Introduction by Rod Oram - Being webcast - SecondLife (Cisco and Kordia, and HP) - going to be archived, as the rewrite of the digital strategy unfolds, it will be an opportunity to mine these questions - Please do put business card in the window of the front of the satchels - downstairs in the Kordia lounge, there's a draw for it - Full program, strict time keeping David Cunliffe - refrigerated shipping - Bill Gallagher (hamilton), shock family cow to stay off the lawn, solve electric fences shorting out - plastics could conduct electricity (noble prize for chemistry) - weta digital, absolutely leaders in 3d digital graphics - humanware, revolutionizing technology for visually imparied gps for the blind - cebit 2007, now 21 companies from nz attending - kiwis are great at innovation, as a sector we're on fire with the idea that there's isn't anything you can do with number 8 fibre - new generation of innovators pushing new ideas and our country forward - don't need to be good, way better than that - way better than the global market in our chosen niche - better than the increasingly fast cycle times of other products - loves incredibly smart and talented people in the sector - just when you think you understand it, technology moves again - contribute our best ideas for an action plan to take us to the next level - task to contribute to act upon the best idea - digital ideas 2.0 summit - pivot to writing the next digital strategy - released in june 2008, to guide sectors in development over next 2 to 3 years - let's harness that energy and channel it - drive forward - knowledge backbone, ict sector - knowledge economy - knowledge society, encourage most advanced skills - national broadband map launched this afternoon - government is taking this seriously, and acting upon recommendations coming from it - revitalizing the ict sector - broadband - recalling where we've come from - taking stock of where we are - plans for the future - 2005 digital strategy framework - among the best in the world at using ICT for economic and social benefit - needed to get 3 things right - 3 C's at the same time - connection - user confidence - content - actions of business, community and government - need to be engaged - advisory group - TUANZ and Internet NZ very helpful - 70 government initiatives started since then - some completed, some a few years to go - business of this summit is the digital strategy refresh - connection - path to fast broadband hasn't run smoothly - thought it would be a great idea to privatize - with regulatory framework would yield the best price - consumers didn't do well from this - number portability wasn't solved for 15 years - speeds were too slow, prices too expensive - put it firmly in the bottom 1/3 OECD average, now starting to rise up the rankings - need to go further and faster - regulatory process was still too slow, commission act was limited to the parties by 2005 - shortcomings were subject by 2006 implementation and stock take reviews - unbundle - speed up - review and develop rural strategy - create fairer wholesale environment - may 3rd 2006 - policy was famously leaked and announced - messenger with the bikeshed - had to make fast decision, stick with the reforms and announce them that day - resulting changes have been far reaching - industry cooperation has increased - telecom now has a new team - demonstrated good will - committed to more rapid and legally binding rollout - evidence of new recognition of importance of the customer, catchup is now required - does detect new enthusiasm that can help carry things forward - in 2007, the mood has been of hope - come from environment of infrastructure being too slow, and digital divide being too high - nz is more competitive, and better knowledge infrastructure - growing really strongly, rose 7.9% in 2006 financial year to 17.6 billion dollars, exports grew 19.9% to 1.6 billion dollars - kiwi creatives are winning on the world stage - the good is *not* good enough - our challenge is to be world class - globally competitive, with internet connectivity that supports this - translate new hope into real results - stretch ambitions, and grow the horizon of what's possible - expectations are growing - gen Y has expectations beyond gen X or baby boomers have - want it fast, now, expect it customized not off the shelf, want it interactive - web 2.0 has changed consumer behavior from passive to participation, and more connected at all levels - born global - need fast affordable broadband that this new environment has to offer - where do we go from here - what's the roadmap for future of fast broadband? - be in the top half of the OECD - achieving such a goal with involve substantial investment - further government intervention will be necessary - particular infrasture gaps are - extending fibre further than telecome plans to - improve for businesses - improving rural broadband infrastructure - improving countries international connections - government has set a vision, has made progress - actively considering fresh new policies - interested in people's ideas, and prepared to support them - accelerating investment in fibre - FTTN - telecom improvement, but not sufficient - better than retrofitting - better than current servicing plans - leaves open opportunities for local vendors - by time of completion, expects it to be the low end of what's available - will leave nz with less than 2007 capabilities of leading globally - suit ADSL 2+ technology - VDLS needed - appears to be quite cautious - governments long term vision is fibe to home - economics of this in short term are too challenging - immediate goal is fibre to the node - towns greater than 10K, access to speeds at least 20MB/s - 90% of towns at least 10MB/s, not telecom's 80% - faster in the core, and further broadband reach to the proliferal - see whether we can unlock the captial of those investers who aren't driven by short cycles, and can accept returns of low risk utility - aware of growing debate of establishing this investment vehicle - telecom must by agreement, now provide 2 years notice of any further cabinetization - commission is in the process of finalizing new bitstream service - government has provided of regulation of subloop unbundling - telcom's NGN access layer must be compliant - confident that we have the right regulatory processes in place - could be futher refined by including schools and hospitals in the open access loops - broaden scope of fibre program, link together urban fibre loops - rural services - significant period of time, there has been considering under invesment int the rural network - telecom has invested in 22 million annually over last 13 years - telecom's annual depreciation is 50-70 million dollars - ongoing replacement program should have been put in place - receive 25 million from industry for it's service obligation - investment has been negligable - therefore of the view that importance of telecom's role is especially important - not a one horse race, should be open access where possible - range of technologies available - must be optimized on