Posts Tagged ‘Technology’
In Playstation online shooter games, a “camper” is someone who doesn’t head out to find kills, they just wait for kills to come to them.
Among players they are widely ridiculed.
The passivity of the campers is a bit like the New Zealand economy, for example our:
- Lack of investment in international markets
- Transactional attitude to exporting
- Low levels of R&D.
Instinctively our industries and businesses like to sit and wait.
The opposite of camper countries are ones like China, Singapore and Korea. Old economies such as those in Europe have moved beyond a camper mentality because they’ve had to – they can’t afford to lie around and expect things to happen because they are no longer naturally blessed.
Non-camper countries rely heavily on human capital instead.
Not so much NZ, for the moment anyway.
We’ve basically fluked first world status thanks to enough economic opportunities (kills) randomly popping up in our sights; we haven’t gone on marches, launched invasions, set up ambushes or done anything particularly adventurous.
Our strategy is to lie in wait.
Fair dues though – when an opportunity has wandered into our line of fire, we’ve been particularly deadly.
We were gifted some of the best agricultural land around. On the back of this we developed one of the world’s most efficient farming systems.
We’re also sitting on unknown quantities of oil and precious minerals.
Our second bit of luck was being British. It’s hard to imagine any other imperial power being so benevolent to a nation on the other side of the world. And we milked that for all it was worth.
We didn’t invent frozen meat shipments, but we led the world in developing an industry around the technology.
Likewise with a bunch of dairy technologies that allowed New Zealand to become the world’s largest exporter of milk products.
And aerial top dressing was not a New Zealand first, but again we probably made more of it than any else.
The other big kill to wander into the Kiwi camper’s line of fire was war. World War I resulted in a horrendous loss of life, but the war years and the early 20s were a boom period for Kiwi farmers (till they came a cropper with huge debts).
Similarly World War II sparked a boom, as did the Korean War a decade later.
The most recent of the “strategic kills” above are aerial top dressing and the Korean War. Since then I guess tourism has wandered into our line of fire, but that’d be about it.
So camping has delivered us farming, extractive industries and tourism (which again has been clinically capitalised on). Sounds like we haven’t progressed much since the late 19th century.
As Sir Paul Callaghan says, we are poor (at least relative to countries we like to think ourselves the equal of) because we choose to be poor.
Time for a new strategy.
HT – Tom Booker aged 12
Tyler Cowan of the Marginal Revolution gloomily suggests the world has reached a “technological plateau”.
The obvious result of this is a plateauing of incomes.
At the moment it’s not clear if new technologies, capable of launching a new rise in incomes (such the bio sciences) that’d match say the impact of electricity, are really mountains or just hills.
Cowan says there’s plenty of innovation around, but most is not geared toward significantly raising the average standard of living. “It seems that we are coming up with ideas that benefit relatively small numbers of people, compared with the broad-based advances of earlier decades, when the modern world was put into place.”
As a result:
• From 1947 to 1973 inflation-adjusted median income in the US more than doubled.
• From 1973 to 2004, it rose 22 percent.
• Over the last decade, it actually declined.
In the BRIC group, and in other rapidly developing second world countries, this chronology is reversed as China and the like play catch up.
I guess Cowan is writing from a US perspective where technology plays a bigger role than elsewhere. Other factors can keep incomes rising, such as demand for low-tech commodities in first-world places like Australia and Norway.
Anyway Cowan reckons the common complaint regarding technology’s efficacy as a driver of economic growth points to a common cause. “…it would seem that a single cause is transcending national borders: the reaching of a technological plateau”.
What about the internet? Cowan doesn’t appear to have a lot of faith that a “new economic growth explosion” will come from this direction.
“…it hasn’t delivered very good macroeconomic performance over the last decade. Many of the Internet’s gains are fun — games, chat rooms, Twitter streams — rather than vast sources of revenue, and when there have been measurable monetary gains, they often have been concentrated among a small number of company founders, as with, say, Facebook.
