Categories
productivity

Tech productivity meets Rugby World Cup streaming

New Zealand’s Productivity Commission plays down the threat to jobs from technology.

Instead, it says we need more technology to power higher productivity growth. It says this, in turn, will lead to higher income growth and the money need to pay for the things we value.

The Productivity Commission’s draft report New Zealand, technology and productivity says the available data indicates widespread jobs market disruption won’t happen any time soon.

Productivity outlook uncertain

The commission points out the future of work is not certain. It says: “There will undoubtedly be change over the next 10 to 15 years, but not at unprecedented levels”.

In other words, that’s the foreseeable future.

The Productivity Commission’s press release hints at one of the great mysteries of modern times: We’ve been using computers in business for more than 50 years. Yet the dial doesn’t seem to move much on productivity. It certainly hasn’t moved as much as the marketing and hype from technology companies suggests.

In the inquiry director Judy Kavanagh’s words: “If the rate of technological change was accelerating, you’d expect to see evidence in the official statistics, such as faster productivity growth, more business start-ups and more jobs being created and destroyed.

“But what we see in New Zealand and across the developed world is the opposite.”

Positive effects

The commission is right when it says technology mainly has a positive effect on jobs and work.

Think of, say, dishwashers. These machines let people spend less time with their hands in a sink full of plates and greasy water.

Someone has to make, distribute and sell then install dishwashers. They generally require regular servicing. These jobs are all better quality, better-paid jobs than minimum wage dishwashing.

And, let’s face it, a lot of that dishwashing was unpaid domestic work.

There’s also an industry supplying dishwasher detergent and rinsing agents.

Instead of spending time dishwashing, people can cook more elaborate meals. They can spend their time on other more productive tasks. Instead of domestic drudgery, people could get jobs.

If you look only at dishwashing, the sum of created jobs might be negative. Yet by displacing a menial task, other more productive opportunities open up.

This, in a nutshell, is why technology can displace jobs, but it can also often create as many or even more than it destroys.

We do a poor job

Back at the Productivity Commission Kavanagh says: “Technological change may pick up in the future but even so, it will take time to diffuse and affect work in New Zealand. We do a poor job of picking up technology quickly.”

You don’t need to look far to understand the truth of this statement.

Anyone who has been following the fuss about people adapting to watching the 2019 Rugby World Cup on streaming digital services instead of satellite TV can see this is on the money.

About half the population is ready to stream, close to half the population is pulling their hair out in frustration coming to terms with what is, in reality, a very simple switch from one medium to another.

Education is critical here. So is experience.

Rugby World Cup, productivity

Anyone who has spent the last decade or two using questionable services to download music and videos and then moved on to Netflix would find streaming Rugby World Cup games to be trivial.

Yet for people who have never seen BitTorrent, Chromecast or Apple TV, it can be a challenge.

There’s a clear link between the challenges Spark faces with domestic entertainment technology adoption and people at the sharp end of our economic extracting value from business technology.

Watching how this plays out with the Rugby World Cup could give us some clues about how to better leverage computers, broadband and other tools that can improve productivity.

Categories
computing

Crypto-currencies, tulips, market bubbles

Frances Coppola writes about financial bubbles. She says the market for crypto-currencies shares characteristics with earlier bubbles like Dutch tulips and dotcom stocks. Which means a crash is underway. That’s not just Bitcoin, but all of the crypto-currencies.

The remarkable aspect of this is that everyone couldn’t see it coming. As Coppola points out some investors still don’t accept the likelihood of a crash.

It will be interesting to see what remains after things settle down. The idea of a blockchain isn’t going away, but the, at times irrational, enthusiasm  for crypto-currency could be coming to an end.

Categories
computing

Xero joins Silicon Valley elite as TCV invests

Xero has moved one step closer to becoming New Zealand’s first global technology giant.

Last week TCV, a Silicon Valley investment firm, bought 1.4 million Xero shares from Matrix Capital Management. The deal was worth NZ$28.5 million. That’s a little over one percent of the company.

Few people in New Zealand will have heard of TCV. Most New Zealanders will have heard of the company’s other investments. TCV owns equity in, among others, Airbnb, Facebook and Netflix.

Xero a name in Silicon Valley

Technology Crossover Ventures is based in Palo Alto, California, the epicentre of Silicon Valley.

Matrix reduced its holding in Xero from almost 10 percent of the company to around 8.5 percent.

The share transfer may not be a big deal in Silicon Vally terms or even in TCV terms. The business has close to US$10 billion invested in technology companies. The investment is from a TCV fund that focuses on mature firms that already have an impressive track record.

Yet it is significant for Xero, although not in financial terms. It’s an important vote of confidence marking Xero’s arrival in the technology premier league. That’s something no New Zealand company has managed before now.

Disruptor

The cloud accounting software company has disrupted global markets. Xero made the world sit up and look at New Zealand technology.

While Xero’s share price has fallen back from the mid-2014 high point, it has performed well so far in 2017. The price is up almost 15 percent since Christmas. In mid-December it traded at NZ$17.50, today, at the time of writing, it is NZ20.50. That’s the highest point for the company’s shares since November 2015.

Like many fast growing technology companies the business has yet to turn a profit. Although that day is now getting closer. At a recent company update founder Rod Drury said the business will soon be cashflow positive.

It continues to show strong growth in revenue. What’s more subscriber numbers continue to climb. This is a vital metric for a software-as-a-service business. At the end of March it hit the milestone of one million subscribers.

Categories
computing

Don Christie says global IT giants all take, no give with New Zealand

Don Christie writes in the New Zealand Herald Global IT companies are taking profit here and putting nothing back:

An organisation I co-chair, NZRise, has been looking at the problem. We represent New Zealand owned digital companies who generate jobs and good incomes for tens of thousands of Kiwis. Our research shows Facebook, Google, Amazon and many other global digital companies are engaged in similar tax avoidance schemes to Apple.