regional basis - looking for regional government to step up to the plate - arrange of other options, premature to speculate at this moment - mix of technolgoy is needed, range of policy tools is on their way to help accelerate this - international - highly dependant with connection in outside world - southern cross has lock in (australia and USA) - price rather than capacity constraints - appears to be out of whack with international norms - bottle neck is getting from here across the ditch - a second cable to australia would improve things - market may consider investing, but doesn't consider this investment would help against the pricing - price of international bandwidth is a problem - examining a bunch of possibilities - will consider a contestible subsidy for cable to australia, potentially to be operating on an open access basis - key take aways - aggregating demand - partnership with local government and communities - regulatory processes - spectrum auctioned, with open access at good prices - prepared to work with industry to improve urban and rural broadband - actively watching international links - actively interested in hearing views from industry for non-traditional methods of financing fibre to the home - nz can leverage its lifestyle - want kids to strive for world best - need to have competitive ict structure - can't afford 30% of population to be left out - challenge each and everyone of you to have your say, join in the conversation, figure out where we are, and what we have to do to advance NZ's interests - best ideas captured and used 3 representatives of gen Y (Metuamate, Minett, Barlow) - bebo/facebook, websites are so yesterday - so many tools that are coming new verbs - 5 years ago, sitting at home in a bedroom was anti-social - now if you're not on facebook, that's anti-social - stopped being solo machines, now being portals - how can we use this new media? - not talking about a whole new world? - old rules apply - be close to the consumer! - now sharing facebook time - seems a lot quieter at first, but looking closer it's organized chaos, becomes easier for what's going on - see what people talked about a while ago - gives a great opportunity for brave companies - not a generic formula that is going to give growth - once you've found stuff, you'll have to update it to market activities - being active, not passive - all love networking, and use the networks of your networks - not possessive competancies, but being able to connect to them - how do we leverage them? - be visionary - generation Y are the experts - need to be acknowledged - survive each day, depends on something that - it's there world that you're trying to tap into - when you do decide to step out, make sure you can take a tour guide that can read the map - gone are the days where young people are seen but not heard - you can't go forward without them, they need to be at the same table, particularly around the digital future - generation gap, and the idea that there's no such thing as a digital divide - young people have grown up in a different age, should assume that they're all technical and ably minded - there are people not in this conversation, because they aren't able to - environment, in terms of sustainability - being realistic - government is doing a fantastic job - not all young people are focused on me, me, me - digital earth summit - al gore, virtual and 3d version of the earth, associated with various information to describe it - recognition of paramount needs for people to understand it better - say you listened, but did you actually hear? - not saying we have all the answers, some situations that you can involve us, and make us feel somewhat important in terms of the strategy - give people a voice, ideas that we have that will be very different from chief advisors - have different networks, communities - nz related content - pleased to see stuff on digital content strategy - need to be thinking about our identity, and what messages we're putting out there Pete Hodgson - economic development minister, hats in science and tertiary education - since change of government 8 years ago, placed idea of economic development/transformation/plurality at the heart of our thinking and it still is - because we're labour, we did it not for ourself, but other ends - if you have a stronger, diversifying economic, you can afford yourself more privileges in terms of economic development - deliver higher standard of living, and more certainty - could press the good news button about how we're doing, but let's not bother doing that - wherever we've got to, it ain't good enough by any means - want to talk about role of ICT on economic development in a general sense, and make some assertions about that - began own thinking about seeing ICT as a component, now 'enabler', but now doesn't think that's good enough, it's a pre-requisite - good pipes - good skills - spread broadly across sectors and a geographic sense through digital strategy, or reform of telecommunications market - what's the next chapter? giving that speech next week - there is a list of priorities, and not very long - ICT is on that list, it's 1st on that list - gets to it real quick, and now - broadband - we know connectivity argument, and understand how we ship our so called weightless exports offshort - genomics has moved out of laboratory into business already - entire sequence for under $1000 - ensure nz farmers have best breeding stock, and gain competitive advantage - think of the data, getting it shifted, sifted and put to work - straightforward and uncomplicated matteres - digital skills - need better skills, and more skills in the general digital space - have sought year after year to respond - now have ability to converse with providers to try and deliver what stakeholders want - ICT are passed through osmotically - can be taught, but also allowed to emerge - automatic milking robotic systems, can milk any time of the day or night (Hamilton) - think of productivity gains, and skills needed - xephr, techonology woven into fabrics to allow the monitoring and reporting of things like diabetics, heart, etc.. - show cased in Medica - doesn't restrict wearer - endless wellness applications, and remarkable story of convergence of technologies - needs hell of a lot of connectivity and a hell of a lot of skills - inviting you to think as a group of top drawer individuals for ways for we as a new zealand, can further the use of digital technology across all entities and walks of life - engage with government as they look at range of strategic options available - changing really quickly, we are supposed to be a nimble nation, let us demonstrate that Stephen Tindall - Chair of growth and innovation advisory board - was previously on science and innovation council - where are the big opportunities for this country? - been involved in 38 years, travelled extensively - early days of warehouse, first people to scan - tiny business - used latest technology - grew at an enormous rate - exactly where we need to be as a country in the 21st century - economic, environmental