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Brislen on Tech

Paul Brislen, Editor. 18 May 2018, 5:13 pm

Budget [not] for tech

Not a busy Budget for tech this year - in fact, after having the UFB and RBI projects priced up in years gone by, it's safe to say this one isn't a tech-centric budget at all.

Research and Development tax credits get an airing, as was signaled well in advance. Now, if you spend more than $100,000 a year on R&D you can claim 12.5% back, which is nice.

Currently New Zealand's R&D spend is woeful. The OECD average is 2.4% of GDP and we don't even make it to that meagre sum. Instead, the government has set a stretch goal of hitting 2% which is quite astonishingly low.

The problem is, and has always been, spending in the private sector. When you look at government spending (with public money), New Zealand is on par with the rest of the world. When it comes to private money, New Zealand companies simply don't invest in R&D on the scale that's needed.

Tax breaks should help in that direction.

I'd like to see us hit 2% before the next budget and push on towards the 2.4% average and beyond. We can do it - we love to develop new ideas - so let's make this something we can deliver on.

Other than that, and an extra million a year for the cyber-security threat team CERT, there's not much to report. Health gets a huge uplift which hopefully will flow through to more efficiencies and that means digitization, but otherwise this is a sitting down budget for the sector.

NZ Herald - Budget: Few surprises in Govt's science and tech spend

NZ Herald - Budget infographic


FAANGS for the memories

One of the reasons we have to do more in this sector is because of the fangs. No, not fangs, FAANGS. Facebook, Apple, Amazon, Netflix and Google (FAANG) are taking over the world and that's not hyperbole.

Between them they control what news we see, what entertainment we purchase, our online shopping experience, and even the most fundamental feature of them all, finding the websites, names and addresses of all those providers in the first place.

New Zealand has no place on that list. We have no companies even remotely capable of busting into that group. We have precious few tech companies even remotely in that field and, since Xero fled to the Australian stock market last year, we have little presence on the bourse here.

Digital goods should be the mainstay of our shiny new economy. I know this because I went to the Knowledge Wave conference nearly 20 years ago, but of course we're still here, waiting for the gift that is the weightless economy.

So we're late to the party, even though we sent out the invitations so long ago, but we're not going to miss it entirely. We have the skills, we have the physical infrastructure, we have the need. Now all we need to do is get on and build the companies and solutions that the world wants.

Given the way the US-based companies have migrated from "do no evil" to "hey we build robots for the military and will sell your soul and metadata to propogandists for a dime", can we really do any worse?

NZ Herald - Time for NZ to grow FAANGs



Net Neutrality_3.jpg

Ref: Laurel or Yanny? What We Heard From the Experts



The Neutral Zone

One error we don't have to worry about correcting is the removal of net neutrality rules. The US government has just knocked back a change to the rules proposed by the Federal Communications Commission (FCC) that was loudly supported by the network operators and opposed by anyone who uses the networks.

This is a good thing because net neutrality has delivered us so many new products and services that taking away that basic fundamental balance would have been insanity. So of course that's what the current US government had hoped to do.

But what is net neutrality and why does it matter?

In effect it's a requirement that telcos will treat all bits on their networks the same way. No speeding some up or slowing some down. No giving some bits away for free while charging for others.

It means that a young upstart company can build a product and launch it into the market safe in the knowledge that they don't have to buy their way in to the consumer's hearts and minds, they can simply compete on the product or service itself.

It means the incumbents can't buy their way out of losing market share. Not that they haven't tried. Comcast, a large US carrier, famously throttled Netflix delivery until Netflix paid a ransom (there really is no other word for it) to have its traffic delivered at full speed again.

As a consumer of data I would be livid if my telco decided to chose what I would get at full speed and what I would get at a slower rate. It's unacceptable and as far as I'm aware it doesn't happen in New Zealand.

What does happen, however, is that some telcos sign cosy deals with some content companies and then give away access to those companies' products and services for free.

Most people don't see a problem with it. The customer gets access to Netflix or Twitter or English Premiere League football without paying for the data charges. I've recently installed Vodafone's DreamLab app so my phone can help cure cancer while I sleep and the data it sends back to base is zero rated if I'm a Vodafone customer.

But that does break net neutrality. Paul's Palace of Video Delights won't be able to get a foothold in the Spark market while Spark offers Lightbox with no data use because my customers won't be able to get the same benefits.

Fortunately it hasn't really been a big issue in the New Zealand market primarily because we've moved swiftly to an "all you can eat" model so offering zero-rated data isn't as big a deal here as it could be.

But we will have to be vigilant if we want to stay ahead of that particular game.

National Public Radio - Senate Approves Overturning FCC's Net Neutrality Repeal

Gizmodo - Senate Votes to Save Net Neutrality, Proving Shame Still Works Sometimes



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