Archive for the 'Economic Development' Category

North Canterbury Business Awards…

Published by Ben Kepes on May 15, 2008 in Economic Development, New Zealand and Waipara. 0 Comments

One of the roles I fill is on the board of a Economic Development Agency, Enterprise North Canterbury. ENC has just launched the North Canterbury Business Awards, a new annual award to showcase the successful businesses that are to be found in North Canterbury.

I’ve been asked to judge the Exceptional Sustainability Award, co-judge the Exceptional Tourism Provider Award and sit n the panel that decides on the supreme winner of the North Canterbury Business of the Year.

It’s a great thing to highlight success in our region. More information can be found in this flier or at the website of Enterprise North Canterbury.


Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

What place Government?

Published by Ben Kepes on May 15, 2008 in Economic Development, Efficiency, Governance, New Zealand and Society. 0 Comments

Warning - here follows a rant not at all related to my usual subject matter!

We’ve seen some governmental debacles in the last few days. Firstly the New Zealand taxpayer agreed (or their representatives did anyway) to buy the rail network back off Toll holdings. Bear in mind that this is the same rail network we sold years ago, it’s fallen into disrepair and is under-utilised. It appears that the selling party played a bluffing game, feigning reluctance to sell in order to ratchet up the price.

In any private sector setting this sort of game-playing would be picked up by the other side. In a situation where the negotiation is occurring headed by elected representatives with very little real world experience, and in positions of power vastly greater than their skills, experience and ability would deserve what happened? The said negotiators took the bait - hook, line and sinker - paying what analysts believe is an over-inflated price for the business.

Not only that but it now appears the deal was full of insider trading, whereby the managing director of Toll holdings personally bought a large parcel of shares only days before the deal was inked - his personal windfall is estimated at over $300k.

And then today it appears the the former head of a large government department had a fictitious PhD on her CV. Again in the real world CV’s are checked for authenticity - one can only surmise that the powers that be who hired this employee were so excited by the letter PhD that they omitted to do standard due diligence.

So what’s the answer then? Well perhaps electing representatives with a bit of nous would be a start, moving to a model where politicians and civil servants where accountable for their actions would be another.

Either way we have an ongoing saga of ineptitude.

Right - that’s off my chest now…..

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

How does our broadband really stack up?

Published by Ben Kepes on May 7, 2008 in Economic Development, Efficiency, IT, New Zealand, Society and Strategy. 2 Comments

The Information Technology and Innovation Foundation (ITIF) think tank from the States has compiled a report ranking 30 countries broadband offerings by a composite measure based on three indicators: household broadband penetration, average speed weighted by percentage of subscribership (Mbps), and lowest available price per Mbps.

The graph is interesting reading, it shows that New Zealand is relatively close to Australia, the UK and the USA on a composite score and ahead of what is held up as a Hi-tech success story, Ireland. Could it be that Ireland has got maximum utilisation out of the connectivity is has available to it (not to mention the EU money it has available to it), and if this is the case perhaps New Zealand’s economic growth to internet service ration is the real issue? ie we’re not using the connectivity we have for the right things?

It’s a contentious topic, even more so given that it’s an election year - but once again it begs the (mis)quote;

“faster broadband? you can’t handle faster broadband”

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

Build it and they’ll come…

Published by Ben Kepes on May 2, 2008 in Economic Development, Efficiency, IT, New Zealand, Society and Strategy. 2 Comments

I got an email this afternoon from Velocity Networks up in Hamilton. Velocity is a partnership between local government and tertiary institutes which aims to put in place fibre infrastructure for the Hamilton metro area. In their own words;

the combined fibre networks span the city, providing ultra-high speed broadband internet access to commercial buildings at speeds of up to 1Gbps (1000Mbps). Operating as an ‘open access’ community network, users are free to subscribe to services from a range of application and internet service providers on the network.
The project has a number of implementation phases and is expected to be completed by 2010. The initial rollout of the extensive fibre network has been funded by a $3.3 million grant from the Ministry of Economic Development, as part of the Government’s Digital Strategy.

Velocity say that;

A number of well known service providers such as WorldxChange, Kordia, Orcon, FX Networks and Lightwire have already signed up and are now offering their own data and voice solutions across the network…We also have several local internet cafés offering internet access through our fibre network

It’s pretty well accepted now that no one player can muster a business case to put this sort of infrastructure into place. It’s also argued that fast internet is a barrier to growth in this country (I’d add that it’s only one barrier and we need to think about removing the other ones as well). This sort of arrangement is an example of what we should be aiming for.

