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Brislen on Tech

Paul Brislen, Editor. 31 March 2017, 5:16 pm

Research and Development developments

Good news - New Zealand is spending more on R&D than ever before. Bad news, we're still spending only a fraction of the OECD average and certainly not enough to propel us into the top half, let alone become world leaders.

The problem is twofold. First, we're a small country with an strong emphasis on primary produce that doesn't lend itself well to R&D spending. It should, don't get me wrong, but for whatever reason we are stuck mass producing commodity items and shipping them overseas where value is added. Our biggest export appears to be dried milk which, let's face, isn't so much adding value as taking it all away.

Even our fish is sold internationally at rock bottom rates. One or two dollars per kilo - far more cheaply than you can buy the fish here in New Zealand markets.

So we don't spend a lot on our largest economic segment.

And secondly, we tend to rely on the government spending public money on R&D and don't bother with private spending.

There's a reason for that. Our public spend is on par with the rest of the world but what we lack is a way of encouraging private spending. Tax breaks. Internationally, companies that spend a lot of R&D get to claim a large percentage back for tax purposes, and so companies in their growth phase spend a fortune on R&D and that's a very good thing.

What we do is invest public money through a variety of government agencies. Callaghan is one, so is the New Zealand Venture Investment Fund and both do a solid job of putting money on the table.

But both are run as government departments meaning both have to show due diligence of the highest order, both have come under political fire for daring to spend money on the "wrong companies" and so both take a cautious and careful approach to investment.

This is not the way to do it.

Callaghan has even spent money on a video talking about failure because failing means you're trying and trying means you'll hit the target one day and it'll be a big target.

Think Google or Twitter or Facebook or Uber. Well, maybe not Uber, but you get my drift. Innovation comes out of left field and companies that are trying these things tend to be unstable, pivot like crazy (Facebook was not Facebook when it first launched) and simply wouldn't qualify for government funding in this way.

But R&D tax breaks - that works.

Sadly, tax credits are one of those areas that seem to simply be off limits for the major political parties and so we languish in the rankings.

But hey, we do dry milk like nobody else. It'll be decades before that gets disrupted, right? Well, years at any rate. Well, minutes… 

StatsNZ - R&D survey results

NBR - R&D spend leaps - but there's a catch

NZ Herald - NZ companies lift spending on R&D but still lag behind OECD average

NZ Herald - Analysts welcome R&D investment

Reseller News - ICT leads way in New Zealand R&D surge

RNZ - NZ's R&D spend rises but still lags globally


New report from Government

Hot off the presses comes a new report from Minister of Communications Simon Bridges that sets out how Government partners with New Zealand's digital sector.

Building a Digital Nation recognises that the digital economy "is a key focus of the Government's Business Growth Agenda" and that Government's role in joining the various sectors of the economy to the digital world is a critical one.

"The aim is to ensure we are focusing on the right areas to enable New Zealand to become a leading digital nation - a nation with a thriving digital sector, where our businesses, people and government are all using digital technology to drive innovation, improve productivity and enhance the quality of life for all New Zealanders," says the release that accompanies the report.

The report focuses on four key areas: 

  1. A thriving digital sector, where digital firms make up the larger part of the sector and partner with other sectors to produce new products and services.
  2. New Zealand businesses across all sectors of the economy that could be using digital technology
  3. "Connected and confident digital New Zealanders - those who know how to use VPNs to watch television, presumably
  4. A digital government - that is, the public sector using digital technology "to work smarter, make better decisions, generate value from New Zealand's information, and transform the way services are delivered".

The full report is here.


Connect Four

I remember the Southern Cross Cable launch party, if only because Theresa Gattung was announced as the new CEO the same day and she happened to be at the launch event. After a few wines I bowled up to her, gave her my card and asked for an interview. She read the card, said no and walked away.

That was 2000 and plenty has happened since then but one thing has remained the same - Southern Cross was New Zealand's only serious link with the outside world.

Its figure-of-eight loop meant it was technically two cables (as various executives have been at pains to point out to wayward journalists ever since) and capacity wise it's had more than enough to cover New Zealanders' needs for downloading cat videos and making phone calls to London.

But there have always been suggestions that because we have only one provider we're just not getting a fair price for international connectivity. Every year, Ross Pfeffer would be rolled out by Telecom and then Spark (which owns and runs the company that runs the network) to remind us all that SCCN's Kiwi pricing is based on its Australian pricing and they have competition so by default we do too, and that the international leg's share of the total cost of delivering data to an ISP is trivial, and yet somehow these doubts remained.

But for my mind a much more urgent problem is that the two halves of the cable land on either side of the Auckland peninsula about 24km apart on top of an active volcanic field.

Sure, the risk of something happening is quite low (touch wood) but if it were to happen, the damage and destruction would be quite high.

I've long advocated for a new cable that connected somewhere other than Auckland and now, finally, we have one.

Vodafone, Spark and Telstra have clubbed together and built a cable that runs from Sydney to Raglan, giving us true route diversity and redundancy for the first time ever.

What impact will this have on pricing? Not much, I'd imagine. At least, not straight away, but soon the Tasman Global Access (TGA) and Southern Cross Cable will be joined by Hawaiki (due to go live in 2018) and the replacement for the Southern Cross, called Southern Cross Next, which is due to enter service in 2019.

So by the time the UFB is built and we're all watching 4K streaming video on our Google Glass 2 heads up displays while we cruise in our driverless cars, our international capacity will be able to keep up.

And that's no bad thing.


Techblog - Tasman Global Access cable goes live

NBR - Transtasman telco cable completed, boosting NZ's international bandwidth

The Register - Kiwi cable goes live, and it's nowhere near a volcano

Reseller News - Tasman Global Access cable lights up


US ISPs get the OK to sell customer browsing data

Sure and if you've got nothing to hide you've got nothing to fear.

The US government (for want of a better term) has passed into law a rollback bill that removes all the customer protections introduced in the US around ISP customer data habits, and sadly that means we're about to enter a new era of big data mining and customer's behaviours.

Although it won't directly affect customers in New Zealand (unless you happen to be using a US ISP for some reason), the push from US marketing wonks tends to end up lapping at our shores in one form or another.

In New Zealand we have laws that say quite clearly that ISPs can't gather data for one purpose (eg what websites you want to look at) and then use it for another (eg blackmail marketing madness), which helps protect us from this sort of madness, but the US market is now a free for all.

Amusingly, at least one angry punter has suggested that if ISPs can now sell user data without their permission, he'll sign up to buy the browser histories of all sitting Republican congress folk and senators.

But of course, looking at the current state of affairs over there, I doubt there's anything in those logs that could embarrass the Republicans any further.

NBR - US Congress votes to put people's web browser histories up for sale

The Register - Your internet history on sale to highest bidder: US Congress votes to shred ISP privacy rules

The Guardian - Trump poised to sign away privacy protections for internet users

RNZ - New spying legislation passes


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