The Gig: Dunedin's new gold rush?

Last year, Dunedin won Chorus' Gigatown competition, becoming the first place in New Zealand with 1GB per second broadband. Is it transforming Dunedin's economy or just providing higher resolution movies? We take a look at how it's being used and where it's taking the city. 

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The MixBit offices, designed by Luke Johnston of BrandAid

On a lonely autumn evening in 1861, Australian prospector Gabriel Read struck gold in a creek about 70km west of a fledgling Dunedin. The discovery led to a population explosion, and within three years, Dunedin - as port of entry - was New Zealand’s biggest, richest city. Now, 155 years later, Dunedin has had another stroke of fortune, winning the Chorus ‘Gigatown’ competition in 2014 and finding itself bestowed with a new asset that runs underground: lightning speed internet.

Winning made it the first and only ‘Gig City’ in New Zealand to get ultra fast broadband speeds of one-gigabit per second, which gives its constituents internet about 100 times faster than the average copper broadband connection. It now takes just 45 seconds to download a movie in Dunedin on the Gig. Downloading movies, however, may be the least important benefit. After years of economic stagnation it holds as much potential, if not more, than that shimmer of gold gleaming in Read’s pan.

Indeed, revamped Gold Rush-era warehouses are already being reclaimed by an expanding technology sector, the Octagon bustles with invisible, free, ultra-fast broadband and spirits are high. “We’ve now got the fastest internet speed available in the world, right here,” says John Gallaher, a senior investment adviser at Forsyth Barr and chair of Gig City, the governance body of the Gig City project. “The speed - if you’re sitting with a smartphone in the Octagon - you can download something 50 times faster than you could on 5th Avenue, New York.”

As part of the prize, Dunedin gets gigabit speed connectivity at the entry level UFB retail price - residential costs less than $100 per month - plus $700,000 funding from Chorus for entrepreneurs and community groups to kick-start fast fibre-related projects, a creative business ideas incubator series, and an additional $250,000 funding from Dunedin City Council.

Gallaher says the Gig has made Dunedin a very unique proposition, and the community hopes this huge utility could just make the Southern town of almost 130,000 people a tech-hub. “Within New Zealand we will be one of the most connected cities in the 

country for quite some time. I think the city could easily accommodate a version of Silicon Valley.”

So far, 67 percent of the gigabit-speed internet infrastructure has been rolled out, with over 36,000 premises able to connect and an uptake of 26 percent. By December 2017, every property within the Chorus footprint will be within reach of the gigabit broadband service.

Gallaher compares its potential to bringing electricity to every house in a city - it just makes things faster, more effective and allows people to be more connected.

“This is an infrastructure build when you think about it - you have to dig a ditch, lay the cables, and then find a provider to get you connected. It’s like setting up powerlines,” Gallaher says. “It’s a 21st-century infrastructure that the city has a fantastic opportunity with, and we are miles ahead of everyone else.”

Many would argue Dunedin needed the boost. In a piece entitled ‘Is Dunedin out of the doldrums?’ RNZ journalist Ian Telfer cautiously wrote that the city was finally seeing growth in real estate, tourism and niche technology industries with huge potential, such as gaming.

“The win was extremely important to the economy of Dunedin as the tech sector is a growing component of
the Dunedin business ecosystem,” Dunedin mayor Dave Cull says.  NZTech research estimates the tech sector is worth $330 million to Dunedin’s GDP. But, just two years into the rollout of ‘the gig’, it was still too early to say whether the economic character of Dunedin had changed, Cull says. “We can see that the tech sector is growing here but we are yet to see any meaningful analysis that can really answer this question.”

However, anecdotally, tech and gaming businesses are enjoying improvements in productivity, and appear to be bedding in for the long haul, Dunedin City Council economic development programme manager Fraser Liggett says. “We are aware of some good stories around growth in the tech sector, like [game-company] Rocketworkz, which opened its doors in early 2015 with five staff and has now grown to over 15.” 

The city has also installed free internet in The Octagon, central Dunedin, with Cull calling it “one of the fastest public access Wi-Fi networks in the world”, available to all, free-to-access and without the requirement to register. Users get plenty of data a day, City Council CEO Sue Bidrose says, enough to download a movie or TV show, or catch up with family overseas via Skype.

“I look out of my window and I see students, tourists, locals in town, business people on their lunch break, all using the Octagon Wi-Fi. Then when the cruise ships come in I can see some of the older people sitting outside the i-SITE talking to their children, letting them know they are okay, that they are having a great time. I love to see that.”

Bidrose says winning the Gig has huge implications for Dunedin, and hopes in the city are buoyed. “We want creative people to choose to live and work in Dunedin, students to stay after they finish their degree, and local innovators to be working together. The Gig helps make that happen.”

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Connecting Dunedinites to the world 

Dunedin developer Tim Tait is one of the Gig City’s biggest advocates. On the Gig, and based out of his own home, he is still yet to work for a Dunedin client. “My most ‘local’ client has been in Wellington,” he says.