and social - rural - now starting to see consumer driven information requirement on traceability of product - nz is focusing at premium end of the cycle, need to be smarter - icebreaker, has traceability of farm and wool (and in some cases, sheeps back) - talked to tesco in particular, set up 30M dollar with university - concentrating on traceability - we need to do this with animals, and being able to run farms better with probes out in the paddocks - started a thing called KEA, 25K members, all connected, and really eager to help us back in NZ - touch point for us - railways, telecommunications, roading changed face of this country, fast connectivity is going to do the same - [showing video] - computer club house, 3-7pm - create design and innovation for youths - explore technology, and get involved in creative projects - have mentors to work along side them - want people to be active, not passive - share with club houses all around the world - creating wireless network, to connect with OLPC - building brand new club house, designing it themselves - clubhouse274.org.nz - OLPC - Tindell foundation have helped to sponsor - put a channel under the ground to connect to fibre - putting a wireless network up in church spires, houses, and commerical - $9.50 per month for this - if we can enable these kids to grab this technology, and be creative through these years, and sell their technology to the world, thinks we can transform this country - we are the interface between government and business - 100 emerging businesses (technology, science, hardware) - looks for creating a better standard of living for kids and their kids - offer you our services - through MED to us, do whatever we can to enable this thing to speed up - the current plans aren't fast enough Communities, what are they? (Zwimpfer and Hiakita) - 20/20 trust elevated 10 years of supporting community ICT - only or few national organization that has this special focus - community and voluntary sector is significant contributor to NZ's economy - been an active participant in digital summary - message for this summit - trust us - collaborate with us - invest in us - 4 questions - what are the social impacts for the internet? - equitably and affordable access - what about kiwis who don't have access? - they are important - how important is community to NZ? - what are we doing to preserve our history? - those were the easy ones! - wants to address the challenges that communities face on embarking on a digital journay (10 P's) - people - must remain at the heart, starts and ends with people - local ownership of this vision, supporting local champions with handups not hand outs - problems - if only we were all digital natives and we wouldn't be a problem, but many of us are neither eg. digital foreigners - if only we were all connected, 400K don't have access, and 40% maori and 33% pacific islanders have access to the internet - can't even start the digital journeys - partners - communities need partners (so do governments and businesses) - need strong partnerships, digital strategy 1.0 got this right, 2.0 needs to keep this focus - pilots - translating words into actions - don't provide long term solutions - leave the pilots to business and community trusts, governments should leave this space - welcomes internet nz's initiatives here - projects - good, but not sufficient for creating a future - learn from the pilots, and scale up - 2.0 must move on from projects - policies - we're starting to get warm on the digital journey - should be the starting point for 2.0 - transforming successful projects into policies, greatest challenge for the government initiatives - programmes - need to make sure real pratical things follow on - if this gets too hard for government, outsource implementation/delivery - 20/20 has been outsourcing partner for several years, and it works! - plans - all 3 partners need to engage (government, communities and business) - sector driven action plans - wellington has this sorted eg. citi-link, and kerry prendergast has done her own digital refresh, 100% by 2012. need plans and details to come - wellington is also content capital with people like penny from digital library and weta - local authorities can take a role in this - progress - how do we know what progress we're making? - see this as failure of 1.0, can count lots of successful initiatives or projects, but do we really know where we are as a country, or communities involved? - need research, and 5 million dollar fund would be a good start - agreed milestones - partipication - end of journey - an example that has worked really well (the tuhoe story, video) - didn't know anything about wireless technology - being familiar, without having to explain - part of challenge is being comfortable - take on board values - culture is sign of prosperity - up our rivers, into our bushes learning about different things - want to elimiate problems of location and isolation - need best communication network that suits our environment and topography and how we're structured as a society - don't want to be passive citizens, that purchase and use technology as we are instructed - don't want to be dependent on the government - love using this medium, if we can get them into adult learning, we'll see them with many more skills - want to be communicating in an immediate way with 2 way people - connect and share information, experiences and expertise - be the masters of your own destiny, take responsibility for governing yourself - tuhoe.com - where did we find the courage about wiring up their environment - not too sure, motivations were a whole bunch of other things - best opportunity and potential for their kids, and be major contributors in this society, technology provides a tool towards that goal - 35K people, only 5% are resident in their tribal area - significant amount of people away from home, and that technology helps those people contribute back into their society - relationships have formed, with 20/20 trust, MED - engage children and in our schools who set us on this path, not just network, but also strategy - challenge to business and ministers, the reason why this project has worked because of relationships with people. must develop relationships with forgotten communities to identify what their aspirations are and their needs. Videos on digital strategy - foundation of the blind (automated digital delivery service) - distribute books over the internet - talking digital book player - through partnership fund - include lessons learned while we run the pilot - hope to start the library service early in 2009 - players are wireless capable Laying down the challenge Panel session (Reynolds - Telecom, Drury - Xero, Williamson - National, Chignell - Vodafone, Freeth - Telstra, Skilling - NZ Institute, Chair) - broadband and digital future, significant part of nz economy - how do we build on our existing strengths, and what can we do to be world class - weightless economy (eg. digital) - film, biotech, business services not sensitive to physical location, or scale - broadband is crucial