The mistaken publication of paragraphs from a Cabinet paper has revealed the true thinking behind the sudden demise of struggling industry body ICT-NZ. Paragraphs inadequately deleted from a pdf document and published on the Digital Strategy website show any new umbrella industry body would supercede ICT-NZ.
“Although ICT-NZ was formally established in 2004, it has yet to gain any traction with, or material funding from, key sector players,” the paper notes.
“HiGrowth both funds ICT-NZ directly and diverts other resources to promote the establishment of ICT-NZ,” the paper says and this is debilitating both organisations.
Indirect funding of ICT-NZ has also made it complicated for NZ Trade and Enterprise (NZTE) to administer that funding, the paper says. Because NZTE has no contractual relationship with ICT-NZ, it has to rely on HiGrowth to monitor use of the funding.
“In addition, overlapping membership of the governing bodies of HiGrowth and ICT-NZ has raised the potential for conflict of interest issues to arise,” the paper says.
All of that is in stark contrast to the tone in Communications Minister David Cunliffe's announcement of ICT-NZ's demise.
“Building on the great work of Hi-Growth, ICT-NZ and the Digital Strategy Advisory Group, it is proposed this new advisory body will provide Ministerial advice, provide research and information to the large number of sector groups, and support new digital programmes,” he said last week.
The Cabinet paper makes clear advisers fear a body concerned purely with the fortunes of the ICT industry, would miss out on representing the interests of the broader ICT-using community — an emphasis notable in the digital strategy.
According to the supposedly deleted material, the burden of funding of the new body is to be shared between government and industry with the latter making more of a contribution as time goes on, but government never entirely backing out.
The Cabinet paper suggests the new group would combine some of the functions of the Digital Strategy Advisory Group on the government side and the HiGrowth Trust and the struggling ICT-NZ umbrella group from the industry side.
“Reprioritisation” of existing Crown funding from areas such as HiGrowth and the remaining Broadband Challenge funds will provide $1.45 million during the establishment phase. In addition, a further $1.3 million of new funding will be required.
Government would continue to put $400,000 in for 2010 and future years, with industry contributing $600,000 a year.
The authors of the paper acknowledge that ICT-NZ has been handicapped, as establishment body head Garth Biggs has said, by a lack of clear benefits to its membership.
“‘What’s in it for me?’ … is a perfectly legitimate question and requires an answer,” they write. “However perhaps the question needs to be broadened to the wider community of interest as the benefits of a well-run and cohesive industry body can spin over to government, education, offshore organisations etc. Those relationships in turn can provide significant reciprocal benefit back to the wider industry.”
The paper appends a list of benefits, including a single ministerial interface for the industry, an ongoing input to government strategy, a lobbying channel, co-ordination of government ICT procurement and planning of “strategic research and development”.
Communications minister David Cunliffe says the body should be established next year. At this stage, he says, the shape of the organisation and its relationship with other bodies is not set in stone and will be the subject of further public consultation.
“Ministers are attracted to a body along similar lines to Intellect UK, the trade association for the UK hi-tech sector which most closely follows these functions,” the paper says.
Closely associated with Intellect UK is the Broadband Stakeholder Group — an advocacy and advisory group which focuses on the demand and use of broadband to support industry and communities throughout the UK.
“It is proposed that the new sector entity be modelled on Intellect UK but will be scaled and modified to suit the New Zealand situation.”
Intellect UK coordinates industry growth initiatives in much the same manner as HiGrowth, and also provides advice to government on the broader range of digital issues from an industry perspective.