Tait was one of the first and most enthusiastic people to take up the gigaspeed internet. “It felt like every street around us had access but ours. I was checking Chorus' upgrade map a couple of times a week and the day our street showed up I was on the phone to get us hooked up.”

Once he got it, he found his connectivity improved dramatically, something incredibly important for the developer who currently needs to be online from 5:30pm to 1:30am every weekday with his UK client, Venntro Media.

“Our ADSL constantly dropped out, I'd struggle to hold Skype calls or even stay in the chat room with the UK offices. Now if I ever have an issue it’s usually down to the services I'm using rather than the connection. There are two offices I deal with in the UK and quite often I can see and hear them better in video calls than they can each other.”

Where it used to take a couple of days to do a monthly virtual machine update in the UK, it now only takes him a few hours. “I can be at work now and not worry about someone else in the house sucking up my bandwidth. It's no longer an issue for someone in the house to have Spotify running while someone else watches YouTube while I'm on a video call. “The big bonus is the bottleneck is no longer on my end, things are more limited by everyone else's connection.”

A new valley? 

Some of the world’s tech titans have even opted to base a business in Dunedin. Video-sharing software maker MixBit, formed by YouTube co-founders Chad Hurley and Steve Chen, has offices in San Mateo, in Silicon Valley, and Princes St, just beyond the Octagon.

“Historically, the co-founders of YouTube acquired a startup business based in Dunedin,” says office manager Meg Garner. “They decided to see what the talent pool was like here, so we set up an office and the rest is history. All nine staff from the Dunedin office are locals, which is a real testament to the skill level here.” 

Mixbit, which was previously known as Avos and is now led by Hurley, has a constant video stream going between itself and its counterparts in Silicon Valley. Garner says MixBit fully supports the Gig City campaign, but runs on its own managed service for its own reasons. “In saying that, all staff have connected to the Gig at home - if it’s available - and they love it.”

Plus Dunedin has the lifestyle aspects that appeal: the history, the landscape, and the coffee are selling points, alongside the ultra-fast broadband, Garner says. “Dunedin is a perfect place for an IT company, even more so with UFB. Working globally has its advantages as well, we ultimately get six days where staff are online with the time differences between the US and New Zealand.”

Using the gig for good

There are also a number of community initiatives using ultra fast broadband to improve their services to the city’s most needy. One is the Methodist Mission, which recently received $25,000 from the Gig City trust to develop virtual reality education programmes for high-needs learners, including people in prison.

The Mission is working with Otago University’s Information Science Department and Animation Research Limited to develop prototypes for two programmes.

One is Virtual Mechanic, where learners wear Oculus Rift VR headsets to become fully-immersed in a virtual mechanic’s workshop and perform real mechanical tasks while developing core literacy and numeracy skills. The other is Virtual Driver, a 360° video application which uses Samsung Gear VR headsets and vividly simulates the sensory effects of drink driving. “Gig City has provided critical seed funding and enabled us to move rapidly through the prototype development stage, which is essential to securing ongoing development funding,” business development leader Jimmy McLauchlan says.

Since Dunedin became a Gig City, the Mission has seen an increasing awareness of the capability of UFB, particularly with other NGOs, and is having more discussions with organisations about how to utilise the Gig for social services. McLauchlan says gigaspeed internet improves the potential for NGOs to deliver remote services to isolated clients.

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The future of education

Logan Park High School has also been one of the beneficiaries of Gig City funding provided by Chorus and Dunedin City Council. While the school is not yet on the Gig, assistant principal Kristan Mouat says the prospect of gigabit-speed internet “changes everything” in terms of student and staff expectations for superfast speed and the potential for faster collaborations and work. 

Its students already bring their own devices to school, and collaborate with each other and teachers using online services like Google Docs. Logan Park recently secured $20,000 in funding to develop a Maori to English translation app. It all started when the school was approached by Fred Dichtel, a linguist, who wanted to collaborate with a school to develop a useful app. The project is led by the school’s Maori teacher in collaboration with Dichtel and the students.

“One of our Year 10 students Ennis Massey is really talented with computer programming and developing apps. He's helping with the coding for the translation app and the Maori language students are trialling it and providing feedback so it will be great for everyone.” 

And Mouat says the school has huge hopes for the project. “We hope to help develop an ultra-fast educational English-to-Māori online translator that provides accurate translations and explanations, at no cost. This app will harness the Gig City ultra-fast broadband infrastructure to offer a swift experience to 100,000 users in the community, in Dunedin and the whole of New Zealand.”

The vision is to utilise the fast internet and user-friendly online technology to help people further their knowledge of Te Reo. $20,000 lets it go from a great idea in development to a clever reality,” Mouat says.

Creating fertile ground for startups

Jason and Kate Lindsey want to encourage students and locals to think of the Gig as their secret weapon. The pair have started a co-working space called The Petri Dish at 8 Stafford St, which they hope will create an environment to foster “a success story or two” that will attract startups from around the world ‘to tap into that magic’. “People interested in creating a new company should try to consider [the gig] their ‘unfair advantage’ and find ways that moving large amounts of media quickly can be built into a business, or at least, part of their model,” they say.