And by way of proof that it’s actually happening, here’s a picture of the trenching machines hard at work!

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

Super normal profits (and it’s not a telco)

Published by Ben Kepes on April 24, 2008 in Economic Development, New Zealand and Society. 2 Comments

It seems in New Zealand that we’re quick to admonish corporates that run high profits and seemingly provide bad service. The excoriation that has been levelled on our telcos of late has been a good example of this.

One cannot help but think that much of this criticism is politically motivated (it is after all an election year - and headlines of “foreign owned corporate milks massive profits and provides dodgy service” really get grey-power all fired up and give Winston Peters a few more votes).

Why then the total silence around the super normal profits, offshore ownership and almost total lack of service that we get from our banks? Recent profit reports have been pretty fat but the conspiracists among the political parties have remained silent about them - I wonder why?

Anyone got any answers?

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

National’s plans for FTTH

Published by Ben Kepes on April 23, 2008 in Economic Development, Efficiency, IT, New Zealand, Society, Strategy and nzwc. 1 Comment

Everyone will by now have seen National’s plans unveiled yesterday for a $1.5b investment in FTTH. John Key’s announcement is below;

Lots of commentary about this already, Rod is pretty positive as it reasonably neatly dovetails with the work the NZI has done (and which Rod was involved in).

Now ubiquitous broadband is a good thing, I’d personally love it. But being a good thing, and being the cure for our economic ills are two very different things. John Key claims FTTH is the productivity unleasher that will move us up the OECD economic rankings - he gives the examples of almost free local toll calls, cheap international calls, movies on-demand and telecommuting. Only one of those things is closely linked to productivity and there is no empirical evidence that a move to a telecommuting enabled world would in fact boost productivity.

I’m not pouring cold water on the idea - I applaud National’s vision and courage - I only hope that the analysis into true return is done such that decision can be made that actually help New Zealand win.

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

Asset grab no solution for internet infrastructure

Published by davidware on April 17, 2008 in Economic Development, Efficiency, IT, New Zealand, Society and Strategy. 2 Comments

Editors note - the following is a reprint from The Independent Financial Review - It is an interesting counterpoint to the current broadband discussion taking place in New Zealand

There has been more baloney than usual in the media lately about New Zealand’s internet infrastructure – or the lack of it. Much of this is driven by a report from the New Zealand Institute which put forward a worthy-sounding plan to ensure that 75% of the population is linked up by fibre optic connections within 10 years.

That’s not a bad goal, however the way NZ Institute boss David Skilling proposes to achieve this is by appropriating Telecom’s last mile company Chorus, along with the local assets of other Telcos, to create a price regulated government monopoly that will provide all the links between premises and telephone exchanges throughout the country.

Think of it as Stalin meets ‘Think Big’.

And the carrot for doing this? Apparently a benefit of $2.7 to $4.4 billion per year to the New Zealand economy. That’s an enormous benefit but the Institute assures us it will happen due to tele-presence (whatever that is) and the gravity defying Weightless Economy.

If the NZ Institute is really recommending that Government grab people’s assets, and create a monopoly one would expect it would have some pretty solid arguments to support its case. But sadly, while the supporting arguments may hold some credibility in academic and economic circles, in the real world they simply don’t pass even a basic common sense test.

Let’s look at their proposal in a little more detail. Firstly they plan to grab the fibre-to-the-premises assets of all the competing Telco’s in the metro areas, then roll fibre out into the suburbs to pick up 75% of the remaining premises’.

This leads directly to the first flaw in their argument; the institute fails to realise that almost all economic value is created in businesses not in homes. At work the internet is a great productivity tool, in the home it’s largely an entertainment medium. The Institute’s plan is to kill competition in the business districts of the country to ensure a rapid deployment of fibre in the suburbs. You’ll be able to download Trade-me and You-tube faster – but where’s the value in that?

To be fair though some value is created by people who work from home but for the vast majority of those people the existing copper networks do the job just fine. On the other hand most urban based business can already get access to fibre. The competition is growing in the major centres there are up to four competing fibre providers and competition even exists as far a field as the West Coast so it’s hard to see where $2.7 to $4.4 billion of benefits per year will come from.

To add insult to injury the Institute plans put the rural sector, where much of the real value is created in the NZ economy, in the ‘too hard’ basket. Most farms for example will fit into the ‘other’ 25% that won’t be served within the next ten years.

The institute believes that fibre is a commodity that isn’t differentiated so nothing significant would be lost by having a monopoly providing a homogeneous service.