to achieving that - how do we solve tomorrow's problems Paul Reynolds - tale of 2 cities, leaving london and universally, you lucky sod, for running telecom, arrived in auckland 'why did you take the job?' - digital summit, insprirational, enormously challenging - are a key part of the landscape - very substantially reshaping that - start with the 'b' word, broadband, key part of the bbq conversations with house prices - who's your isp - what download experiences are you getting - 2 months talking to people - the b word is the lightning rod for opinion about telecom - those feelings are those of frustration - recent coverage given by consumers institution and something he's absolutely focused on rectifying over coming year - key challenges are human challenges, not technical ones - certain they'll serve NZ, customers, share holders if we can make cultural shift towards customers first - getting customer services right, includes wholesale and retail ones - but back to the technical - not just NZ having conversations - around the world, there's a consensus, that access is an important part of econmic development and growth - technology must be designed with people in mind - objectives are pretty straightfowrad, want nz to have broadband offering real value, and telecom is a huge 20K kilometers of fibre, rolled out fast ADSL 2+ in Chch, Wellington, Auckland, Dunedin - recognizes despite that, many people see us on the back foot - what to do? - declared our undertakings on operational separation - at least half our customers will get 20MB/s - already half way there to our new customers to new areas, delivering better services to customers, should notice a *huge* difference - release of plans caused commentators to admit surprise and dismay - have been transparent and open about the plans - accusations of hiding information is unfair - need to keep doing it, if we're going to build the trust - proactively suggesting further wholesale unbundling on ADSL products - 3600 cabinets installed by 2010. - telecom's investment is going up by 40% as a result of the operational separation - have we under invested? telecom's sits there square in the middle in world terms - it is world class network, in terms of regulatory certainly, reach and capacity - should think ourselves getting on the front foot, shouldn't be quite so envious of other countries - this is not fibre to support ADSL technology, it's future proof, including VDSL - look across the world, who else is doing it? verison, deutche telecom, but really these efforts only include large densely selected areas of population - often public moneys involved - committment reaching all of NZ without assistance of a regulatory sweetener - acknowledge role with Cunliffe as regulatory process continues - have good understanding, and share passion for getting better faster broadband out there, and this plan goes a long way towards it - what about the remaining areas, will they have to get 2nd class experience. telecom will continue to invest in rural areas, and will not be a 2nd class cliff - challenge is significant, don't under estimate, but insoluable, committed to working with government and communities - has alreayd worked in NZ, west coast development trust - need to encourage NZers to embrace broadband - why aren't we turning on? - price or cost? - ranks 7th in the world in terms of pricing, which is quite surprising given the small scale - reflection of poor service? could be part of it, and determined to get to the bottom of it - total online retail spending, is less than half a percent of retail - scale and distance should be a big incentive - suggest we're missing opportunities - generation Y was interesting, they didn't talk about technology, but confidence to use it, use what's there, and that's a big message. Rod Drury - great to live in NZ - concerned about kids, school and health - how do we connect ourselves to the rest of the world - take great schools, and core competitive advantage, and tight networks, and abilities to create multi-skilled, talented teams - infrastructure is a barrier - opportunity is there to get rid of tyranny of distance - how can we get together, do a step change, connect to the rest of the world, so they everyone can earn export revenue and drag it back - dream, open access network - don't care about cost of bandwidth - activities we do are for applications and content, drag that money back - whether the state should own the network, has learned lots since he wrote that paper - public good for broadband, cannot be monetized by a single company - market gives us the situations we see now, great opportunity to change that so it's good for carriers, whatever we do still works and business models for those types of companies - create environment to give us opportunity to connect to the rest of the world - not about operational separation, but separating at the funding layer - worked out over 12 months, the investment and infrastructure is different from the retail layer - government can step in - need to drive infrastructure layer to cost plus model, just trying to get broadband out as fast as possible - shouldn't be too expensive compared to what's transacted over our networks - have freedom to connect cities, and free up the carriers to really start innovating on top of that stack Williamson, opposition on telecommunications - not here to announce policies - going to do in 5 minutes, is try and traverse where our thinking is and where we might take things for a policy for the election - although this conference is coving a whole range of issues, the only issue i want to talk about is connectivity - how do we get really, really high speed broadband to as many people as possible in a short time - need to look at overseas models, and see if it's appropriate here - too often quoting korea, just having a network that 64% of the traffic is pornography - oops, talked about penetration, audience laughing - no one is arguing what the massive gains to the gdp is to our economy, the investment for fibre pails to insignificancea - worthwhile a direction on high to all government entities, they should be making their land available for fibre installation, or every new house installation having a new fibre installation - thanks to david cunliffe for letting him participate Chignell - 4 messages - modification of what vodafone has been saying for a while, the future is mobile - the big part of broadband future is wireless - shouldn't be ignored, 3G platform is the right platform for the future - fibre is not just an access issue - vodafone don't have a mobile network, have a fixed network of cell sites, with a lot of concrete, and linked together with a transmission network - customers are networked, not us - need a lot of capacity to link us, and growing - over 50% of transmission are service use and microwave, not going to hack it in the future, need fibre - what is the role of government - encouraged by words from cunliffe - care needs to be taken into how that is structured, so it gets the most out of tax-paid and private funding - let's get