“As for users, the Internet has benefited the well-educated and the curious to a disproportionate degree, but apparently not enough to bolster median income.”
All the same “sooner or later, new technological revolutions will occur, perhaps in the biosciences, through genome sequencing, or in energy production, through viable solar power, for example.
“But these transformations won’t come overnight, and we’ll have to make do in the meantime.”
The NZ Institute’s latest discussion paper – “A goal is not a strategy – focusing efforts to improve NZ’s prosperity” – touches on one of BigCake’s observations about how this country attacks its economic growth issues.
We’re playing “bloody tiddlywinks” while countries, even of a similar size, play big boys’ games.
Tens of millions of dollar there, millions here ain’t going to make much difference.
As the NZ Institute says if a goal is important, then resources should be poured in to match. “Competing small countries are committing hundreds of millions of dollars to efforts they regard as strategically important.”
The Herald’s Brian Fallow has commented on the sizeable discrepancy between what NZ will fork out for its national broadband network (calculated to be $5-8 billion) and Australia’s A$43 billion.
“Canberra’s estimate is the equivalent of $2400 per Australian, eight times the per capita outlay of public money our Government is talking about.”
Fallow was making the point that “this does not, as they used to say, compute.” Someone is going to lose – the taxpayer and/or the consumer.
BigCake’s point is the difference in ambition – geographical and population differences aside.
A couple of years ago I wrote about how the then Labour Government was, under the heading of economic transformation, going to spend $3.6 billion over four years on infrastructure skills and R&D.
At the same time Ireland’s National Development Plan projected expenditure of NZ$105 billion on infrastructure alone over six years.
Whether either happened is not really the point – it’s just the gap in ambition (and the money backing it) that hits you between the eyes.
You see the small thinking in the current Government’s tens of millions approach to agriculture R&D.
As usual the NZ Institute’s work is packed with good grunty stuff on what’s wrong with our economy and what we can do to fix it.
“A goal is not a strategy” is focused on boosting the non-commodity side of the economy – “exports of differentiated goods and services, and helping firms overcome the barriers to internationalisation.
“New Zealand’s exports have grown much more slowly than the OECD average partly because global trade in commodities (where New Zealand exports are concentrated) has grown more slowly than trade in differentiated goods and services.
“New Zealand’s most important sectors for exports are tourism, agriculture, and manufacturing. All three sectors have average or lower than average productivity so simply growing these activities without also substantially lifting productivity would not lift GDP per capita materially.
“Other small countries are becoming prosperous by exporting differentiated goods and services and New Zealand must find a way to join them or find another strategy for success.”
A post on the performance of our ICT sector has been banging around my head for a while. The above looks like good context for a post.
The media during the last week or so have highlighted two bits of great Kiwi technology that are definitely not ‘me too’ products that clutter the world’s market places.
High hopes abound.
o PowerTread which turns the energy of vehicles passing over judder bars into electricity. The company behind the technology, Enervate – a couple of Auckland Westies – has hooked up to some Singaporean Government cash to help get its PowerTread system from prototype to commercial release. Enervate says one PowerTread unit could generate enough energy to supply power to up to three typical New Zealand homes.
o Rex, the Robotic Exoskeleton a pair of robotic legs that enables some wheel chair users to stand up, walk, move sideways, turn around, go up and down steps as well as walk on flat hard surfaces including ramps and slopes. Rex Bionics is finishing off tests needed to put Rex on the market in Europe and Australia. It will also seek FDA approval so that Rex can be put on the market in the US.
As far as BigCake knows there is nothing exactly like either of these products on world markets.
The big question is what happens next.
These guys look to be doing the right things:
o Getting outside investment (VC firm No8 Ventures has backed Rex Bionics)
o Bringing expertise on board (Enervate hooked up with AUT University’s Business Innovation Centre)
o Getting boards of directors
o Setting up international advisory boards (BTW – Rex Bionics’ one includes Frank Gardner, the BBC’s Security Correspondent who wrote one the all-time great journalism books Blood and Sand)
BigCake’s not sure how scalable these businesses are, but NZ’s track record for turning what looks to be world-beating technology into businesses that register on a national economic scale ain’t that great.