The pair moved to Dunedin in 2010 after a stint in Los Angeles working in film and television. Getting the Gig has made their business much more efficient, they say. “Now that we have UFB, we are able to offer a system to move massive amounts of data, connecting us to anywhere in the world. As filmmakers, we can now operate like we’re just a company down the road in Los Angeles, London or New York  - that’s something we’ve dreamed of for 15-20 years. We knew it was going to be possible, someday. Now it’s a reality.”

Office space is already affordable in Dunedin, but Petridish plans to use the Gig to particularly cater to tech and creative media companies, so that companies have the flexibility to grow and shrink without unnecessary overheads. “We’ve often discussed the need for an innovative space as a way to attract and capture young companies and entrepreneurs in Dunedin. We believe that if we are able to provide a space that people love to work at, it will be good for growing small businesses and startups, here.”

Bringing the city together

Local IT expert Heidi Renata describes the Gig City win as having created a unity in the city “usually only seen at rugby games”. “It was electric, it felt amazing to be surrounded by thousands of likeminded people championing the city to eventually win the campaign. It was very successful in bringing a community together.”

She is also working to bring the tech community together by building a collaborative working space to foster innovation in Dunedin, and has founded Innov8HQ on Vogel St. She sees the space as being about “collaboration to adapt”, providing an ecosystem for tech experts and leaders with the aim to retain talent in Dunedin and make Dunedin’s ICT product even more exportable.

Renata also hopes the space will inspire more Maori and more women into the ICT sector. She says Maori-led initiatives are having major impacts in other indigenous communities around the world, forging new possibilities to support and collaborate with each other. “With momentum gathering in the city, I think the next two years will prove a valuable case study, so I look forward to reflecting back then to see what has been unveiled.” 

NZ's new game development hub?

When it comes to game development, Renegade PR’s Tim Ponting believes Dunedin is the ideal place to build a thriving scene now the city is on the gig. Ponting - a self-described Pom - has been in Dunedin for four years, after migrating from the UK with his wife.  He says he quickly realised that Auckland and Wellington had got their act together to attract games developers and create a ‘scene’, but Dunedin was actually in many ways a more attractive option for game devs.

“Being a Gig City is immediately attractive to anyone with a tech background – whether an existing company or prospective startup. It takes a while for the message to get out there, but it’s happening. There’s also been a noticeable increase in enthusiasm from the tech community here, a sense that it signals a new start for the city’s profile as a great place to do business.”

He set about creating IndieDevKit, a knowledge platform to help indie developers carry out their own marketing and communications, and the scene is growing by the day. “We have monthly game dev meetups that attract more attendees on a monthly basis, and there is a real sensation here that Gig City will become New Zealand’s newest and most attractive game development centre.”

He points to two major game dev teams expanding in Dunedin: Runaway, which specialises in mobile games inspired by nature, and RocketWerkz, a team led by Dean Hall, who already has a massive global video game hit under his belt. The combination of those established players, the number of excellent programmers coming out of the university, the rise of low-to-no-cost co-working spaces springing up, and the Gig was a potent mix. “For companies with offices elsewhere in the world, like both RocketWerkz and Runaway, [the gig] simplifies and speeds up the process of globally distributed working.”

Ponting says the government’s announcement of a Global Impact Visa for entrepreneurs to come to New Zealand has some interest from the NZ Game Developers Association, which had been actively working with MBIE to ensure it works for young innovators in game development. “Time will tell whether the pilot is successful – it’s currently targeting 400 visas over four years. From my perspective, the challenge is that the scheme needs to take into account the reasons innovators choose their set up locations. New Zealand can easily compete on quality of life, but the country needs to prove it is well connected enough to foster growth as rapid as it would be should entrepreneurs set up in San Francisco or London. In terms of game development, we’re well on the way.”

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'Time is too precious to waste'

ADInstruments chief executive Michael Macknight is one of Dunedin’s biggest success stories, and is excited by the prospects of the Gig. He started his company, which sells hardware and software products to medical and health researchers, scientists and educators, by accident when he was a university student, and has never left Dunedin.

As of 2014, the business was turning over about $30 million per year, and employing 200 staff in 13 international locations including 60 in Dunedin. His clients include the International Space Station, and his software can be found at the Universities of Oxford and Cambridge.When asked why Macknight kept his multi-million business in the southern city, he says ‘Why not?’

“We use email, Skype, various cloud-based platforms, to keep in touch along with travel when necessary. I don’t think we feel any further away from things than if we were in Auckland or Sydney. We certainly don’t feel any difficulty using the latest technologies. The internet has basically levelled that for everyone.”

While ADInstruments was already on fibre when the Gig became available, Macknight is a huge advocate for the power of the Gig. “There is a buzz about it, and it is great for Dunedin to have something earlier than other places. Businesses like ours need great internet access for everything we do. We run our business on cloud services like NetSuite and SalesForce.com. We create software and content including lots of video. We run hosted services for our customer. We use video conferencing. We all use the internet for much of what we do. Fast internet makes it possible. We would seriously think about leaving Dunedin if we thought that slow internet was compromising our work or wasting our time. Time is too precious to waste.”

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