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A Knowledge Economy, the Government's Role

Hon Paul Swain Speech Notes
Keynote Address New Zealand Computer Society Conference - Duxton Hotel, Wellington

I want to talk to you today about the knowledge economy and the government's role in its development.

New Zealand is a strong independent nation, we want to play a positive role in the globalised economy. We want to be able to play to our many strengths, so that all New Zealanders are able to share in the considerable benefits that will accrue.

It is critical, therefore, that we make a successful transition from what I'd call the 'old' economy to the 'new'. In other words, that we make the transition from an economy that is overly dependent on commodities to one based on knowledge -where knowledge not only adds value to goods and services, but creates value as well.

We must build on our strengths. That means, among other things, building on our successful primary production base, applying knowledge to what we already do well. A new breed of kiwi fruit or a process to harden pine is an example of that type of application.

So what are our other strengths?

We have a stable government system, a predominantly English speaking society, a good education system with a reasonably high level of skill. We are early adopters of technology and we are generally out of bed and doing business earlier than the rest of the world. We are innovators, and have shown ability in the product development field.

What we need to do now is to maximise our strengths and opportunities and work out how to proceed.

Government and business
The key to our future is a proactive government in partnership with the private sector.

This government rejects the old models of last century – the heavy regulation of the 70's and the hands off approach of the 80's and 90s.

We have taken a number of key initiatives. For example the establishment of the Science and Innovation Advisory Council. This council has been set up to deliver original and creative ideas on the transformation of New Zealand's economy into one based more on innovation.

On the investment front we have established Industry New Zealand to encourage the success of the essential small to medium sized businesses in this country. Industry New Zealand comes into formal legal existence tomorrow. It offers a variety of schemes ranging from funds for regional economies and individual business incentives. The SME market is the backbone of the New Zealand economy and we want it to be successful.

Trade NZ is undertaking a major e-commerce initiative, that will help small and medium exporters get hooked into the global economy.

There are a number of elements in building the platform for the knowledge economy. Let me touch on some of them briefly.

Skills, immigration and R&D
Obviously skills and education are critical. However when I am out meeting business people they raise the importance of retaining and promoting our skill base.

There are two opportunities here. Investing in the development of high end IT/business and science skills, and widening our migrant base to include skilled workers in areas we are in short supply.

Another key issue is research and development. We have announced a research and development government scheme to target new R and D, and we are currently looking at other options to promote more investment in this key area.

Of course if we want to be successful adopters of a knowledge economy then from a government point of view we have to lead by example – that leads me to e-government.

E-government is about IT making it easier for the public to interact with their government. And when we talk about government we don't just mean the Beehive, we also mean the public service, the state sector and local government.

The goal is to provide better government services and information, and to build a closer relationship between government and citizens. It is an important part of the future of democracy.

We are aiming for service and information delivery at least as good as the private sector – if not better. We want people to have their say and we want government to work better together to achieve that.

How exactly are we doing this?

We have established an e-government unit in the State Services Commission – headed by Brendan Boyle. It is developing an e-government strategy and is working on various projects which he will no doubt be able to talk to you about during his address later.

A top priority is the government's e-procurement project. By June 2001, the business case for the roll out of e-procurement will be completed. We are currently considering a range of models. But, whatever the model, e-procurement has some big advantages – it will reduce the cost of government, lower business compliance costs and it will act as the magnet that will pull our SME sector into e-commerce capability. We are determined to pursue this project with some urgency.

In the end we plan to have a more transparent system where people can participate in their democracy electronically - that can only be good for New Zealand.

E-commerce summit
One of my biggest projects this year is the government's e-commerce summit in Auckland in early November.

The summit's aim is to give businesses a practical roadmap for planning their move or next move into e-commerce. We want businesses from all over New Zealand to be involved.

Keynote addresses will focus on how businesses can become net ready, tips for keeping up with the e-commerce revolution and the best and worst of marketing on the Web.

A variety of workshops will be offered over the two days including very practical ‘How To’ sessions, industry sector workshops, and forums focussing on things like how to boost consumer confidence and exploit Internet opportunities.

We will also be presenting the government's e-commerce strategy at the summit and seeking feedback from those attending. The strategy will outline current global trends, identify where New Zealand is at, look at threats and opportunities, identify the role of government and spell out the way forward.

And we will be releasing our guide to e-commerce for small to medium sized businesses.

I am proposing an action team, comprising mainly business leaders to help us to implement the strategy, set targets and drive e-commerce take up over the next few years.

Digital Divide
A critical issue we have to face is turning the 'digital divide' into digital opportunity. This is not just an issue about the gap between rich and poor or skilled and unskilled it is also about the gap between town and country. I've heard of cases where farmers cannot send emails from their properties until the electric fences are switched off. This is not a good knowledge economy look. We are currently in discussion with the private sector to see how we can collectively resolve these issues.

That brings me to another element of a knowledge economy - the physical and legal infrastructure to ensure it can work. That was one of the reasons behind the telecommunications inquiry which reported back to me this week.

The inquiry team put in seven months of intense work on their report and it included some great input from industry.

It is now over to the government to decide what our response will be. I intend making that response before Christmas, and I hope to get any necessary legislative changes if required under way by then as well.

As far as legislation is concerned there are two major pieces I am working on - they are an electronic transactions bill and legislation looking at computer crime.

The electronic transactions bill will adjust laws to ensure commercial arrangements can be conducted in a technology neutral way - electronically or on paper.

And my supplementary order paper to Crimes Amendment Bill No (6) will address computer crimes including hacking offences.

This has been developed by the Law Commission, based on the UNCITRAL model and Australian law.

There are other issues being debated around privacy and security. There is a huge opportunity for New Zealand in this because of its time zone. We're the first in the world to turn on our computers every morning – that means we could be the site for early warning systems for viruses and other security breaches.

There, of course, many other elements to developing the knowledge economy platform, unfortunately I haven't got the time to go into all of them now.

If we are to achieve a modern, innovative, entrepreneurial economy, government and business will need to work in partnership. That's what successful economies teach us.

All of these things involve government leadership and innovation but they are not goals we can achieve on our own.

If we are to play to our strengths, and create the innovation and excitement of an open, modern, progressive economy partnership with business is the key. I look forward to working with you to make it happen.

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