E-COMMERCE SUMMIT 1/2

E-commerce Strategy

Novtember 2000

"New Zealand will be world class in embracing
electronic commerce for competitive advantage."

The phrase competitive advantage is key. Electronic commerce is driven by
technology, but it is not about technology.

E-commerce is about business, the whole business - and indeed the whole
economy. It is important for you as individuals, as business representatives and
as members of families and communities. It is important to New Zealand as a
country. It presents enormous opportunities. It also presents potentially large
risks to the competitive advantages you may have today.

We have just heard from John Sifonis and Don Tapscott. They told us that a
small technology savvy country like New Zealand is more than capable of
succeeding in the new environment. Indeed in the fast paced world of e-commerce,
our small size and our flexibility can be turned to great advantage.

Don Tapscott has noted that "The question facing leaders and managers is not
just - what is driving change in the economy today? But also and more
importantly - what should I do to respond to all these changes?"

E-commerce: Building the strategy for New Zealand represents the Government's
response - it is a statement of the government's commitment to leadership.

A lot has been said in the last year or so about the knowledge economy, or
the new economy. The government is committed to building a knowledge-based
economy in New Zealand. We want more software developers, web site designers,
scientists and engineers. A lot more.

But it is not a matter of choosing one type of industry over another. The
knowledge economy is about enhancing the performance of the whole economy.

The more New Zealanders and New Zealand businesses who are connected into
global networks, the greater the potential value. So whether you are a Southland
farmer or a Takapuna software developer, the e-commerce strategy is about all of
us.

As I have met and talked with people over the last six months, what never
fails to amaze me is the ability of New Zealanders to do great things. Even more
amazing is that we don't like to talk about it.

The Australian's of course have been crowing about how their businesses are
all wired up for e-commerce. Yet a recent survey of 506 businesses by BRC
marketing and Social Research last month shows that we New Zealanders are
beating the Aussies all ends up.

More of our businesses have computers, more are connected, more are using
e-commerce and we have cheaper broadband access. The statistical report you have
in your satchels gives you the figures.

The reality is that New Zealand has a great foundation for e-commerce. And
with the Southern Cross cable coming on stream in the near future, we also have
a big fat pipe to the rest of the world.

But it is only a foundation, and we have not yet got laurels on which to
rest.

Let me now take you briefly through the chief parts of the Strategy. I want
to emphasise at the outset that this not a strategy engraved in stone - it is a
living document, which will be informed by ongoing feedback.

Vision, goals and principles
The Vision
represents an outcome, and a commitment to achieving that outcome. In the coming
year I will be championing the vision across the country.

Supporting the vision are a number of goals. These are the areas we need to
concentrate on to achieve the vision. They include the goal of capitalising
fully on our competitive advantages in a networked world, and providing a
supportive environment for enterprise and innovation.

Strengths and weaknesses - it is important that any strategy be based on an
analysis of our strengths and weaknesses. We need to be clear about the new
opportunities. We also need to understand the risks if we do not respond. I have
already talked about our strengths. We have a good foundation.

Our key weakness is the lack of in-depth use of e-commerce. While we are
users, we are not sophisticated users. Not enough of us understand what a big
deal this is. Many traditional advisers lack this expertise. This weakness is
something that both government and business have to address.

Principles - it is important that when addressing e-commerce issues that
government be guided by clear principles. Key among these are:

• leadership is a shared responsibility between government, business, and the
  broader community;
• human capability is the key area for investment; and
• government is committed to an open competitive environment in which
  e-commerce can flourish. It is up to business to make the choices about
  technology.

The strategy's vision, principles and goals describe a framework and the
direction we should take. However, from the beginning I wanted the strategy to
contain some firm commitments to those actions seen as essential, in order to
achieve the vision.

The way forward

These commitments are listed in the section called "The Way Forward". They
fall into three broad areas:

First - the government is committed to providing leadership, by walking the
talk in its own activities, by communicating the significance of e-commerce to
the wider public, and in carrying out appropriate research.

Second - the government recognises it has a key role in building the
e-commerce capability of business, individuals and communities.

Thirdly - the government is committed to building an enabling regulatory
environment. Among other things this means ensuring the law is up to date,
ensuring there is adequate infrastructure, and promoting New Zealand's interests
internationally.

In each of these areas there are quite a few specific commitments. I will
highlight just a few of these now.

Leadership
A key role of government has
always been to provide information. This is particularly important in a time of
great change. Business and individuals cannot take advantage of the
opportunities or guard against the risks if they don't know about them. We want
businesses making well researched informed choices.

To this end the government, in partnership with the private sector, will
champion e-commerce across the community.

This summit and strategy are the first steps. In the New Year the key
messages from the e-commerce summit will be taken to the regions through a
series of workshops. As well we will redevelop the government's e-commerce web
site to provide better information, and we have already published E-commerce : A
guide for Business, which you have a copy of in your satchels.

Excellent research is crucial, and has been lacking so far. To fill this gap
the government will identify a research programme to better measure the uptake
of e-commerce, improve our understanding of what hinders business uptake, and
benchmark New Zealand against the rest of the world.

