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Hon Paul Swain to Jade Partner Convention 2000

Minister for Information Technology
Hon. Paul Swain


Address by the Information Technology Minister, Hon Paul Swain to
Jade Partner Convention 2000

5 April, 2000

Thank-you for the opportunity to talk to you today about electronic commerce and government policy. In fact opportunity is the underlying theme of my speech - particularly the opportunity that change can open up.

It is interesting to note that probably all of us in this room had not heard of the internet 10 years ago. Yet today the internet is everywhere.

During the recent tests against Australia you could even send email to cricket commentators Brian Waddle and Jeremy Coney, so your views could be aired during the Dilmar Tea Party each afternoon. And in New Zealand, if the sports people are talking about it, you know it must have penetrated deep into the national psyche.

So this represents a significant change. Indeed the Internet - so the rhetoric goes - changes everything. Let me illustrate with a few examples.

Recently the appropriately named and unknown Wellingtonian performer Melayne Web scored a significant recording contract with a company in the States. How? A song she’d written, recorded and uploaded to the Australian music web site mp3.com.au, spent 2 months in that web site’s top ten, generating international interest. The Internet has certainly given her an opportunity she wouldn’t otherwise have had, and her life has changed as a result.

As you are aware, the Stock Exchange now has a New Capital Market for small businesses. The first in line to list on this market is Mowbray Collectibles – a business that specialises in trading stamps and rare-books.
The Internet is a big part of the reason that Mowbray Collectibles is expanding.

As Director John Mowbray says, “we are not a total Internet company, but we are certainly using it. Our opportunities are online.”

Mowbray’s is based in Otaki. Both the nature of the business and the Internet makes the physical location of the business immaterial. This is an important lesson for Economic and Regional Development initiatives.

And of course I’m sure you are all aware of Virtual Spectator, the application that enabled broadcast via the Internet of the America’s Cup races to thousands of paying customers around the world, including a yachting fanatic friend of mine in Florida.

The lives of creators Craig Meek, Ian Taylor and others involved in Virtual Spectator have certainly changed. They now have an internationally expanding business that could not exist without the Internet.

And finally, I’d like to mention Woolnet. When we hear people talk about the knowledge economy and electronic commerce, we tend to think exclusively in terms of high tech industries.

It is a testament to the skill and ingenuity of Kiwis that we have managed to make a reasonable living based on shipping huge quantities of primary products half way round the world. The Internet is not going to change the fact that primary products will continue to be a significant part of our exports.
But electronic commerce will definitely change the processes used for trading these products, and this will assist the continued competitiveness of the rural sector. Woolnet is one example. Others are in train, like the New Zealand developed Ecomex system for electronic trading of timber products.

For a country like New Zealand, the tyranny of distance has always been one of our major difficulties. New Zealand is about as far away as you can get from anywhere else, and still buy good coffee – in fact some say better coffee than you can get in France.

So it’s not a question of whether - it's a question of the degree to which we embrace ecommerce.

With no disrespect to Stephen Tindall, we don’t want New Zealand to be known as the Warehouse of the South Pacific. We don’t want to compete on ever decreasing prices.

We want to compete on quality, skills, ingenuity and creativity - the “cool factor” of our products and services. Electronic commerce is the tool that will enable more people to participate in the economic growth and prosperity that the new government is looking to stimulate.

Electronic commerce gives New Zealanders unprecedented opportunities to participate in the global – and increasingly globalised – economy. And the opportunities are not limited to big companies, or to the main centres. Small and medium businesses, and the small towns and rural areas will all benefit, if we play our cards right.

So what is the role of government in all of this?

The government has stated that one of its fundamental goals is to grow an inclusive innovative economy for the benefit of all.

Electronic Commerce will play a vital role in achieving that goal.

We believe that the government has a duty to help facilitate the new economy in a way so that all New Zealanders can benefit.
New Zealand needs to become a Net-Smart economy in partnership with the private sector. There are some exciting things happening at the moment, but it is patchy. One or our roles is to build awareness out there in the community - awareness that electronic commerce is fundamentally changing the rules of business

Awareness too that ecommerce will alter how both the economy and society operate. We need everyone to be talking about the opportunities - and threats - this presents.

