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New Zealand’s Priorities in the Digital Revolution

Don Christie, Co-Chair of NZRise and CEO of Wellington-based open source specialists Catalyst, spoke at a recent ITP breakfast on how to realise the opportunities presenting themselves to us in the digital sector and how to take everyone on that journey. This post is part one of three and first appeared on the ITP site.

You can review Don’s slides from the talk here.

The digital revolution is developing and Aotearoa stands at a crossroads, where we can either position ourselves for success or for failure in this new age. Ideally we want to develop an economy that is robust and sustainable, and takes advantage of the economic, societal and environmental benefits that digital technology can bring.

The incoming coalition has a coordinated set if ICT and digital policies that are largely in line with those that sector groups, such as ITP, NZRise and NZTech have been advocating for many years. We most recently collaborated to produce the 2017 “Digital Manifesto” which is well reflected in party policies.

There are three key areas that need to develop if this is to succeed.

We need to ensure our economic prosperitycontinues to grow, but in a way that promotes ICT as a main player in our economy. This will be in line with the coalition’s goals of ICT becoming the second largest contributor to GDP. However, economic prosperity does not necessarily mean improved societal equality, so care must be taken to ensure that inequality, both digital and otherwise is reduced through smart policy and improved rights. Finally, open standards and open technologies will be the underpinning factor to allow both the economic and civil society in Aotearoa to achieve their huge potential.

Economic prosperity

At the core of the government’s ICT policy is a stated desire to at least double the GDP contribution of the ICT sector and make it the second largest contributor to this figure. This sector has created very high paying jobs and from a revenue and income perspective is highly distributive.

That requires us to shift the dial. Business as usual will not deliver to this goal. Government is New Zealand’s largest single user of ICT.

Government over the last 15 years has taken a stance that moves it from being an outcomes-focused creator of innovation to a pure play consumer of digital goods and services. This, along with poor procurement policies, as expressed in anti-competitive structures such as panels and “All of Government” deals, has been costly and constraining.

In order to lift the size of the ICT sector, government has to focus on increasing access to government projects for local companies. This has multiple benefits: higher high value employment, increased tax returns and lifting our export potential. For example, the New Zealand Herald recently reported that 20 multinational companies made $10 billion of Kiwi sales, while hiding their profits offshore and returning only minimal tax.

Economic prosperity in the digital era is going to require new priorities and a different way of thinking. The biggest challenge with what would seem to be the most common sense solution, is how to improve the export capability of Kiwi companies. A successful export market needs to have a good reputation, and that is initially acquired nationally which is where government support of the local sector becomes so important. By procuring from local companies the government shows faith in the sector and gets tailored solutions for a far better return than procuring from multinationals.

Yet the government of the past few years has persisted in making apparent short term savings but with no return to the overall economy and debacles such as Novopay occurring far more frequently than is ever reported in the media.

Compare this with the government awarding a contract to a typical New Zealand-owned ICT services company where it is estimated that 41 cents of every dollar spent is returned to the Treasury; a far better investment.

Agile, Open and Creative

We need to rebuild and celebrate a creative culture within government and make sure procurement welcomes outcomes-based solutions rather than skewing their favour towards one supposedly risk-free direction.  We also need to take heed of the lessons of the past which are that agile, open and open source approaches are consistent features of successful government IT projects. That’s what the Auditor General reported in 2012 but there are still no obvious or effective government strategies to adopt and systematise these lessons.

Too much emphasis has been placed on pre-built products, both cloud and otherwise and not enough on outcomes. The preference for “commercial, off the shelf” solutions has proven to be a largely high risk failure. These solutions often preclude open source platforms, they fail to integrate well, they do not support open standards and the required customisation often far exceed the benefits sought after in the original business cases.

We need to recognise that the most appropriately agile and creative companies are those domiciled in New Zealand. As New Zealanders we have an intimate understanding of the context in which we live and work.

This is not just because living in New Zealand forces us to be inventive and overcome challenges of remoteness but because local companies the world over are more appropriate for overcoming local problems.

Funding for research and science models need to support open science, collaboration and outcomes, rather than purely being based on journal publications and the direct commercial benefit. Often the commercial application of science is not instantly obvious, but knowledge is always beneficial and it will eventually pay off.

Don Christie, Co-Chair NZRise

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