Speech to the TUANZ Rural Connectivity Symposium 2018

I’m here today to engage and explore ideas about how we can work together towards a digitally connected, technology-enabled future for every Kiwi.

This government really is trying to do things differently – we are really trying to seek the views of people out there and try to find different ways to have meaningful discussions.

Today I’m talking about a digitally-connected, technology-enabled future for every Kiwi. A future where all New Zealanders have access to technology, regardless of income or geography and the skills to take the opportunities it presents. That means grappling with some quite tough issues.

As a government we want to be able to measure how our policies and investments are making real improvements in people’s lives which means we’ve got to measure what the digital divides are.

My two big initial goals – to close the digital divides by 2020 and to make ICT the second largest contributor to GDP by 2025.

We also have to measure success differently as a government. We believe New Zealand’s economy shouldn’t be judged on GDP alone. The measure must include social success and placing people’s well-being at the heart of what we do. That’s not just a fluffy concept – it’s a concept that every government agency is grappling with at the moment.

New Zealand’s recent strong economic growth is the result of years and years of hard graft by businesses and their workers. The problem is, strong growth hasn’t translated into the improved living standards and wellbeing we want across the community.

There’s been more demand for food parcels, record numbers of homeless and far, far too many of our young people aren’t working, learning or in training. Those aren’t the signs of a successful economy.

We believe we must transition to a more productive, sustainable and inclusive economy where we improve the living standards and wellbeing of all Kiwis.

I want to touch on productivity for a moment - New Zealand is good at creating more GDP growth. Over the last 20 years we’ve averaged something like 2.8 per cent whereas the OECD average has been 2.1 per cent.

We’re good at working, good at working long hours. We’re not so good at getting the growth out of each unit of labour which is the added value.

That’s why your hear the phrase moving from volume to value so much coming from this government… because it’s so important that we’re moving to a much more value-added economy.

How we up our productivity is a critical part of how we’re going to succeed as a nation.

Rural Broadband Initiative

There is enormous untapped potential in our rural communities and the Government has unashamedly ambitious programmes, building on what has been done before, to help those communities compete equally in our 21st century economy.

Improving rural connectivity empowers people to increase their productivity and benefit from a digital economy, especially with modern farm management.

Through enhanced connectivity we can have precision agriculture and more sustainable farming. With technology, farmers can monitor effluent and water tanks and water levels in rivers and ponds.

With better connectivity maybe we would have had more farmers entering their stock movement details in to the NAIT system. Lack of connectivity meant that that system wasn’t being properly used. While it didn’t create our Mycoplasma Bovis issue it is possible lack of use of the system contributed to its spread.

Under phase two of the Rural Broadband Initiative over 70,000 rural properties and businesses will have access to new or improved broadband, giving them more connectivity.

RBI2 was initially scheduled for completion by the end of 2022 but I’ve recently announced an accelerated timetable that will see this part of the build finished in 2021 - one year ahead of schedule. I’d like it to be earlier than that – wouldn’t it be great if we could get it done by 2020.

MBIE also has a work stream dedicated to enhancing rural connectivity and we’re expanding RBI2 even more. That means rural New Zealand will have access to broadband even sooner.

Just how far and how fast will depend on finding land to build on and on resolving geotechnical challenges. But it is the right, much-needed step forward to lift our regions - and rural businesses.

When the expansion is complete, broadband will cover 99% of the population. And I don’t plan to stop there. I’d love to be able to tell you more about the expansion plans but it’s commercially sensitive, it’s in process.

Shane Jones and I will make an announcement soon. It’ll be deadly serious and comprehensive.

Working together

We’re all aware of the difficulties of bringing infrastructure to more remote communities. But it is possible to work together with communities and find solutions that make a big difference to the lives of hardworking rural New Zealanders.

Look at Haast. It was the largest mobile blackspot in the country in one of our most remote areas. The area is a tourist magnet but the 244 kilometres from Lake Hawea to Fox Glacier had no cell cover and no way to call for help for victims of road crashes.

I visited Haast in March and by the beginning of May we had a tower built and operating. That’s the power of Government and the local community working together. An average 460 calls a day now go through that tower; it handles around 310 txts each day; and the average data volume that goes through the Haast tower daily is 11.2 Gb.

Haast is a great example of a community that came to us with part of the solution – the land for the tower. It’s why I urge rural communities to bring their ideas and resources and work together with us to solve connectivity issues faster.

A new 25 metre mast is also nearly complete at Lake Wahapo in the Westland National Park. The new tower will be operational within a few weeks providing coverage for the tourist and fishing hotspot and 4.5 kilometres of state highway.