positive - key concern is glass half empty, without recognizing what we've achieved - need to create ongoing dialog, where we can grapple the issues and plan for the future - anyone looking in on NZ could be forgiven for concluding there's some sort of squabble going on, can't be the solution for the future, need to find a way of working together - align objectives and resources, collaborate, and in the industry we need to compete for benefit of the customers Freeth - 3 components, connection, content and confidence - economic transformation - over past 2 years, focus of stakeholder community has been on the connection piece - now time to move on from this one (though not suggesting all issues have been solved) - need to consider what we'll do with a connected economy - while content is important, confidence is a given, telstraclear would like to add the C of 'creation' - if you're serious about ICT productivity, then world class infrastructure is a given, big supporters - continuing a theme, broadband connections do not create innovation productive workplaces, content and confidence helps obviously - no point in creating a business model for nz if it can't hack it on a global basis - connection is means to an end questions - greater use of government funding around the network reynolds: lots that can be done, doesn't want to create a dependency subject, but undoubtedly big investment areas where a stand alone business case doesn't work, would certainly be open to partnerships on this freeth: question of balance, lots of opportunity for partnerships, recognition on both sides about the types of objectives. - how would you assess the opportunities for NZ drury: completely frictionless. could at having great ideas, but those ideas coming from the type of environment you have. if you have bandwidth constrained, you'll come up with ideas based on that. all we need is pipes. - given nz's small scale and low population densities, is it reasonable to benchmark with other countries on different scales? freeth: very, very diverse in NZ. is a real challenge. australia has an even worse challenge. government has a real roll in solving that problem. williamsen: we're not that bad. very comperable for first 50% of population, exactly that of the UK. big myth we're sparsely populated. - last mile, your sense of priorities and where in the overall plan should the focus should be reynolds: all of them play a part in the great customer experience. from telecom's point of view, we'll be looking at the international backhaul. over variability of broadband, investment will address that quality. when we get fibre into the streets, there's lots of technologies that can connect to that, including mobile. plan to be enabling infrastructure for this. drury: so much focus on inside NZ. far far more important to focus on connection from us and the rest of the world - national parties commitment to broadband, how much of a priority is it williamsen: thinks broadband is huge, roading network of the 21st century. really vital for whole economy and gains. if we were rolling out a roading network to be 3km from your house, and you do the last mile with a dirt track, or can we go for broke and get high connectivity. need to figure out the costs vs the time to market. - how do you balance share holder interests compared to national interests reynolds: getting a return is most important for shareholders. customers satisfaction is crucial, getting things right first time, good experience, and will encourage more NZ to buy broadband products, cut costs of operation, and that's good for shareholders. there are scale issues for NZ, undeniable, but too many directly competiting infrastructures could be a crazy thing. would be great if industry could get together to share infrastructure. need to get act together to deal with things by collaborating with others. - where things are going to be in 5 or 10 years drury: supporting billion dollar companies from the beach chigwell: similar, relatively par or better to what we're seeing elsewhere around the world, and economy has real value, and gives us enough headroom to deal with other issues williamsen: if we can leapfrog this. if we carry out incremental, we'll get better but we'll have other companies doing better still. will be world class economy if you get it done fast, and not lose best and brightest. rather than what we're doing previously, who can we leapfrog to be way up faster in the table (public or private sector) to see us doing what rod says freeth: would like to see the next facebook happening in NZ reynolds: would like to see this conference not being necessary Chris Anderson (Long Tail, Wired) - try and do 2 things - figure out what the Long Tail is all about, and extend it how to how it might apply to NZ and globalization, using the technology we write about in the magazine - Long Tail (published by Disney, lives entirely in the blockbuster industry) - phenomenon he didn't invent - difference betweeen 20th and 21st century economy and markets - 21st century was first where technology dictated culture - mass media technologies, more is better! - can reach a million or ten million people for the price of one, never been a technology like that previously - that century is now coming to an end, monopoly of mass media is starting to be challenged by choice and variety - newspapers, television and record industry are in decline, dominant players are losing choice, internet is the obvious market place of infinite choice - hits vs a million niches - 20th century markets, shows regular curve - this is the wrong shape, averages don't matter - when you have averages, you lose richness of specific culture - parallel curve is shape of 21st century - turns out it's the shape of the 19th century (paretto curve), 80% of the wealth was held by 20% of the population, similar to land. considered unfair. socialism and communism was created to flatten this out, and radical inequality. not an artifact of bad form, but natural of human affairs, and network effects lead to this type of distribution - in traditional markets, there are limited shelf space (eg. so many channels, or so much space on shelves in supermarkets). there's a rent on that space, and only products that make it onto that shelf are those that sell the most. dominated by best selling products. hits crowd out everything else. now we can choose from *everything* and measure what people really want - research is measure the size of the tail. how much did we get wrong. what were we missing because we couldn't sell it before. - talked about music distribution, and the quantity of music not available in stores - products that never even made it to the shelf - people move away from the fits all, and one size fits one, because they now have that opportunity - success of ebay is all about the long tail phenonmenon - busch/anheiser beer company got 'long tail' set of beers. bland because they're mass produced. what happened since then is that their invatory is increasing. micro beers and craft beers are now part of their selection. - now doubling amount