Good afternoon.  I appreciate being asked to speak at the fourth annual Canterbury Software Summit. 

I would like to acknowledge the guest speakers for the day: Craig Richardson of Jade Software; Donald Hastie or ERMLive; Ian McCrae of Orion Health; Steve Simms of TOMIZONE and Chris Mardon of Energy Mad.  I would also like to acknowledge the summit's host, Canterbury Software Incorporated.

I was here in Christchurch in April with the Prime Minister for the opening of NZi3.  We were both very impressed with the way NZi3 is working as a "hothouse" of information and communications technology (ICT) research, bringing together researchers and business in this area. 

The objective of this year's summit is to inspire Canterbury's ICT companies to take the next step in the development of their business by focusing on success stories of business growth.  The theme of "Starting up, Growing up, Selling up, and Starting Over" fits well with our economy emerging from the recession.

I have two main themes today. The first is how innovation fits into the Government's broader economic agenda. The second is what we are doing to encourage innovation. The ICT sector should be able to take particular advantage of the commitments the Government is making.

The Prime Minister's speech on the Government's economic agenda, given in July, set out six policy drivers that are fundamental in relation to boosting New Zealand's economic performance.  One of these drivers is innovation.

Innovation can be found throughout our economy including, of course, the primary sector, which dominates our exports. 

Commentators often say that research priorities for New Zealand are a choice between the land-based economy and what are often called "hi-tech" industries.  In reality both of these broad areas are "hi tech".  Both are crucial to New Zealand.  Both have demonstrated excellent growth prospects and productivity improvements.

The New Zealand economy continues to diversify into new services and specialised manufacturing, where we can be internationally competitive.

Software development is one such area. Software is the essential interface between people and machines. In the wired 21^st century world, it is increasing the interface between people and people as well. Software development has become a key driver in lifting productivity, in the same way electricity was in the early 20^th century. It is a highly mobile product, in most cases available via information technology networks.

The OECD described New Zealand's software industry as a "pocket of excellence".  Given our strengths in ICT and digital technologies, these industries are valuable contributors to the diversification of our economy, and subsequent economic growth.

The Government's investment in innovation will help firms connect with overseas markets and develop new ideas to create new and higher value products and services.

It is our intent to invest in firms which have the best export opportunities and operate internationally.  The Government is also working to ensure our various support schemes deliver clarity as to where funding should be sought, and what the requirements of that support will be. 

There will be room for the "start-up".  But the serious support will go into those that have the most effective path to significant gains.

The Foundation for Research Science and Technology currently invests approximately $13.5 million per annum in ICT research.  The purpose of this ICT investment is to assist business and society to take advantage of and make best use of the infrastructure and technologies. Because ICT is a fast-changing industry, we need to have simple and swift support processes.

Today's consumers want to stay up-to-date and connected worldwide. This has led to today's smartphones. Little over a decade ago our mobile phones were "bricks", only able to make limited and expensive phone calls. A generation later the mobile phone is both ubiquitous and essential.

This month New Scientist is highlighting the change that the smartphone has brought to social, business and economic connectivity and value. The conclusion of this article is that smart phones are actually altering the way we think.

Ultimately, smartphones facilitate our digital lives. This is not because of the hardware. It is the ability of the software to exploit the functions of these devices that is driving progress.

Smartphones are one highly visible platform for software right now. In reality, innovative software is enabling and changing just about every other aspect of our lives as well.

New Zealand has some great examples of these "underpinning" products.

Optima's ambulance service product, named SIREN, optimises ambulance response and coverage. SIREN is now in use in New Zealand, Australia, Europe and North America. This is changing the ambulance industry, making the distribution of resources more effective and efficient.

In other fields, New Zealand's software developers put their expertise under the spotlight.

New Zealand is leading the use of digital technology in movies. Weta Digital needs little description, but they are world renowned for their advances in digital film. Weta's work on Avatar and Tintin may usher in a new era in 3D and motion capture technology.