In practice nothing could be further from the truth. In the many centres were competition exists IT managers make their decisions’ by considering factors such as network diversity (should I use one provider or keep them honest by using two), network design (stars and circles are popular and have different price/performance characteristics), reliability (some operators fix things faster than others) and of course price.

Under the Institutes plans competition based prices will be replaced by prices incorporating a guaranteed, government regulated profit margin.

It’s hard to imagine how these consumers could possibly benefit.

Having created a monopoly the Institute then proposes that telecommunications companies lease fibre infrastructure from the monopoly and create their own services on top. Mr Skelling cites the city of Amsterdam as an example of where this model has been deployed. The writer has been unable to track down any independent research that quantify’s the benefits to Amsterdam of this adventure. In fact he rather suspects that the plans were hatched in one of Amsterdam’s famed ‘coffee shops’.

The fact is that so called ‘Service Based’ competition in telecommunications simply doesn’t work. This is because at the so called service level it’s almost impossible to differentiate telecommunications services. The cellular telephone market is a high profile example of where billions of dollars have been lost by companies trying to build Service Based business on top of third party infrastructure. Disney for example failed when it developed a Service Based business to market cellular services to kids – the kids stuck with their existing operators and Disney gave up. A viable telecommunications company needs infrastructure and services to succeed.

A proposal that forces companies to divest their assets, destroys a vibrant competitive market, and creates a monopoly is not something that should be considered lightly.

These are activities that strike right to heart of our economy and our society. As a prerequisite to such a radical proposal you would have expected to see real market failure and obvious economic benefits accruing from any subsequent proposal.

In this case the NZ Institute has clearly failed to demonstrate either, market failure or clearly defended benefits. The market for last mile network services is competitive, dynamic and growing at a pace that meets customers’ demands and the benefits from their monopolistic proposal are opaque at best.

By David Ware

Managing Director TeamTalk Ltd

www.teamtalk.co.nz

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

What I don’t understand….

Published by Ben Kepes on April 11, 2008 in Economic Development, Governance, New Zealand, Society and Strategy. 1 Comment

Is that Yahoo shareholders are able to bring an action against directors who block a Microsoft takeover bid which would see them realise higher vale for there shares…

but..

Shareholders in Auckland International Airport are left in the lurch by the New Zealand Government’s unilateral decision to block the takeover bid made by the Canadian Pension Plan Investment Board..

I don’t get it - enlighten me peoples

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

Where is the vision….

Published by Ben Kepes on April 10, 2008 in Design, Economic Development, Manufacturing, New Zealand, Society and Strategy. 3 Comments

I’d been avoiding posting about the recently signed free trade agreement between New Zealand and China. Every time I talk about trade, some readers see it as a last ditch attempt to save New Zealand manufacturing, bolster my own business and keep New Zealand isolationist a la Muldoon and the 70’s.

So a disclaimer… this is written from a macro economic perspective and, I hope, with a degree of neutrality. So here goes….

Reports this morning write that New Zealand Trade Minister Phil Goff was on a mission to Hangzhou today, looking for business opportunities presented by the Free Trade Agreement with China. Goff is reported as saying;

We have a number of promising trade prospects in this region, including for our dairy and wood exporters

So this is what commerce in New Zealand has come to? Selling unprocessed milk and timber to offshore interests who will then process and add significant value to it, and reap the economic returns from that value add. How about a visit to New Zealand designers Phil, encourage them to form partnerships (or better still open their own factories) in China to take advantage of the slave labour and polluting processes smiley happy Chinese workers enjoying the clean air and green surroundings and the proximity to other markets.

Sorry - but the lack of vision really makes my blood boil. And yes I know that the computer I’m writing this on and the cellphone in my pocket are made in China - it’s not about where something is made, its about New Zealand potentially losing it’s ability to add value to raw commodity products.

’nuff said

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]

No One solution

Published by The Unreasonablemen on April 9, 2008 in Economic Development, IT, New Zealand, Society, Strategy and nzwc. 2 Comments

Last week I wrote the post “Isn’t the answer mobile?” which created a great deal of interest, commentary & thought provoking questions. Thanks to those who commented, some of what you wrote provides the basis for this post, as well as comments on Rod Drury’s blog post about FibreCo.

I guess the best starting point is to say last weeks post should have been titled “Isn’t PART of the answer mobile”. It’s clear from both these posts that mobile technology alone won’t suffice, but equally importantly neither will fibre. The FibreCo idea is audacious, and the vision both compelling and energising (which I suspect is the major goal behind it), however it does have a few weaknesses. I’m not here to throw stones at it, because I love that at least someone has provided some constructive solutions to our fast internet conundrum, what follows is my own attempt at conceiving some more.