I’ve posted before on the lack of size of our high-tech companies compared with those of other smaller nations.
There’s a disjunction between our high levels of inventiveness and entrepreneurial drive, as shown by the above two companies, and our relatively poor overall economic growth performance.
A NZ Trade and Enterprise report identified the following management traits that may explain this:
o The struggle between creating more wealth and pursuing leisure tends to be won by leisure at a lower threshold of wealth creation in New Zealand than in most other countries.
o We tend to view the world from a distinctly Kiwi perspective and easily make the mistake of thinking for our customers. That results in us being judged as being quite different to how we think about ourselves.
o We are fiercely self reliant and reluctant to rely upon others for success. As a result we feel compelled to do things that we would be better off delegating to others.
o The Tall Poppy Syndrome which causes us to under-perform, to have a profound reluctance to give and receive feedback, and a similar reluctance to use specialists, preferring instead Jacks of all trades.
o We under value and struggle to recognise the intellectual assets that we create through our inventiveness.
So, yeah, judging by what Enervate and Rex Bionics have done to date, some Kiwi companies have moved on.
As an aside. When Campbell Live did a piece on Enervate the other week it played up the Kiwi inventiveness, No8 wire, DIY, mangled prototypes, overcoming the odds angle – all set in a West Auckland backyard.
This goes down well with the way we like to see ourselves, but it’s a crap picture for any international investor.
See my posts on the ‘slow sell nation’.
Back in 1980, New Zealand and another agriculturally focused economy Denmark spent roughly equal amounts on research and development – today if we spent at the same rate as the Danes we would’ve invested around $44 billion more in science than we have.
That money would make a sh!tload of difference to our economy given the strong relationship between R&D and national prosperity.
The Government’s Chief Science Advisor Peter Gluckman went on the attack yesterday, getting stuck into Kiwi attitudes to R&D.
“We spend only 1.2% of GDP on research…[Similar] small but progressive nations spend somewhere between 2 and 3 times that amount,” he said in a speech
In 2008 our total R&D spend was miserly $2.1 billion.
Yesterday it was also revealed CRI AgResearch would be laying off around 35 scientists, engineers and technicians, many who work in the wool area after our sheep farmers decided to stop paying for wool research, a decision memorably described in a Dominion Post headline as a “raw brainless decision”.
Yeah, I’m still on the farmers’ backs.
As usual I’m also trying to be fair. Gluckman points out that some of the research the CRIs were/are doing is crap (well, actually he said “not delivering optimally”) and the sheep farmers and their precious dollars have probably been victims of that.
So there’s definitely a good money after bad argument to be made.
But talk about throwing the sheep out with the drench water.
Gluckman argues that our attitude to R&D has a lot to do with decisions like those of the sheep farmers.
“Is it that our current spending pattern was established in the post-war period of protectionism and farming for Britain at a time when commodity was king and in that time we built up an almost untouchable pattern of high social spending so that shifting expenditure towards productive areas with long delays before return, such as RS&T, is difficult especially when such strategic investment needs to be bipartisan and is hard when electoral cycles are short.
“At the heart of it I think we have a set of really deep cultural issues. We have been seduced by our national mythology – “number 8 fencing wire”, “punching above our weight”, “we think we are innovative”.
And as Gluckman says these are myths. Actually, the number 8 mentality unfortunately is not.
Has our strong egalitarianism , he asks led us as a country to avoid a focus on intellectual activity which is seen as elitist.
And why’s our private sector investment in R&D so low?
He makes some suggestions:
• Bad government example thanks to “chronically low “ and misplaced public sector investment
• The short-term focus of businesses
• Investment money heading into speculative ventures
But there is hope and it comes in the form of ‘Johnny on the spot’ Key.