The ability to do this work is underpinned by software and programming. Last month, the Government supported a broadening of Weta's capabilities with a $5.8 million TechNZ grant. This funding is matched two for one by Weta. The purpose is to allow deeper research and development that looks beyond the commercial horizon of the next few films and allows Weta to stay at the forefront five and 10 years out.

Here in Christchurch, Tait Electronics is a well-known company.  They have had to shift their platform from analogue to digital - a step change in technology. 

The result is an increase in sales from less than $10 million to over $43 million in one year.  It has expanded their markets in the export security sector.  It has also kept research and production jobs in Christchurch.

These are three different examples of investment in technology. A common ground is that software development underpins the ability of these companies to innovate and succeed. The Government recognises that encouraging a vibrant ICT sector has benefits across the broader economy.

Government support for ICT also extends to infrastructure. We have recently made two important commitments to improving ICT linkages.

The first is the $1.5 billion broadband investment announced as part of the Budget earlier this year. To drive growth and innovation in the coming decades we need to create world-class ICT infrastructure.

This Government has committed to rolling out ultra-fast broadband to 75 percent of the population where they live, work and study over the next 10 years.

The Government also invested $16 million in REANNZ in the Budget. Long-term, REANNZ have to make sure that the Kiwi Advanced Research and Education Network (KAREN) is self-funding. REANNZ are due to report to Ministers on how this can be accomplished by the end of this year.

For innovation to succeed, we also need to make sure that business innovation is supported.

The Government has already made changes to the tax system, and is reviewing business assistance programmes to focus on better economic performance.

As a sector, you will be aware of the many opportunities for new products, services and markets.  There are two areas where Government commitments could create major opportunities for further software development.

One of these potential opportunities is the Square Kilometre Array.  Australia and New Zealand have a combined bid to host the SKA. If we are successful, the SKA will generate significant economic benefits and spinoffs in a number of areas. These include supercomputing, fibre optics, data transmission, renewable energy, construction and manufacturing.

The SKA would provide a conduit for NZ institutions and businesses to be involved in the development of significant technology and infrastructure over its expected 50-year life span. These opportunities have already attracted the attention of major technology multinationals and local SMEs. 

The SKA project is also a catalyst for fostering further strong links and cooperation between Australian and New Zealand industry, particularly in the high-technology sectors.

Another opportunity is around the Kiwi Advanced Research Education Network, KAREN. 

KAREN is primarily a research and education network. It is also New Zealand's entry ticket to participation in international research and access to data intensive global content. 

This week, the National Institute for Water and Atmospheric Research (NIWA) announced it has installed the southern hemisphere's most powerful supercomputer for climate change modelling. KAREN makes it possible to exchange this data with other global leaders in climate research.

Having KAREN gives us greater inclusion and collaboration in global research, education and innovation. In turn, this has potential spinoffs by bringing in new ideas and applying them to New Zealand's challenges. KAREN also gives us access to new markets for our own ideas. 

Last month I set out my key themes for the Research, Science and Technology portfolio. In summary, these are:

• better migration of science from lab to market


• more strategic investment in enabling science


• more effective support for commercialisation


• simplifying the system.

Progress is already being made in each of these areas. Both generators and users of science are giving plenty of feedback on how we can speed the process.

We are doing this because improving productivity is the main goal of this Government. We are committed to an agenda which uses innovation to drive economic growth. The software and ICT sector will benefit from the changes we are making. This benefit will flow back through the economy through more jobs, new ideas and export growth.

Long-term economic resilience comes down to investment in people and innovation. The Chief Science Advisor to the Prime Minister, Sir Peter Gluckman, said in Sydney last month that "a scientifically literate and engaged society at all levels is more likely to be ambitious, innovative and productive."

The software and ICT industry is at the forefront of demonstrating just how ambitious, innovative and productive our economy can be. Your success is vital to New Zealand's future.  Thank you for this opportunity to address today's summit.