of products, room for other things. we have longer tail, and seeing it outside the internet. - similar story for coffee and starbucks - thinks chocolate is going to be the next coffee - what we're finding is that more is different, discovering more choice eg. zappos and vegetarian shoes - people are willing to pay the most, their interests are the deepest, and hence more people are focusing on producing niche marketing - Google's the ultimate long tail company (advertising, media, advertizers) - ultimate aggregator of niches - monetize all those niches by creating small advertising model for small to meet small - now major media companies are now in the tail, they are the niche - is the world spikey? - cities have unbeatable opportunities because of wealth and culture. wrong. the internet is the great leveller, because there's a market place for people with low barriers to entry, and low search cost. can find people with talent. - showing google's search for the best programmers in the world distribution (is this google summer of code?) - find best programmers in the world - how many of them are not in silicon valley - whoops, nz isn't on the map - google's campus isn't necessarily full of people from harvard or mit - you can get noticed easily with the internet - ryanair effect - revolution in air travel - low cost carrier, radically reshaped, taking tourism to other smaller cities. new tourists (low cost) and new destinations - latino culture - not always concentrated in a single place to justify mass media, so internet addresses this, optimized for distributed audiences. most audiences are distributed. - cricket - main stream in NZ, not in the USA - there are 25 million Indianas in USA. How large is the cricket diaspora? perfect opportunity to distribute that doesn't involved a concentrated approach - going to change our culture, and google generation is leading towards. - blog: thelongtail.com - tourism, travel and longtail places - questions - can these work hand in hand? - it's not the end of the hit, but it's the end of the monopoly - in block buster industry, fellow industry people are losing share, now having to fight complete amateurs, won't launch anything unless there's an audience of a million. what will happen is that we'll have to share the market. there's going to be a micro-hits business we'll have to share with - authenticity, converse division of nike, would need to be very authentic being from NZ, how much is this an issue in the long tail story? - sits below the traditional economic threshhold of marketing - what you see in social networking or blog level discussion - authenticity is really a question of bottoms up versus top down. how do you promote yourself without being seen to promote yourself. advertising is suspect. how do institutions cloak themselves as individuals - microsoft is doing this with 4500 bloggers. from a country perspective, i don't think you have a problem. i think you're authentically in the long tail, don't have biases already. Sam Morgan, Trademe, a NZ longtail business - prepare programmes before he prepares slides, not much connection - business divide into 2 broad groups - businesses where internet is really important - businesses *is* our business - introduction into trademe - 400,000 people per day for about 30 minutes a day - #1 cause of work procrastination, and replaced by facebook and youtube - 2 million registered customers, 1 million have bid or listed within the last 12 months - belief in how we did this was based on word of mouth, if you build a good product, people will tell your friends - have bribed all black captains (umanga) - people doing crazy things, found a pebble on a beach, and looked like the virgin mary, and sold it for about 30,000 dollars. tried to hold out and hasn't been able to sell it at all! - 1.5 billion pages per month, 1000 databases - biggest day is monday or tuesday, lunch hour is big, 3:30 gets better, tv news doesn't help us, then desperate housewives - sunny weather bad, all blacks loss good - 2007 we will sell $500 million worth of stuff (excluding houses and vehicles), median sale value is $15 - created 3000+ small businesses (shows pictures of warehouse, doesn't have a shop front, sells through trademe) - secrets to success - keep site up - make it fast (on modem) - make it easy to use - respect customers - design for women - funny diagram of people wakling through a shop (women vs men) - women wander through each aisle, men go get what they want - people send money to people they have never mt for goods they have never seen - trust, until proven otherwise in NZ, a lot of the world doesn't have - working with the government - protecting the consumers - auctioneers act revised in 1928, don't have to be registered auctioneer - lot of legislation which predates this technology - 157 contacts from government in the last few months about sales - sale of medicines, animals, lasers, pepper spray, homekill meat - how do we deal with this? - have team working on trust and safey issues, but can't have them looking at 1000's of lists each day - need to get help from people to report issues - where things get to if you're silly enough to list things on trademe - guy jailed for 12 months for selling laptops he didn't have. after he visited asia, we caught him at customs, having worked with various government agencies - sam is registered car salesman because of their vehicle site, keen to avoid because it's embarassing to talk about - recent regulations impacting us - spam - ticket scalping - fuel efficiency labeling - art re-sale royalties - emissions trading (options with carbon credits) - copyright amendment - good consumer laws are - intuitive, workable, globally aware, enforced - building global internet businesses - 25% of all media time is the internet - lean forward, slouch back worlds (digital divide) - 1967 - if you're born since 1967 you're a gen Y, if you're born before that, you're learning a new thing - before 1967, nzherald, google, amazon - after, facebook, digg, wikipedia, twiter, ... - before 1967, broadcast to me (adsl is good) - after 1967, let me participate (adsl not so good) - 3 companies that aren't the bebos and the facebook, who he's investor and on the board - sonar6, xero, insight fleet pro - connectivity, business models, design and usability, trust - important issues in creating businesses - world is your market - findsomeone, launched in canada, uk and australia - generated multi-million dollar busineses, and using google to buy 'dating' and a few other words paid $1 per click, and could afford it at $2 per click, we were under water - the world is your competition! - spotting those gaps is important, but having business model is too - design and usability - NZ have empathy with other cultures, place for us to compete - digital strategy - security digital trade routes - get external bandwidth so we don't have to travel - protect consumers - consider how broader regulations and impact on e-business - helping to influence, who haven't thought about the internet - businesses should engage Andy Lark (The