Speech to Xero Annual Partner Conference, 4 February 2011

Introduction

I am very pleased to talk to you today about technology.  As you might know, I’m very passionate about it.

The new technology out there right now is astounding.  As Arthur C Clarke said, “any sufficiently advanced technology is indistinguishable from magic.”

But are we using it to our full potential? 

97% of our businesses have 19 or fewer employees.  If we want to increase the productivity in this country, it’s vital that more small businesses take advantage of new technology. 

A survey last Novemberof over 1,000 New Zealand businesses found that only 34% of Kiwi businesses own a website and 20% sell their products and services online.

Of course, not all businesses are suitable to trade online.  But all businesses can benefit from more online communication, transactions and compliance.

We need to make it easier for businesses to comply with what government needs from them.   Because another thing we know about small businesses is that most owners have to do everything themselves.   As we know time is money, and we want them to have more time getting on with their business.

One of my priorities, as Minister for Small Business, is to improve the communication between government and small businesses, and I will talk about some of the initiatives we are working on later.

But first, I want to cover three areas of technology which I believe will have a major impact on small businesses and their productivity.

Technology’s impact on small business

Ultra-fast broadband

The Government’s rollout of ultra-fast broadband around the country has begun.  Over the next 5–10 years, we will see fibre enabling speeds of at least 100 megabits per second accessible by up to 75 per cent of New Zealanders.  This is more than 10 times faster than current rates.

Can’t emphasise enough the impact this will have.  It will completely change the way we do business.  There will be opportunities we can’t even begin to imagine:

• businesses will interact with customers in new ways
• location will no longer be important – can truly operate “in the cloud”

Here’s an example of a company already using high-speed optical fibre.  A Hamilton business called Marathon Photos can take thousands of photos of runners at an event in Sydney, and have them available for purchase online the next morning.

Another example – Auckland company Fern New Zealand provides point of sale technology to a group of wine shops in Noumea - they can remotely control their customers’ computers from Auckland.

Businesses need to be prepared and take advantage of this opportunity.

Growth in mobile applications

Incredible growth:

• The iPad sold 2 million units in its first two months on the market, or 3 iPads a second.
• During that same period, apps for the device have been released at a rate of roughly 140 per day.

People are using mobile devices in imaginative ways.  For example, in Melbourne I can download a free iPad app which tells me exactly when and where I can catch the next tram, in real time.

There is so much demand for iPad applications right now – making websites friendly for fingers.  hairyLemon is a Christchurch website design company – they’re going gangbusters at the moment, designing new ipad applications for the US market.  They plan to increase their staff numbers by more than 30 percent this year.  

We need to get smarter with the way we provide services and information to businesses.  Think about web services rather than websites.

For example, I am pleased that our government website for business, www.business.govt.nz, will soon have iPad applications.  The first one will be a Business Healthcheck module.  If you’re a business owner, you can check the health of your business while on the move.

Potential of geospatial technology

I feel evangelical about this whole frontier – I’ve got the religion. 

Over the time I have been involved with information and communications technologies, there have been other revolutions - the personal computer, the internet.  And I do believe geospatial information is at the heart of the next revolution.

Geospatial information is all about location. Every time you use GoogleMaps, call emergency services, fly or take a ferry, or buy a house, you are using geospatial information.  It’s becoming more and more a part of our everyday lives.

Geospatial information and technology already contributes $1.2 billion to our economy.  There are significant opportunities for this to grow even more.  But we need government and business to make more use of the data already out there.

What is government doing to connect with small business?

www.business.govt.nz

How many of you have used this website?

Business.govt is the first stop shop of trusted information and resources for business.   Relaunched last year and constantly being updated.

The business planning templates, tools and training can help you more easily support your clients. 

It's Being expanded this year to include:

• more transactional services with government agencies
• a single login for businesses to access the services of multiple agencies

Encourage your clients to have it as their homepage, link to it through Facebook, and sign up for their free monthly newsletter.

Any new developments by government for business will happen here – so watch this space.

You can also work with the business.govt team to provide your content on business.govt, with a link back to your site.  

The site is already there – it’s all free – it’s up to you to make the most of it.

Single Business Number

What if every single business in New Zealand had its own identifiable number?   How much would it make your life easier, dealing with government?  How much easier would it be for your clients?

Government is working on it – a few hurdles like privacy issues to deal with.

But I think it’s a great idea whose time has come - we must get in behind it.

Huge potential to link in with other projects going on:

• transactional services through business.govt
• the igovt single login being developed by Internal Affairs
• potential to submit Statistics surveys automatically

New Zealandcurrently ranks third in the world in the World Bank’s Ease of Doing Business survey.  Initiatives like the Single Business Number will help keep us up there and make New Zealand an easier place to do business.  

Justin Hygate from the Companies Office will talk in more detail later today about how we can make the single business number work.

Making tax easier

The tax system is another area where we need to take advantage of new technology. 

We received some great feedback from you last year on how we can make it easier for businesses to interact with Inland Revenue.

For example, how we can cut down the time businesses spend on those routine tax processes, like filing GST returns.  Because as you know, businesses already have this information in their accounting systems.

Government is working on a number of initiatives to build those straightforward and mechanical tax compliance tasks into business accounting software.

Again, there are privacy issues around the sharing of information, but these are being worked through.

Automating those routine tax tasks will benefit everyone.  It’ll save time and money, allowing you and your clients to spend more time building their business.

Greater access to statistics online

As Minister of Statistics, I want to put in a plug for the great work Statistics New Zealand has done getting statistical resources online.

Your clients provide a lot of information to government through various surveys.   Now they can get something back, for free.

The Business Toolbox is a great example.  It provides information for small businesses on their local markets and industries.  You can get a map of your residential market or a profile for your industry, and use it to research your market potential.

I encourage you and your clients to make use of this free information.

Conclusion

These are just some of the ways government is changing the way we deal with businesses.

We want to see small businesses become more productive, because we all benefit.

But government can’t do it all ourselves, nor do we want to.  We all need to make better use of the stunning array of the technological wizardry we now have.

Small businesses are the life-blood of our economy.  Increasing the productivity of businesses will help New Zealand grow and achieve its potential.