Let's give ourselves a pat on the back

New Zealand is doing well internationally when it comes to update of fast internet. Now we need to ensure we make the most of the economic potential of the technology.

Farmer Charles Nimmo from Leeston in the Canterbury Plains was the first person to access internet via Google’s top-secret Project Loon, a mission to see if an array of high-altitude balloons could deliver Wi-Fi web access to remote areas, far from fibre connections. Nimmo used his connection to check whether the weather was going to be right to crutch his sheep.

Google chose New Zealand for the experiment in 2013 because of New Zealand’s reputation as a great test bed for innovation. As Malcolm Fraser, chief executive of the Future Cities Institute told the NZ Edge website, “We tend to be early adopters, any technology that reduces the tyranny of distance, we’re keen on. We’re a small market, which means it doesn’t cost much to test something here and if anything screws up we’re far enough from major markets for it not to have a spillover effect.”

Casting ourselves as a nation of early adopters is the perfect foil to the naysayers who protest that our tiny size and economy mean we inevitably lag behind the rest of the world.

Our world leader status is borne out by statistics on our adoption of fast broadband technology. Figures from the World Internet Project show more than 70% of New Zealanders can be classed as “next generation users”, confident in the wired world and wanting high-speed, consistent broadband to keep the data flowing and the video streaming. When the project surveyed us in late 2015, ranked against 39 countries, we came in top for our internet use, with 92% of us surfing the web. In addition, 42% of us stream video for entertainment daily or weekly. We tie with Sweden for first place when it comes to access to broadband (96%), and we’re fourth when it comes to the take up of distance learning.

With smug satisfaction we can tell our cousins across the Tasman that our download speeds outperform those in the Lucky Country, according to benchmark speed tests by TrueNet and Ookla.

Nor have we been dogged by the issues besetting the National Broadband Network (NBN) project in Australia, where there has been slippage in goals and targets. The initial NBN target (eight million premises connected by 2016) has shifted to 2020, and politicians disagree on the Mixed Use Technology model for fast broadband (using copper, satellites, mobile broadband and fixed wireless alongside fibre), with critics saying the only way to future-proof is more fibre. Meanwhile, nobody can be proud at the cost blowout – from $29.5 billion to $46-56 billion, most from the public purse.

Globally, we’re no slouch, either. The Organisation for Economic Cooperation and Development rates New Zealand as ninth out of 34 countries for broadband growth and New Zealand has the second highest growth in fibre uptake.

The plan is for us to maintain our lead. If we meet the Government targets announced in October last year, 99% of New Zealanders will be able to access 50 Mbps fast broadband by 2025, and the remaining 1% will have access to at least 10 Mbps. This change will see New Zealand move from 17th in the world for rural connectivity to seventh, Communications Minister Amy Adams says.  By comparison, the UK is aiming for 97% of the population having access to 24 Mbps.

We’re going to need that fast broadband because Chorus is already seeing the average NZ household using more than 100GB of internet data each month, and that's growing. Even Cisco’s conservative 2016 Visual Networking Index predicts the average Kiwi user will generate 35GB of internet traffic per month in 2020, up from 20.7GB in 2015. By 2020, the data streaming across our networks every 28 hours will be the equivalent to all movies ever made. We’ll be using some of that data to manage the internet of things, the predicted 37 million-plus devices and connections running everything from digital health monitors, smart home appliances and on-farm sensors or stock tracking devices.

By 2020, the Cisco boffins predict an average speed increase to 49.1Mbps, ahead of the global average of 47.7Mbps and close to the fastest speeds globally.

Fast broadband is only a means to an end, and that aim is to turbo boost our economy. The most-cited study to date, by Alcatel Lucent and Bell Labs, suggests that building the fibre spine will contribute $5.5 billion to GDP over 20 years.

Over the same period, the same analysis finds that services enabled by fast broadband in business, agriculture, health and education could lead to savings of $32.8 billion. The figure for business alone is $14.2 billion, with the productivity gains coming from two big drivers, high definition video conferencing and teleworking eliminating the tyranny of distance. Also included were the gains from better online training, customer support and workload management.  Alongside productivity gains, the authors included reduced communication and travel costs, and savings from shifting functions to the cloud.

Schools are already reaping the benefit of cloud storage and software as a service, and by 2020 the benefits should be worth $3.6 billion, through the lowering of the cost of building and disseminating 21st century skills.

Our health system can expect $5.9 billion of returns, according to the Alcatel Lucent/Bell Labs report, as online consultations and remote monitoring reduce hospital admissions. The latest NZ Health Technology Review says local medical device and health IT companies are already prospering, with a total annual turnover of $1.3bn and a research and development spend of $129mThe potential economic upside outlined in the Alcatel-Lucent/Bell Labs report is the carrot to close the gap between where we could be and where we are. According to the World Economic Forum Network Readiness Index, New Zealanders rank higher for the social impact and use of fast fibre than for our business use and economic impact. So we like using UFB to stream Game of Thrones, update our Instagram accounts and dabble with Periscope, but have not been as fussed about using the technology to make money.

Supporting that conclusion is the MYOB Business Monitor report that revealed only 54% of SMEs had a website in 2015. It does make you wonder how customers find the 46% who do not. More concerning, the report notes that this figure has remained roughly the same for five years.

Tracy Moyes, general manager of coworking and collaboration network BizDojo, says fast broadband is only one part of the equation to transform from being a commodities-based economy, to being a knowledge exporter and creator.

Moyes says being up there in the world in terms of the speed and extent of our broadband network is all very well, but that’s not going to lift our economy if all we do is stream videos and watch YouTube. What needs to happen now is for New Zealand businesses to sign up to our fast broadband and use it to boost productivity, to grow their companies, and to sell their products to the world.

Stephen Knightly, the chair of the New Zealand Game Developers Association, agrees. He says fast broadband has allowed New Zealanders to access global culture – movies, videos, games, social media – at the same time as the rest of the world, and that’s a great leveller. The next stage is for New Zealand creative and content production sectors to use our superior broadband to get products out to the world. And he says the Government needs to support that.

“The content industry has globalised and yet Government support for content creation is focussed on the domestic market. We could make content funding more sustainable by having a digital export focus so our creative industries can aim to go global from day one.”

Knightly would like to hear Americans complaining that geoblocking prevents them from accessing the latest great New Zealand content. “Now that’s where we want to be.”

This article originally appeared on The Download.