In my opinion FTTP (key being P not H) (editors note - FTTP is Fibre to the Premises, as oposed to fibre to the Home) is only needed by a small (but hopefully growing) group of businesses. Not everyone needs a raging torrent of internet access, just like not everyone needs Mac trucks, PDA’s, high definition printers or computers at all. Hand in hand with this, I must also admit that I’m not sold on the 1:1 causality that goes with the belief that ubiquitous fast, cheap internet access will drive economic benefits. I don’t see massive queues of ‘weightless businesses” just waiting for fibre, I also don’t see all the other fundamentals (like wages, taxes and support) being addressed to drive the weightless economy. Maybe it’s chicken & egg, but I’m not convinced. Simon Arnold also asks if you need ubiquity in his comment on Rod’s blog”

But if you go back and look at the source of the benefits being claimed by NZI that make up the $2.7-4.4 billion per year (see here) most are able to be captured with much lower than the 75% penertration they are justifying the need for public investment off. I do think a bit of hard nosed analysis of marginal cost of provision versus marginal benefit is warranted.

Secondly, if you do need that kind of data throughput, you should take Bwooce’s advice …

If you want fast internet access for your business, site your business appropriately. ….. Just as you may choose to live next to an airport, you may choose to live in an area with crap internet coverage

If I may extrapolate this out a little, you may want to even have the position that if fast, large bandwidth internet access is important to you, you should pay for fibre to be connected. The great news is that Telecom’s cabinetisation program will make this more affordable. The way I read it (& again-not an engineer!) Telecom will be laying a lot of ducts & the distance to the Cabinet is going to be a lot shorter… so it should be that the cost of getting Fibre installed will decrease. This position should hold true if you are a business or consumer who wants IP TV.

Having just said Fibre is just one of the solutions it’s fair to say that I also believe that ADSL broadband has a role in our future. For some it is more than adequate. Again, as Bwooce says 24 mbps is plenty for email, internet, video conferencing etc. By that, it addresses the NZI’s ‘Telepresence’ and ‘Remote working’ economic benefits. (as a sidepoint even Cisco’s full monty Telepresence system only requires 15 mbps & that’s way more demanding than a web-cam type approach!) For digital media and other data intensive sectors is ADSL going to be enough? No, see point 1, buy fibre…

Mobile….I caught up with some folks about my previous mobile theory. According to them (the royal them) there area bunch of things you can do on a cell site like sectors, carriers & polarisation which all work to decrease contention, optimise spectrum use and generally make the experience better for the consumer & more economic for the carrier.

Despite popular opinion, ISP economics is important, if they can deliver services cheaper (and make an operating margin), then generally the price to customers will be cheaper, but it’s not all about price. Again, according to ‘them’, doing all these things could allow you to deliver speeds of up to 1 Mbps (maybe more). This speed would definitely improve if high demand users went to fibre. I know 1 Mbps ain’t fantastic against global benchmarks, but again for some it would be a great leap forward and more than suffice. I’m thinking of people on dialup (and there are still nearly 700 000 of those) or old plans (256kbps for instance, again plenty of those). Tom Chignall of Vodafone commented on Rod’s blog

We don’t need a fibre vision - we need a broadband vision which connects the people of this country to each other and to the outside world.…. Our view is that wireless has a major role to play…., The technology is in place today to deliver as good an experience as I get over my Telecom service (resold thro ugh Vodafone!)in Auckland’s central suburbs. Wireless speeds are doubling very soon and we have Telecom and NZ Comms entering the fray with similar technologies.”

I agree with Tom’s major points , we need a vision that connects NZ to the world in the most appropriate way for them. I think this vision means when you buy a fast internet plan, you are going to have to make some choices based on your particular needs. If you are one of those companies or people feeling massively restrained by ADSL (financially, gaming wise, IP TV wise) then you are in one camp. If you get on the internet to ‘get the email’ like my mum, dial or mobile technology might be fine for you. The reality is though, whatever you choose, you should be aware that you are going to pay for it ….. there are no free rides. To me this is the crux of the issue for NZ . Just look at the links above, price isn’t the impediment (we’re cheaper than the OECD average), fast speeds are available, so why so many dial and low speed plans? No need for them?

For all those who did comment and weren’t referenced, your input did help, again many thanks.

Share the love...
[Ask] [Bloglines] [BlogMarks] [del.icio.us] [Digg] [Facebook] [Faves] [Google] [PlugIM] [Slashdot] [Sphere] [StumbleUpon] [Technorati] [Email]