in Ireland) to higher wage activities. In NZ rural work is not typically a low wage activity and the movement of many people out of other low wage activities in NZ principally happened during the economic reforms of the 80's, e.g. closures of the car assembly plants and so on.
The other popular direct foreign investment strategy is for foreign investment in low productivity, low risk activities e.g. purchase of coastal property, or purchase of existing businesses.
Rod believes that what is required is a foreign investment approach that supports local company growth and capitalisation of NZ intellectual property rather than getting large companies to relocate parts of their operations to NZ. This is an organic, company specific approach which is working now but is difficult to ramp up in any organised way.
Mr Swain made the point about direct Foreign Investment being encouraged under GIF (Growth and Innovation Framework announced by the Prime Minister in February).
Philip Lewin made the point that if companies sell, the IP leaves. Further there is a cultural reluctance to surrender control and dilute share holding, perhaps some sweeteners are needed to assist….this is what happens in other places for example in Queensland, Australia.
The ICT Task Force and others are exploring ways of getting round this problem so that local companies can be supported by the financial reserves and distribution networks of typically larger overseas companies without loosing the of business growth and intellectual property from NZ.
Clusters
Summary: Our small size has meant that businesses naturally rely on each other and form natural clusters to improve business quality. There is a specific Industry NZ fund to support cluster development. Opportunity to build on an existing strength and achieve more internationally.
The representative from Solnet asked what support exists for clusters?
Tom Lambie made the point that farming was a natural cluster, with Fonterra being the biggest part of the cluster but the other parts were critical for success and there was a whole range of sizes from multi nationals to small farms and very small businesses. All members are each others customers, and broadband is needed to make this cluster more effective. Rural clusters address niche markets domestically and internationally.
John Moriarty made the point that the tourism industry has lots of local clusters that strengthen products and marketing. National clusters exist to market internationally. Major need for the tourism sector is to is to improve business skills in the clusters themselves.
Minister Swain mentioned that there are private/public sector partnerships as well as industry clusters supported in Wellington by WREDA (Wellington Region Economic Development Agency). One of these is the creative cluster that is working on a project called First Light to work with Singapore on creating content.
There is also a health IT cluster being pulled together by Industry New Zealand that includes the hospital and research facilities. There is also the possibility of "virtual clusters" that include members from different parts of the country. Dairy farms are already doing this and the opportunity is for industries to do this too. This would be a worthwhile role perhaps for representative industry organisations.
Rod Oram spoke about the possibility of clustering with overseas companies would also be appealing but is as yet an untested model where small companies can share their IP or research to produce a commercial offering. NZ has not been strong in the commercialisation aspects. There is also the opportunity to use a cluster to actually develop IP and then commercialise. Perhaps we could develop a "knowledge portal" a useful link is to the Foundation of Research Science & Technology http://www.frst.govt.nz/research/index.cfm.
Small and Micro Enterprise Support
Summary: There is case being developed now for a comprehensive e-capability programme that will show a clear way for small & micro businesses to increase their skills. The initiative is an ECAT collaborative project.
The Trade New Zealand representative was asked what support there was for SME up-skilling. He briefly discussed the Trade New Zealand Business Profiling system for NZ business having access to leads from overseas. markets. http://www.tradenz.govt.nz for more information about this area He also briefly outlined a collaborative initiative by Trade New Zealand, Industry New Zealand and other ECAT members to develop a comprehensive e-capability programme to assist more NZ businesses to meet the Committed & Capable threshold for businesses to export with support from Trade NZ. The business case will provide a way for NZ businesses to develop and build on e-commerce knowledge.
Minister for Communications and Information Technology Mr Swain summarised the discussion There seems to be a desire and need to Internationalise and commercialise our IP through clusters, improving our investment, forging productive partnerships all enabled by a high speed network which will reach all New Zealand communities by 2003. This is possible through partnerships and effective use of resources.
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