Exponential Era) - senior VP marketing role at Dell - huge fan of and supporter of what people do in New Zealand - being on the Beachhead board in the US - thrilled to have better technology than Rod Drury has got - future of digital in NZ, no better to do it than being in Austin - speaking as a NZer, got to be careful that he doesn't pitch the corporate gig - 500,000 new people join the internet every day - not coming online in NZ or US, but Asia - seeing a huge surge in application, computer and bandwidth resourcing - suddenly the likes of Xero or TradeMe are looking interesting - just starting to understand the future of the web - shows gartner slide 'Internet coming of age', we're in between slope of enlightenment and plateau of productivity - if you look at that economy, every second - 4 babies born - 3 DSL subscribers - 1,157 videos viewed on YouTube - 23 new domains registered - 7 PC's sold - optical capcity is tripling every 6 mths and is expected to do so for the next 20 years - what you to connect for free - huge shift in social patterns - tipping point from desktop to the laptop - 47 million laptops shipped last year - network device explosion - the number of text messages sent and received - 2.7 billion google searches each month - new agents of influence, giving advice about products and services - 106 million users for myspace - if that were a country, it would be the 11th in the world - significant downside - as bandwidth grows, devices proliferate, access decreases, we now have shorter attention spans, and proactively avoiding ads - network effects making it harder to do business - the end is near - you (we) have a limited window in which to act! - can't keep up with the costs of managing on-line - what can we do to take advantage? - led to a few questions - how do we build X to be digital by design? - is bandwidth really the challenge? - infinite demand on power - business will spend more on energy than on hardware - digital data explosion, 6 fold increase in digital date in four years - ability to produce a population that can efficiently use the bandwidth that is being created - creating prof sevices jobs at a 5:1 ratio to engineers - cannot export or import jobs at a sufficient rate - we need to change the way we think in the digital era - quite unique to NZ - other countries are outputting at a greater rate - 4 rules for exponential enterprises - start upstairs (it's a 3lb problem) - need to change how we think about the web - timeshift, and placeshift - world is moving at a pace that is significantly faster than the the world of the 1st generation of internet - live and active 24/7, on demand - focus - focus on hard on new business fundamentals - very few that have comprehended search - if digital trade routes are the future, search engine opimization automates navigation - converse - how to engage in conversations with customers on-line - birth of the web is the printing press of the masses, and occured in the last year and a half (rupert murdock) - figure out how to get people talking about you - dell's ideastorm - customers post ideas, and other customers get to vote for it - pre-install linux on notebook computers (ubuntu) - parting shots - period of really radical and structural change, and reinvention of the web - will be interesting to see the analysis from australia, and see what effect google had on that election - we must build a new digital generation for exponential economies - absolutely believe that the future of computing is going to be green - all about adaptation - ever notice that 'what the hell' is always the right decision (Marilyn Monroe) - questions - could you suggest a few ways we might stimulate that sort of concept and digital by design - spend more time with the people who are doing it, listen to them explaining what it is - need to show more passion about teaching them fundamental IT skills - is there something about those people that is a particular character or mindset that only attracts a relatively narrow set of people, or is there a more hopeful view that the way the technology is developing it becomes more fun to be in that environment - nothing genetic there. huge amount has to do with your role models and who you interact with at an early stage. by default that directs you and the more role models you have (sam and others), the more people that will go to it. - so many of those skills don't need to be acquired in new zealand - remove frustrating barriers - company culture - 10 or 12 years between stints at dell when you left, it was going well, when you left it was falling like a stick - intriguing thing, dell is growing organically the rate it is, very few companies have done that (5 other companies) - taking the original business model and taking it in a whole new place - you push the model right to the edge before you go off and do something else. maintained that core focus right up to the point until they need to change step. - you think it's a real possibility to do it the other way, and make it continuous? - every business hits a wall at some point, big or small. great skill of any business is climb the wall and get to the next level. it's also about foresight, and leading indicators, and ability to build really strong metrics into the business. 1 and a half billion dollars on global marketing. need a new model. first reaction is creative work, our reaction is 'who can deliver the best data, and best tools' Darryn Melrose, CEO AIM Proximity (Wake up, or die) - the world has moved on - direct and interactive agency (air nz, warehouse, ...) - change has happened - we are behind, shows charter on broadband subscriber rate - 3 stages of development - information wave - distribution wave (skype, ebay) - networking wave (youtube, facebook) - stuck in the old mindset within the information wave - why? - myths caused by isolution - nothing has changed in 7 years - competitors aren't doing it either - the business case doesn't stack up - stay in dial up mentality - why does speed matter - if you want to download DVD quality video clips - 8 seconds vs 1 hour, fundamentally changes this all already - major trends that change behavior - always on - time shifting - pause live TV, podcasting, rss feeds - place shifting - virtual living - secondlife - self expression - blogs, media consumers become media producers - new ways to do it - cosumers - all consumer driven - the production society -> the retail society -> the communication society - emerging consumer - internet has always been there - new attitudes and expectations - control - in terms of choice, myspace isn't your space - personalization - a little bit of customization, but creating your own identity - now - people are less patient - 20% of argos, uk based retailer, sales are on-line - listened to - partipication age, people choosing what they want and giving feedback of what they want - self-expresion - bad to ban facebook, because you're hindering people from learning and interacting about these social sites - 10 times more effective by creating a facebook group - the challenge - it's not just