Industry should define ICT strategy, says Blackham

Xsol's John Blackham proposes cooperative strategy body, funded by government in a similar way to how Federated Farmers is funded

Xsol chief John Blackham believes government ICT strategy should be decided by a body drawn half from government and half from the industry.

Allowing strategy to be mainly developed by government officials and the Ministry of Economic Development — a policy department — results in the industry’s position being distorted, says Blackham. Whatever ICT experts tell government officials, it always comes out looking very different in the eventual report, he says.

Blackham was enlarging on the point — made at a recent NZ stock exchange (NZX) seminar — that the government’s support of the industry is unsatisfactory, despite ICT being, supposedly, one of the three great hopes for the economy.

He has a vision of a productive partnership, which would see government identify economic problems — such as our lack of productivity — and then ask ICT for proposals on how to solve the problems and improve the nation’s economic performance.

“[But] government needs to take the initiative, says Blackham — “not just to say ‘productivity is bad’ but to lay down a challenge to the ICT industry to help improve it.”

He proposes this cooperative strategy body be funded by government in a similar way to how Federated Farmers is funded. Government representatives are interested in such a body as it would give them a single point of contact, says Blackham. But they want industry bodies like ICT-NZ to meet the cost of setting up a central ICT body, by asking companies and individuals for a joining fee.

The time is ripe to push for such body, as the government-organised Digital Summit is coming up at the end of this month, says Blackham.

The industry should go now to the government now and say: “We can help you with your strategy,” he says.

“If we do this in the run-up to the election, we can get more traction for ICT than we’ve ever had before,” says Blackham.

“I hope, between now and then, there will be some crystallisation of focal points. I want to see the government put out initiatives that the industry can get its teeth into — and the venture capitalists can come in behind.”

Blackham acknowledges there is government funding for ICT research and development. But the results are not evaluated properly, in terms of how they stimulate the economy, he says. An example is the “Technology for Business Growth” scheme, which veers towards what’s called “research stretch” — this means unfamiliar territory, rather than areas where the advantages, and the likelihood of success, are better mapped out.

Perhaps the better-funded industries could come to the party, says Blackham. For example, the government could pay for the farming sector to hire ICT experts. This could even be on a results basis. “The agreement would be: ‘We can improve your productivity by 10% and if we don’t we don’t want paying.’ ”

Some ICT companies would cheerfully take on such a challenge, says Blackham. He says he agrees with Rod Drury, CEO of tech start-up Xero, who criticised US investment adviser Ken Bender at the aforementioned NZX seminar, saying the American didn’t understand how the NZ market was structured.

The venture capital scenario he painted is more appropriate to the US, says Blackham. There, start-ups are so numerous they can be “strip-mined” for the successful few. Our industry is smaller and such a model isn’t applicable.

Praising Drury’s presentation skills, Blackham says he is probably the local industry’s most effective champion. “Xero just has to succeed. If it doesn’t, it will cast a pall over the industry.”

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