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Swain Speaks To Indian Chambers Of Commerce

Minister For Communications And Information Technology
Hon Paul Swain

Address To Federation Of Indian Chambers Of Commerce And Industry (Ficci)
Mumbai
Monday 3 December 2001 – 1pm (7.30pm Nz Time)


Mr Chairman, members of FICCI, High Commissioner, distinguished guests.

I am delighted to be in India and to be making my first stop in Mumbai - a city I have long wanted to visit. I’ve been lucky enough to spend the weekend here, which has given me a great snapshot of possibly India’s most truly international city. Your hospitality to my delegation and me is greatly appreciated.

There are two reasons why I join you today: Firstly as New Zealand’s IT and Communications Minister I have made it a priority to come to India to learn what has made India the world leader it is in software engineering, and other information, communications and telecommunications skills.

Secondly, I want to give you a glimpse today of a New Zealand that is innovative and technologically savvy. New Zealand too is riding the knowledge wave and, like India, we are transforming our economy into one where knowledge and information both add and generate new value.

The government has since coming into power made significant advances in this transformation such as:
 Establishing Industry New Zealand as a government agency for business development.
 Reforming major aspects of business law – competition policy, telecommunications policy and intellectual property law.
 Introducing electronic commerce and electronic government strategies.
 Enhancing New Zealand’s venture capital market and providing support for business incubators.
 And providing a strategic focus for our tertiary education system to help meet the demands of our growing economy.

Innovative New Zealand links in India
Getting back to New Zealand as an innovative and technologically savvy country. Let’s take a look at a few places where you might be surprised to find New Zealand.

Let’s start with your wallet. Take a look at your credit card. It was probably made in New Zealand. A New Zealand company, Security Plastics has over 70% of the market share for credit cards in India.

OK, now think about the last Indian movie you saw:

Our High Commissioner tells me that when she turns on her TV she is often regaled by very familiar NZ scenery as backdrops to Indian movies and TV programmes.

As the movie making capital of India you might be interested to know that over 70 Indian film crews have been in New Zealand lately.

They are not alone: In a few weeks time, the release of one of the most anticipated western made film of recent memory will take place. The three part trilogy was directed by a New Zealander, shot in New Zealand and used state of the art IT - much of it developed in New Zealand - for its special effects. The total budget is over 400 million US$ making it the most expensive single film production ever. The film? Lord of the Rings. (Keep an eye out for it!)

Now, take a train on Western Railways and you might discover that a New Zealand company, Tait Electronics, has installed new phones in Western Railways trains to link them with a sophisticated new control centre in Mumbai.

And if you need medical treatment or a washing machine for your clothes, you might turn to one of our smartest companies, Fisher and Paykel, which recently opened an office in India and which has a strong reputation for intelligent whiteware goods and sophisticated healthcare equipment.

Across a range of fields, these examples highlight New Zealand’s smart, modern, innovative economy with a history of leading edge expertise.

The Indian IT sector is also recognising this:

 Tata Consultancy Services has an (active) office in New Zealand with more than a 100 people working on site with a major insurance company, Tower Insurance.
 Indian education provider KarROX and New Zealand’s Auckland Institute of Studies have formed a joint venture to introduce to New Zealand a range of KarROX’s high end training programmes and to develop operations through a series of franchise centres in New Zealand and elsewhere in the Asia/Pacific region.
 There are a number of other Indian IT companies with direct links - service or product based - with New Zealand. Infowavz, a Mumbai based call centre, with New Zealand equity and management participation. QED Software, with an application software development centre in Bangalore. Versaware, an electronic publishing firm in Pune, with a New Zealand CEO. Leading Indian IT companies like HCL Infosystems, Pentasoft Technologies and Kale Consultants have an active presence in the New Zealand market.

A nation of innovators

So where does New Zealand’s innovation come from?

Firstly, New Zealand is geographically isolated. New Zealanders are traders. We have to be. We earn our living by selling overseas what we produce in New Zealand. Most of our agricultural production is exported. Agriculture makes up about 16% of New Zealand’s GDP, 16% of total employment and more than 60% of exports by value. Over 90% of our dairy products, meat and wool exports go offshore.

We have to be smart to compete in the world, even in our traditional area of commodity exports. New Zealand is far away from most of its major markets and faces protectionism in markets and subsidisation of production and exports by other exporting countries.

Faced with these natural disadvantages and impediments, New Zealand turned to innovation to overcome these. It probably started with the invention of refrigerated shipping in 1882 and hasn’t stopped since.

New Zealand producers receive no subsidies whatsoever. They are exposed to foreign competition. Over 90% of New Zealand’s current applied duty rates are zero. Half of India’s exports to New Zealand, for example, attract duties of 1.1% or less.

Currently two way trade between India and New Zealand is $US150 million. Freeing up trade can only improve that situation.

New Zealand like all countries has spent considerable effort adding value to our commodity products. Greater international trade liberalization will obviously benefit our economy as well as those who trade with us.