Wireless Internet Service Providers also have a role here using tailored, innovative and small-scale solutions to reach remote and rural areas. I thank them for the work they’re already doing - the energy and the good ideas they’re putting in to this - to help people increase their productivity and benefit from the digital economy.

A big test – the RWC

WISPs and Retail Service Providers (RSPs) also have a role in a big test that’s coming next year - the Rugby World Cup 2019. Spark and TVNZ won the broadcast rights for RWC. Their plan is for people to watch streamed matches on their smart TVs, tablets, laptops and phones.

I imagine most people in this room have been watching what’s happening in Australia in the last week or so with Optus streaming the football World cup. It could be described as a meltdown that’s now seen Optus Australia give all group games to SBS – the Australian free-to-air channel.

Lagging and freezing video, frequent drop outs and picture quality problems outraged sports fans and prompted Australian PM Malcolm Turnbull to speak to the Optus CEO.

I know how important rugby is to New Zealanders and I want as many as possible to be able to see next year’s RWC games live. That’s why I’m watching really closely, along with the Minister of Sport, what Spark is doing to head off any similar issues here ahead of RWC kick-off.

I’m really encouraged that Spark has set up an industry working group – made up of technical and operational experts – who will work closely together to ensure they give New Zealanders a good Rugby World Cup experience. I understand part of the group’s work is to resolve potential problems.

I also wrote to Spark earlier this month asking them to keep me informed about its plans to ensure rural New Zealand doesn’t miss out on the opportunity to see the entire tournament.

Chief Technology Officer

Our technology future is complex and it’s why I’m appointing a Chief Technology Officer.

That’s appointment’s getting closer – hopefully next month – and once in place they’ll provide independent and expert advice from a whole of society perspective, not just a government or technologist perspective.

At a high level, the CTO will play a lead role in developing a digital strategy for New Zealand and will have a broad mandate to serve as a challenge to, and advisor for, the New Zealand Government. 

Digital Economy and Digital Inclusion Group

Our Digital Economy and Digital Inclusion Ministerial Advisory Group (DEDI) will provide support and advice to the CTO.

DEDI’s working on advice for the Government on how we can build the digital economy and reduce the digital divides. One of its first tasks is to help create a blueprint for digital inclusion which will help us define where we are heading and how we might get there.

DEDI members have formed 5 ‘break-out’ groups looking at digital inclusion; maximizing potential; building capability; digital connectivity and adapting to disruption. There’s an overlap between the sub-groups so they’re working closely together to avoid duplication.

I’ve asked them to clearly define what constitutes the ‘digital economy’, what drives it and what are the things the government can or should influence.

There’s a stream of work that MBIE and Stats are also working on in this area.

I’ve also asked the sub-groups to look at how we can get everyone working more effectively together to ensure new thinking happens.

In addition I have several pieces of work underway to enable and encourage uptake and include more people and businesses in our digital economy. That is the really important next step – it’s what happens with that connectivity that really matters.

The Tech industry employs around 100,000 people in 28,000 companies – that’s around 5 per cent of the workforce. The Digital Nation New Zealand report released by NZTech estimates that for every dollar invested in growing tech sector productivity there is a $3 return on investment. I’ve also read a figure recently of $5 ROI.

Companies that make smart use of internet services are 6 per cent more effective that average firms in their sector. The report says that while Auckland, Wellington and Christchurch all have large tech sectors, regional New Zealand is also benefitting from the growth of the tech sector.

If I look at my own city - Dunedin – where there’s a strong gaming sector. I want to look at how government can add more value in to that sector. I’ve recently announced the first ever report into the gaming sector in New Zealand and how we can extract more value from that.

Rural areas drive our largest industry – primary production. Connectivity can provide opportunities for people to enjoy country lifestyles but work in city jobs. Adopting technology is essential for both the survival and economic growth of rural New Zealand.

Because technology is a proven link to increased productivity, the Government is trialling new ways to help small and medium-sized businesses in particular to understand the value of digital tools so they’ll use them more.

It’s estimated 28% of New Zealand’s GDP is produced by businesses with fewer than 20 staff so MBIE has kicked off pilot programmes for SMEs focussed on tourism, construction and arable farming.

MBIE’s developing package of digital tools for firms to test at local and industry events.

Conclusion 

We all need to be innovative and make our services more effective, more inclusive and accessible in a digital-rich world.

We need the right frameworks in place so communities and industries – both rural and urban - can enjoy the benefits of a digital world.

We need your ideas to grow the digital economy and to work with us so all New Zealanders, even those who live in our most remote areas, can embrace digital opportunities.

Every New Zealander needs to be on the journey with us; know how to access and use digital technology; and trust the systems we have to manage and protect our information.

It’s about all of us, not just some of us.