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Strengthening Interregional Economic Links

Sunday, 18 March 2001 Hon Paul Swain Speech Notes
Strengthening Interregional Economic Links: The Role of Information

Good morning. May I begin by thanking the organisers for the invitation to participate in this forum and for the excellent presentation setting the scene for the discussion in this session.

Only when one travels the distances of the Pacific, and it is a very long way even from NZ, that one comes to appreciate the scope of the Asia Pacific region and its community of interest. Which leads me to my brief remarks today as a panelist on the role of information in strengthening inter-regional economic links.

Global Changes

In recent years we have witnessed a global information and communication, technological revolution which is only now being fully appreciated.

The Internet is becoming one of the most powerful forces of globalisation. It is forcing a pace of change across the region that we have not witnessed before. It is not only impacting on the way we conduct business and trade, but on the ability of all our citizens to access information and turn that information into knowledge to improve their economic and social well being.

Governments are now realising that they are not the central force in this information technology revolution. It is being driven by our businesses, the ICT industry, our universities and other centres of learning, our citizens and in particular our children. New international communities of interests that transcend traditional ¡§national¡¨ borders are today not only possible but flourishing.

Today, businesses are doing business together and with consumers on the other side of the world as easily as if they were next door to each other.

Our children¡¦s daily ¡§playmates¡¨ can be three thousand miles away. Our government officials are in daily touch with peers off shore. Our students draw on world wide research resources. As citizens we have been empowered by the Internet and new sources of information in the pursuit of our own interests.

Before coming here I saw in my local media that some farmers in NZ are seeking direct advice from farmers in the US in a chat room on proposals for reform of the dairy industry in NZ. No longer are they solely reliant on their NZ peers or domestic pressure group interests for information.

The Internet, information, knowledge, new networks of interest are powerful forces of innovation ¡V it is encouraging new ways viewing a problem, new ways of doing things supported by new partnerships of interest.

Access to information and the ability to turn it to advantage under new business models offers huge opportunities for businesses. At the same time the ICT revolution poses some enormous potential risks to those businesses who fail to recognise the power of new drivers in an electronic environment.

Smallness and distance no longer a tyranny

In the past, size and distance from markets created problems for a trading nation like New Zealand dependent on commodity exports. The invention of refrigerated ships that could carry our meat to the world was a huge breakthrough in our country's development. Today the Internet is the modern equivalent of those refrigerated ships. New Zealand is using the new (ICTs) "Information and Communications Technologies" to transform our economy into one where knowledge and information play an integral part in driving our economic performance.

Distance obviously remains a bit of a disadvantage for the transport of goods. But the competitive use of strategic information, combined with new ways to meet consumer needs under new business partnership arrangements, made possible by the Internet and e-commerce can in large measure mitigate this disadvantage.

Smallness is no longer a tyranny. NZ is a nation of small businesses as are most of the countries represented at this forum. The information, communication and technology revolution is empowering our small businesses. The possibilities for research, identifying market trends, cultivating new customers, new business collaborations both within and across borders have been expanded exponentially by the Internet. The flexibility and nimbleness that small businesses can employ to meet fast changing consumer needs are a powerful source of competitive advantage today.

Most importantly, however, the Internet and the effective application of e-commerce have allowed small businesses not only to exploit the potential of niche markets but to do what previously only large multinationals could achieve using expensive and sophisticated electronic data interchange (EDI) networks.

By way of example Sparesfinders is a New Zealand company which is entirely web-based. It provides a matching service for spare parts for large engineering and manufacturing firms. Today Sparesfinder has partners in a number of places including China, US, Australia, Europe, Middle East, Pakistan, South Africa, and South America out of Buenos Aires. The service lists spare parts from companies all around the world with a total value of more than US $1 billion. It is a global business started and run by a young man in the suburb of Takapuna in Auckland who has no corporate presence apart from his website.

In short the Internet is an amplifier ¡V it is amplifying the reach of small players and people who are limited in resources and isolated geographically across this region.

Role of Government

Against this background some would argue that the best thing that governments can do is get out of the way. But this would be to abrogate our responsibility to understand how the information technology revolution is challenging public policy responses. The challenge today has shifted from how we protect and grow our national markets behind our borders to ensuring that our businesses and people are equipped to participate in an increasingly integrated global economy and competitive global economic activity. Today our national well being is not necessarily determined by what we own but about the value added through collaborative economic activity by our businesses and citizens in a global market place.

What then is the role of government in this rapidly changing business and social environment?

NZ¡¦s Electronic Commerce Strategy
Late last year I launched the NZ government¡¦s E-Commerce Strategy with the Vision that New Zealand will be world class in embracing e-commerce for competitive advantage. The underlying driver for the strategy was the recognition that ICT and e-commerce capability are today core capabilities ¡V not luxury ad ons ¡V required to empower our citizens and businesses on and off shore to participate in the global economy.

The framework of New Zealand¡¦s approach will be common to most national strategies in identifying three key areas of responsibilities for government:
„h The first is Leadership.
Leadership in partnership with the private sector in communicating the importance of the changes that are taking place and the opportunities and the risks they entail.

Leadership, by example, through government re-engineering itself in light of the new opportunities and efficiencies enabled by the ICT revolution. Government must lead in the delivery of better and faster services through Electronic Government, so that citizens can have access to government information and services in a more cost effective and accessible way. One of our aims is to reduce the cost of doing business with government.

Leadership in assisting businesses build new networks both within and across borders.

Leadership in the development of secure means for exchanging information on public networks.

„h The second responsibility is to ensuring an enabling regulatory environment that:
(a)supports the development of cost-effective innovative telecommunication services for all users;

(b) ensures an open and competitive economic environment that supports e-commerce;

(c) ensuring an equivalent legal framework for electronic transactions and paper-based transactions;

(d) develops consumer confidence by addressing security, privacy and consumer protection concerns;

(e) encourages continued innovation through appropriate intellectual property laws and their enforcement; and

(f) supports the development of enabling international norms and principles that will maximise cost effective opportunities for business to exploit new opportunities globally through the net and e-commerce.

„h The third broad area of responsibility is to ensure the supply of skilled resources through:
(a) supporting the development of life long learning skills across our communities;

(b) building business skills in ICT and e-commerce;

(c) ensuring that or immigration policies reflect the challenges of the highly international market for skilled resources;

(d) assisting our business communities to build regional and international networks.

(e) Introducing measures to close the digital divide.

Governments are elected to govern. That means we must be prepared to provide leadership, an enabling regulatory environment, and help build individual and business skills and capability so that all citizens get the benefit of the new ICT revolution.

In addressing these broad areas of responsibility individually and in our collective efforts, in partnership with our private sectors, I believe we will unlock the potential power of information in advancing our economic and social well being in the region. I want to thank you again for the opportunity to take part in this forum and for the valuable opportunity it provides to discuss the issues I have touched on today.


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