Gluckman says there is now a more intense focus on the role of science in New Zealand’s development than there has been for two decades. “The Prime Minister sees science as being central to the nation’s advancement…”
This will lead to the “most substantive changes that the science system has seen in more than 20 years”.
Like the sheep farmers and the AgResearch scientists they sent down the road, BigCake can’t wait.
“[In NZ] a decided lack of skill in negotiating waterproof deals with multinationals has led to a plethora of cases where the multinational has been able to benefit while the local has suffered.
“Rather than dwell on the litany of multinational ethical transgressions and technological dead-end ‘solutions’ that have come to light, let’s next turn to what is underpinning this systemic failure to be more successful in using IT to capture material productivity improvements.”
In today’s NZ Herald, Gareth Morgan asks: “Is New Zealand’s economic development and productivity being helped or hindered by the role of multinationals in our economy?”
I’m guessing he thinks it’s the latter.
The false dawn of the Knowledge Wave movement got a few mentions in the comments on Xero CEO and IT gadget junkie Rod Drury’s guest blog on Kiwiblog about the new digital divide between New Zealand and the world exposed by our lack of Visual Voice Mail, Kindle and iPad.
The blog also produced a divide among commenters.
Some felt Drury was getting carried away over something that doesn’t matter:
• “…just keep crying into your cappuccino about not having the latest iCrap”
• “Excuse me while I weep into my non-SIM-locked iPhone.”
• “Gadgets, all about gadgets. I don’t WANT my kids being obsessed with electronic gadgets, I want them to have a life !”
Or he should get real:
• “New Zealand is a lifestyle block at the end of a country road, and so naturally enough things take a little longer to get here.”
• “If you are an Asia-Pacific Apple manager, where are you going to prioritise your efforts – Aussie or NZ? Japan or NZ? S. Korea or NZ? Indonesia or NZ? China or NZ? We have a tiny, low-income population. Is it really a mystery?”
• “NZ has half the real GDP of Americans. There are just 4 million people to spread the fixed costs of introducing anything here.”
And some, like Drury, were worried:
• “It is shocking to me how far we are behind the rest of the world. I moved back to New Zealand a year ago, and everyday I’m surprised at what isn’t available here that was in the US and Japan.”
• “I am much less productive working in NZ…there’s all the people who are still on dial up – I guess somewhere in Hillbilly country in rural West Virginia a farmer may still be on dial up otherwise its as ancient here as the cassette tape…”
BigCake will pitch in with the worried camp, though he has a feeling that New Zealand probably always has been near the end of the queue among first world nations for new technology.
This queue has got longer of late with the addition of countries which have leaped New Zealand in the wealth stakes.
When the latest technology arrived on the scene in the 1970s we’d be able to pitch ourselves as one of the world’s wealthiest nations, now we’re ummm 30 something.
Over on Kiwiblog, Xero CEO and IT gadget junkie Rod Drury has a list of IT essentials we are missing out on compared to Australia and even Fiji, including:
• Visual Voice Mail: VVM “was released with the iPhone several years ago and is also available on the BlackBerry. It’s to voicemail what the CD is to the 30-year-old cassette tape – VVM allows you to see all your messages and dive into the one you need.”
• The Amazon Kindle eBook reader: “It’s been available in the US for years and last year a global version was introduced that’s now available in Australia and Fiji…
• iPad: “It’s out in the US this week and Australia later in the month – there is no time set for the iPad in New Zealand.”
Drury says “[New Zealand] used to be a first world technology country. Things happened and were available in New Zealand first; we Kiwis were always keen to try the new gadgets.
“But over the last couple of years this has changed. Being third-class technology citizens, not only has an impact on productivity, but an impact on attitudes and innovation. Our daily technology world is less sophisticated than our digital counterparts in the US and now even Australia. The gap widens.
“We need to make sure there is a plan to get us back to where we should be as soon as possible. I don’t want my children to be left behind. I don’t want to be left behind.”
Anyone got any theories about why this is so?