about what we do, but it's also how we do it - tourism new zealand, but nz standards it's a good site - compare it to a city, stockholm (shows video from their tourism site - musical, all major words sound the same, blonde, flirt, drink, bed!) - tell me and i'll forget, show me and i'll remember Donald Clark, Carl Penwarden, John O'Donoghue, National Broadband Map - demand aggregation to promote investment in new high speed infrastructure - why - access to high quality broadband a key enabler of the governments economic transformation agneda, and a significant contributor to achieving environment benefits - what - online map (beta) providing a comprehsneive view of geographic demand for service and supply infomration where available - www.digitalstrategy.govt.nz/broadbandmap - using technology from projectX from zoomin - interactive, zooming into nelson area - can toggle gornment, local government, education, health, business along with various networks (telecom in yellow, telstraclear in green, and broadband challenge in purple) - gaps between demand and what's currently being supplied - provide capability to interact could also apply to private sector, and residence (not mapped, but consolidated as a mesh box) - one challenge is the interaction required - where is my fibre to the home - danger in the incremental approach - maintaining that high level ambition is important - how does my business case get better? - demand aggregation continuum centralized purchasing | co-ordinated purcash | common framework for purchasing | devolved purchasing - objectives - stimulate efficient investment in new high speed broadbadn network infrastructure benefiting government and community - get a greater degree of alignment across the sector - overarching principles - not tieing agencies - can diverge from this framework, but you should be able to support those decisions - 9 technical principles - open access networks will be preferable - won't be able to bundle higher level services with what's essentially an ethernet service - if service provider is out there, framework says that's fine, but you can take them, but you can't do so for longer than 12 months - open and seamless connection across all networks - impacts for network providers (velocity networks, hamilton) - mapping - reduce uncertainty around potential customers - supply side mapping designing cost effective solutions - provides opportunity for collaboration between infrastructure providers - common framework - simplify and standardize product offerings and commercial interfaces - combined benefits - improves investment buisness cases - help to transform marginal connections into justifiable investments - combination of frameowkr and mapping could allow faster deliver of solutions to end user - questions - how to you preserve data integrity? - will be a confirmation email service - how has this technology been for velocity - going to make us a lot more efficient rather than a map and pins on the wall - new tool, if we had it in our early days, we could have spent a lot less effort during our early plans - is it just a question of finding people to collaborate to fill the loops - need the world to collaborate, and doing it with several infrastructure providers - obviously the common framework will give us the product/tool set we can sell - if we can speak with schools collectively, that will be of great benefit Laurence Miller, Govt2.0 - deputy state services commission - covering his main role in the commission - leadership and use of ICT across state services - show screenshots of the government portal in 1998 and 1999 - fast forward a couple of years to MED in 2000 (improving, but still in the information provision) - department of internal affairs (looks like tombstone) - in 2007, where we are now - inland revenue site, how many people have transacted online? tax returns, gst, forms, calculators, etc.. - snapshot from teara.govt.nz, online encylopedia, starting to get to narrow casting, and the long tail - police act review wiki - reached more people than ever before, and has been very effecitive - new zealand government portal as it will be in march 2008 - looks new and refreshed. - interesting, has tag clouds, popular links - key to this is the search facility, uses industry standard search, public index, displaying results how people would like to see them and getting consistent results across government sites - another example is road safety forum - opening up to the community - no longer government talking to the people, but creating a dialog and listening - kiwipedia, young graduate - before joining, he went to wikipedia to find out some information - he still joined, and at the end of his first week, he decided to put an entry on wikipedia - filled everyone with fear, but made us realize that getting out there, and puting information out there is a very important part of 2.0 - june 2010 milestone - governament shared infrastructure is used to deliver user centered services and support joint results - can nz'ers get the results from a single coordinated government entity - can they get the services by operating across multiple changes - will nz be able to give information once, and government works out how best to use that in order to meet the needs of the people - questions - when can we vote online? - local elections vs national elections turnout seems to be ritualistic about going down to the voting booth - plea for ombudsman - the digital strategy draft will be launched in march as a wiki - is it truly government 2.0, or internet overlay over a klunky government? - takes a long time to change cultures and behaviors sense an excitement and interest in terms of using 2.0 technologies to have the sorts of conversations we're looking for designing policies etc.. probably looks faster to us on the inside, but part of the nature of government Greg Carlyon, Horizons District Council - heard some a variety of cultures, now looking much smaller - live up the road from Marton on state highway 1 - excited about cabinetization, and talking about it to our community - thinking about green dreams and actual reality - welcome to the youngest country on earth - 2nd largest area in the north island, 220,000 people - talking about areas - waterways, mountains, lakes, rivers, .. with the 100% marketing vs what the reality is beautiful rivers, but suffering from too many artificial nutrients, maori houses vs maori caravans with no broadband - keep challenging these issues - the big green rig is heading your way - focus on 4 things - rising water demand - biodiversity loss - poor water quality - land erosion - have had extensive funding support from the government - chrome wheel nuts and a barbeque - lots of hands on exhibitions and technology eg. virtual fly thrus - try living in a grey zone (no coverage) - launched in May, got about 10% of our community through there - need to leave that vehicle having encountered a challenge and accepted it - digital divide between our community and the people making the decisions - need to be pretty philosophical to accept change