Closing the gap: New Zealand’s ICT productivity

01 Nov 09

In the latest installment of Industry Voice, Andrew Hunt, Managing Director of Kinetics Group and Deputy Chairman of NZICT, writes about the role of the New Zealand Government’s recently-established Taskforce 2025 in improving the country’s productivity.

ICT is a core platform for the economy, both in terms of providing productivity gains for individual businesses, and in
opening up opportunities for generating ‘weightless’ digitally-based exports, such as software and applications. Australia will be the primary market for many of these exports, therefore being able to access this market is of critical importance.

There are five areas that need to be focused on, invested in and promoted to fully realise the potential returns of an ICT-based economy. They are: infrastructure, people (skills), applications, process and attitude. All are co- dependent and are equally the weakest link if not developed. Australia has a well-developed, cohesive plan for its digital economy that we should, at least, mirror if we intend to improve productivity and close the income gap with our major trading partner.

Ubiquitous broadband is the foundation that enables these other areas to become functional and exponentially
productive. The greatest impact of the government’s Broadband Infrastructure Investment strategy is the potential to create ubiquitous network connectivity enabling the accessibility, availability and creation of a comprehensive set of applications which drive productivity gains.

In particular, the stated objectives of this investment will ensure New Zealand retains broadband connectivity parity with Australia that will effectively create a combined trans- Tasman digital economy of over 25 million people. ICT and technology companies can address this potential customer base with online services such as software, content, applications and video interactivity. Having low-priced international access to this market is of critical importance.

New Zealand also has the opportunity to be a global showcase for cloud computing and shared services, with locally developed applications servicing the public and private sectors. The small business segment is also critical, as it has the potential to exponentially improve its productivity by the smart deployment of ICT. Small businesses can now access applications previously the domain of larger corporate entities. But it is important that the investment in technology is matched with an ongoing investment in training, to ensure all employees in the business benefit.

NZICT recently submitted a number of recommendations to the 2025 Taskforce, summarised below:

  • Government to support the competitive entry of Kordia into the international broadband infrastructure market, to foster competition and reduce cost structures for New Zealand businesses.

  • Taskforce to support additional government funding to match an investment from the ICT industry in providing more digital devices for students attending primary and secondary schools.

  • Taskforce to note that ICT occupations are   typically higher-income positions and that increasing the number of ICT-qualified New Zealanders will have a direct impact on closing the income gap with Australia.

  • Taskforce to note that NZICT is working with the Ministry of Economic Development, Business NZ and other

  • stakeholders to develop a comprehensive ICT skills development and training program for targeted sectors, where the application of ICT is seen as particularly relevant to potential productivity gains.

  • Taskforce to note that NZICT supports the game development industry in its objective of establishing a world-class and scalesector, by the government extending the existing parcel of screen production incentives to incorporate digital content in a wider sense.

  • Taskforce to note that the geospatial industry can make an outstanding contribution to productivity by collaborating with central government, local governments and other sectors of the economy. Formulation of geospatial policies and action agendas by a joint public-private working group consisting of Land Information NZ and the Spatial Industries Business Association of NZ (SIBA) should be a productivity priority.

  • Government research and development funding to be closely tied to 2025 productivity and foreign exchange earning goals and initiatives.

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