E-Government
E-commerce cuts across the
whole of the economy, and the whole of government. Some of the significance of
the strategy is that it is a commitment by government to consider the e-commerce
angle across the whole range of its other activities. In terms of social policy,
this includes work on digital divide issues. At a third of GDP, government
activity is a huge part of the economy. It is therefore essential that
government walk the talk. Government will lead by example through e-government,
e-procurement being a priority. In this context the government is committed to
using online technologies to deliver better quality, cheaper and faster services
to its citizens, as well as providing opportunities for New Zealand businesses.

The State Services Commission has already been funded to develop a strategy
for e-government. The e-government unit has been up and running since July.
Already it has identified a range of projects and set targets for rollout. These
are highlighted in the strategy document.

Building Capability
Human and business
capability are crucial areas for investment. Lifelong education is the key to
wealth creation and improved economic and social performance. Building business
skills in e-commerce and other technologies in small and medium businesses is an
immediate priority.

The private sector and tertiary education have vital roles to play alongside
government in developing these skills.

Government already makes a significant commitment to building business
capability through a range of organisations, including Trade New Zealand,
Industry New Zealand, and the BIZ programme. The thrust of the strategy is to
ensure these organisations extend their programmes to include delivery of
e-commerce focused training.

The government is committed to ensuring a continued supply of skilled people.
But it recognises that New Zealand now operates in a highly competitive
international market for skills. In response the government will develop a
coordinated international marketing approach to attract people with e-commerce
and related information skills to New Zealand.

Digital literacy will be crucial in the 21st century. This is the ability to
use information and communication technologies (or ICTs) to best advantage. The
government will work to ensure that all New Zealanders have access to
opportunities to develop these skills, both through formal education and at the
community level.

The strategy identifies a range of areas where the government is committed to
taking action. These include:

• ensuring that all teachers are equipped with the skills to use ICT in the
  learning situation;
• promoting the use of ICTs across the curriculum;
• working with the telecommunications industry to ensure that every school has
  adequate Internet access; and
• exploring innovative ways to facilitate the provision by the private sector
  of better access to electronic communications services in rural communities.

Regulatory Environment
The regulatory
environment must support the growth of e-commerce. It is more than the legal
framework, and includes trade policy, tax policy, industry specific regulation
and consumer policy. In many respects this is the hidden work of government -
unglamorous but crucial.

Ensuring that the regulatory environment keeps pace with technology is a
complex job. Initiatives include the Telecommunications Inquiry and the
development of an e-commerce code for consumer protection in partnership with
the private sector.

A significant initiative is the Electronic Transactions Bill. Yesterday the
Bill was introduced into Parliament. This is the culmination of work begun by
the Law Commission three years ago. In the last six months it has required that
every piece of legislation on the statute books be reviewed. If you are a lawyer
you will appreciate just what a task that is.

Passing of the Electronic Transactions Bill will create certainty about the
status of electronic transactions. That is critical for the development of
e-commerce in New Zealand.

Partnership
Partnership is a
cornerstone of the strategy.

Partnership is about drawing on the ideas and capabilities of society as a
whole. In the new economy, partnership is about drawing on the power of the
network to deliver fast and flexible solutions.

The government recognises that we are in a fast changing environment, and
that the best strategy is one based on collaboration and feedback. That is why
the strategy document is called "Building a Strategy for New Zealand" We are
genuine when say we are building a strategy. That's why government, Ministers
and the summit sponsors have put so much effort into both the summit and the
strategy, and are spending this afternoon in seeking your comments and feedback.

Electronic Commerce Action Team
But the
partnership doesn't end here tomorrow.

After the summit the government will establish an E-Commerce Action Team to
support implementation of the strategy. I want this to be a business-focussed
group.

The Action Team will have a key role in identifying targets for e-commerce
uptake, and monitoring and measuring their achievement. It will coordinate
efforts to facilitate uptake of e-commerce, identify a core research programme,
coordinate feedback and provide advice to government.

Summary
The strategy is about
government being committed to doing its part, in terms of leadership, building
capability, and an enabling regulatory environment. It is committed to doing
this in partnership with the private sector and the broader community.

But achieving the vision, that New Zealand will be world class in the use of
e-commerce for competitive advantage, is not the responsibility of government
alone. It is the responsibility of us all.

Business especially has the most important role to play. Many businesses are
already displaying a high degree of innovation, enterprise and attitude. But we
need a lot more.

Innovation is doing things in a new way - being creative and applying new
technology. Enterprise is about taking risks and looking for new opportunities.
And attitude is having a global outlook, taking the world on, and believing in
ourselves as New Zealanders and our ability to succeed.

So, with attitude in mind, I invite you in the next session to tell us what
you think.

Is this the right vision? Have we properly identified roles of government?
Have we got the commitments right? What's missing?

And most importantly, what is your role in all of this? What are you going to
do in this summit, and in the coming months, to make this vision a reality for
all New Zealanders?

We invite and value your feedback and participation. Thank-you.