The government’s vision is to work in partnership with the private sector and with local communities. Contrary to popular expectations, it's not about government paying for everything – it's about government “adding value” to initiatives in the private sector. It’s not about picking winners, but creating the kind of environment that supports initiative, innovation and gives a helping hand to good ideas.

As an example, the government is setting up an Incubator Development Programme to be managed by Industry New Zealand. The programme aims to provide capable individuals and small businesses with skill-based assistance to develop their ideas to the point where others can invest in them.
In a nutshell our goal is to make it easier for potential winners to pick themselves, and for as many of our people as possible to enter the race.

So that’s the theory.

In practice there are three intersecting areas the government intends to address - electronic commerce itself, electronic government and the digital divide.

Firstly, let's look at ecommerce.

Work is already underway on development of a New Zealand ecommerce strategy in partnership with the private sector. We’re also planning to hold an Ecommerce Leaders Summit later this year. One of the aims of the Summit is to demonstrate that this government is serious about ecommerce, and that it wants to work in partnership with the private sector to implement and ecommerce strategy.

A good practical example of this is to require all government agencies to register their purchasing requests online through the Industrial Supply Office. Once we demonstrate the opportunities this system offers for businesses it will open them up to a new world of suppliers and customers, and should ultimately lower their costs of doing business generally.

Of course for any of this to work we must get the legal environment right. Many of our laws and regulations reflect a paper-based world. The Law must be changed to allow for the use of electronic technologies. My officials are working on an Electronic Transactions Bill which we plan to pass this year. The Bill will put electronic transactions on the same footing as paper ones.

We also want to make sure that there are no roadblocks on the information highway. That’s why we are conducting an inquiry into telecommunications. The Inquiry will consider the specific issues of interconnection with Telecom’s network, Telecom’s Kiwi Share Obligations, number portability and administration, the management of Internet traffic and, most importantly, developing New Zealand as an information economy.

It is a truism that if we want an ecommerce enabled private sector, then we must have an egovernment enabled public sector.

The New Zealand public sector has some leading edge examples of egovernment for instance the work of the Companies Office. But in more general terms New Zealand lags behind similar countries overseas. Our intention is to catch up fast.

Our vision with egovernment is to provide better government services and information electronically, and to build a better relationship between government and citizens. It is as important as the future of democracy itself.
We need a service that’s at least as good at service delivery as the private sector. That could mean anything from being able to pay your tax online, check out the latest piece of legislation, register your car or even respond to an online referendum at home during the half time of a Super-12 game.

The third area is the digital divide.

Closing the gaps is a key theme for the new government. As part of our broader policy we have to address the digital divide problem which sees the emergence of a gap between those who are ‘information rich’ and the ‘information poor’.

The advent of the Internet and the computer has raised the literacy bar for everyone. The good news is that those who have access to the Internet also have increased opportunity.

The bad news is that this leaves those with no access that much further behind.

Access is the key. It is as important an issue as the provision of the “bricks and mortar” schools issue was in the 40s and 50s. Hence work on the digital divide will focus on connectivity and access, skills development and computer literacy.

The education sector is the key to this. The skills necessary for people to succeed in the information age have to be grounded at school and in the tertiary sector. Making sure that everyone has access to the new technology is a major challenge for the government. We will need the help of the private sector.

As I said at the beginning, the underlying theme of this speech is opportunity.
Electronic commerce and the Internet have already delivered new opportunities to New Zealanders.

The government's role is to provide vision and leadership to ensure that the barriers to the development of ecommerce are removed, to close the “digital divide: and to make sure our own house is in order. We need to ensure that all New Zealanders are in the loop.

The key issues to remember are ecommerce, egovernment and the digital divide - all pose their own challenges and opportunities.

It wasn’t so long ago that we all thought fax machines and mobile phones were pretty flash - now they’re just part of life. The Internet and the World Wide Web will soon become the same basic everyday tools.

New Zealand business and the community can benefit from the changes ahead - if we go about this in the right way. Where once New Zealand was isolated by the great wash of water between us and the rest of the world we’ve now got the opportunity to be at the centre of the new global economy.

It’s up to all of us to play our part.


ENDS

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