Most revenues that accrue to those companies from New Zealand simply don’t get reported. They are the result of an online transaction and the money flies out of the country in the blink of an eye. No tax. No multiplier effect. No 41 per cent investment into our society.

From a business owner’s perspective it also represents a huge disincentive to invest in R&D, which is already at shockingly low levels by international standards. We find ourselves at a disadvantage to our multinational competitors.

Why create software and technical services in New Zealand when we will always be facing uneven tax playing field?

New Zealand has had a problem with multinational companies and transfer pricing for decades.

Yet the problem Christie writes about is on a different scale.

While the old multinational would shuffle money to minimise liabilities in New Zealand, they still paid some tax. They employed people, trained people and contributed to the economy in other ways. They funded university chairs, sports clubs and other worthy causes. If the new breed does any of that, it’s invisible.

Little contribution

The new multinationals pay next to no tax. They employ next to no New Zealanders. They contribute little to the economy.

Sure, you can argue that Apple products make New Zealanders more productive and that’s a positive economic contribution. The net positive economic contribution may even be greater than Apple fails to contribute in more direct ways.

That is an argument against banning or boycotting Apple products. No-one is suggesting that.

It is not an argument against taxing Apple.

After all, our roads carry Apple products to market. Our schools give people the skills people need to use Apple products. Our health system keeps Apple’s customers alive and healthy. In some cases our tax dollars buy Apple products.

Google this!

You could argue something similar about Google. Some believe Google software makes workers more productive than they would be with other software. Maybe.

Some think that Google’s activities in the advertising sector has an economic benefit. Try saying that to a New Zealand journalist or someone who works in the media.

Again, these are not arguments against taxing Google.

Google is quite happy to sell its products and services to New Zealand government departments that it doesn’t help fund.

It’s harder to argue Facebook offers any economic benefits to New Zealand. If anything it undermines productivity. It is the digital equivalent of an all-sugar diet.

Christie has a good point

There’s little change Apple, Facebook and Google will stop selling in New Zealand if we force them to pull their economic weight.

Until recently the problem was limited. Most of the non-contributors were technology companies. That’s changing with services like Uber muscling in on our markets. If things continue our economy will be hollowed out. Let’s not allow that to happen.

It’s been said that what the companies do is legal. That’s true. It doesn’t make it right. We have the power to change that. We have left this problem in the too hard basket for too long.

Categories
write

PressPatron: Now you can support my site

You may have spotted the PressPatron banner at the top of this page. It invites you to be a supporter. There’s also a button to the right of this text.

They are both part of my PressPatron campaign. It’s a new way of crowd-funding websites.

I’m one of the first journalist-bloggers in New Zealand to use PressPatron. That puts me in good company. Russell Brown at Public Address got there first. Brown’s campaign has been running for about a month.

PressPatron is new, so there may be bugs in the system. Please be patient.

Soon you’ll see PressPatron banners in a lot more places.

Newsroom and Scoop are onboard. So is Sciblogs, E-Tangeta and TheatreReview. We’re all small, independent New Zealand online publishers.

What is PressPatron?

PressPatron is a way for readers like you to support the media you use. It is voluntary and painless. You get to set the amount you contribute. You can make a one-off payment or commit to a series of payments over time.

Most of all, PressPatron is not a pay wall. The stories on this site will stay free. You don’t have to pay a cent. The idea is that you’re supporting a website, not buying anything. This is not a new idea. It is a new, better implementation.

For now PressPatron is a New Zealand service. The founder, Alex Clark in Wellington, plans to offer it to overseas publishers. I’ve been talking to Alex about the idea for some time now and feel like I’m on the ground floor of something important.

One of the things I like most is that PressPatron doesn’t get in the way. If you don’t like seeing the banner, you can click it off. The sidebar button will stay, but it’s not offensive or distracting.

What will I do with the PressPatron money?

This site was never designed to by a source of income. It’s not my job. But it does cost money to run and it costs money to cover New Zealand technology.

So my first goal is to collect enough money so this site pays for itself.

Running this site isn’t expensive. There are managed web host fees and a handful of licences and subscriptions for services.

I’m a strong believer in paying people for work. That means paying for things like WordPress plug-ins, even when contributions are voluntary.

Around $500 will cover all my costs.

More, better local technology reporting

Any money I collect over that amount will go towards my journalism expenses. Among other things that means covering conferences and getting to industry events that might not otherwise get the attention they deserve.

InternetNZ’s NetHui is one example.

Open Source Open Society is another candidate. It would be good to get to Multicore World, ITX and the Linux AU conference when it is in New Zealand.

Some Commerce Commission conferences could do with a reporter watching what goes on. I’d also like to get to some out-of-town press conferences.

Tuanz events are useful. In my experience other smaller, narrow focus trade events can be valuable. I learned much from going to ISPANZ a year or so ago.

I’ll use any money raised money to pay for travel, accommodation and meals. Nothing fancy. At this stage PressPatron is not going to provide my income. That will continue to come from paying journalism and writing jobs.

PressPatron goals

  • First I want to make $500 to cover site costs.
  • If I reach a total $1500 I’ll be able to attend two out-of-town conferences that I wouldn’t otherwise get to.
  • A further $1500 means I’ll be able to attend all the big local scheduled events without needing to pick favourites1.
  • Any money raised over $3500 will be spent traveling outside of Auckland to get a wider perspective on technology. It means driving or flying out-of-town to chat to more people, more often.
  • If PressPatron takes off I’d like to spend some money on better photography.

  1. Although that depends on my availability and the amount of paid work I’ve got at the time. Sometimes conferences clash with publishing projects. ↩︎