Secondly, New Zealand is a nation of migrants. Even the indigenous people of New Zealand, the Maori, arrived only 1000 years ago. The ancestors of most New Zealanders arrived in the last 160 years. This includes a sizeable Indian community, the first of whom arrived over 100 years ago.

Thirdly we are also world-renowned travellers. Migrants and travellers bring new ideas and fresh approaches to a society. Like India, we too have a diaspora. Over 400,000 New Zealanders - that’s equivalent to 10% of our population - live in Australia. New Zealanders are found in all walks of life around the world. Not to mention India, where the CEO of Virgin Atlantic in India, the CEO of De Beers, the head of UNAIDS and the head of the International Federation of Red Cross South Asia office are all New Zealanders.

And need I say it, John Wright, one of New Zealand’s best opening batsmen, is currently coach of the India cricket team.

We are working on a diaspora project whereby New Zealanders overseas will be encouraged to keep in contact with each other and New Zealand, and to act as ambassadors for our country. India already has a very successful diaspora programme which we can learn from.

An essential factor for an innovative and productive population is education. New Zealand offers an education equal to that available anywhere. Over 35,000 foreign students are enrolled at New Zealand institutions. The number of Indian students is growing fast. This financial year we are expecting a further 1500 students to join the estimated 1000 Indian students already studying in New Zealand.

There seems to be a perception in some quarters that this is because New Zealand has at last opened its doors to Indian students. In fact, our doors have always been open, and students from Asia in particular but also from elsewhere have been enjoying the benefits for decades. We are pleased that Indian students are joining the party, and warmly welcome them.

We also welcome Indian tourists – and they seem to like us. Over 11,000 Indian holidaymakers and business people visited New Zealand in the year to September - an increase of over 47% over the previous year. Despite the recent tragic events that have affected tourism worldwide, we expect interest in New Zealand to remain fairly robust.

New Zealand too is actively recruiting skilled migrants. We see India as a place where we can find the sort of people we like and need. We are particularly interested in IT professionals. The New Zealand IT sector offers excellent opportunities for software developers and engineers. We expect a 200% increase in the number of applications for permanent residency from India this year and many will work as IT profiessionals.

Other knowledge based links with India

So where else does New Zealand innovation and versatility appear in India?

 The New Zealand engineering firm, Beca, recently won another contract to manage the construction of part of India’s quadrilateral road project. Another, Meritec, recently set up an office to offer similar consultancy services in the highways sector.
 Airways Corporation of New Zealand was involved in upgrading the air traffic control system in Kolkata.
 TVNZ International won the contract to roll out digital TV in Australia. They are now seeking to assist Indian companies to introduce digital TV services in rural India.
 Cardex New Zealand in association with Digital Alarm Technologies India is providing sophisticated security control systems to some of India’s largest corporates.
 We are seeing innovation even in traditional areas such as forestry. Timber exports are an area we see growing in future with India’s need matching our supply. To demonstrate the versatility of our product, my Trade Commissioner here, armed with a hammer and nails, recently travelled to Bhuj and in a single day he and another New Zealander from Fletcher Forests, with assistance from an Indian workforce, built a wooden kitset house shipped from New Zealand for disaster relief. The all up cost including transportation was only 50,000 rupees. We have an excellent timber resource in New Zealand which could assist India at a time when you are addressing your own timber conservation issues.
Some people might say innovation and the competitive spirit runs in our veins.

Sir Edmund Hillary - known I’m sure to all of you - is perhaps the most famous embodiment of this spirit. First - with Tenzing - to climb Mt Everest.

And many of you know the exploits of Sir Richard Hadlee.

New Zealand is also of course an international leader in yacht design and building. People come from all over Europe and the US to have their world class yachts designed and built in New Zealand. This explains partly why New Zealand still holds the Americas Cup. And these days the international television coverage you see of yacht racing frequently uses graphics technology developed by a small IT company in New Zealand with a big international reputation.

Learning from India

As I said at the outset, I have two reasons for being in India: to learn from India and to promote New Zealand as an innovative and technologically savvy economy.

India is now one of the world’s foremost producers of IT skills, and it is important to have a good relationship and to learn from such an IT powerhouse. It’s not surprising that I have a representative from Waikato University in my delegation looking for opportunities to develop links. In Delhi I will be visiting a range of private and public education institutions, including the prestigious Indian Institute of Technology.

I will be discussing digital divide issues, a divide which we in New Zealand are also conscious of trying to close. Access to information - not least through information technology - is an essential factor in building (and maintaining) an educated and productive workforce.

I will also be meeting your IT Minister, Pramod Mahajan. He visited New Zealand earlier this year and we have much to talk about. Including regulatory issues such as ensuring that a competitive environment exists in the rapidly converging industries of information technology and telecommunications.

Conclusion

Ladies and gentlemen, it is a pleasure to be in India. I look forward to seeing far greater links develop between our two countries in the coming years, based on innovation, trade and rapidly increasing people-to-people links.


Please note: India is six ½ hours behind NZ Time.


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