Category: government

  • China goes on the tech offensive

    China goes on the tech offensive

    The most important economic relationship in today’s economy is that between China and the United States, despite bellicose chest thumping by both sides their wealth and well being of their industries is inextricably linked.

    Against the backdrop of that chest thumping and a slowing Chinese economy, the Chinese and US Presidents are due to meet in two weeks time where trade and security relations between the two countries are at the top of the agenda.

    China’s leaders though plan to emphasise their nation’s tech prowess and its importance to the US’s sector, something the New York Times reports has irritated the Obama administration.

    What would almost further irritate the US leadership is that US tech giants including Apple, Facebook, IBM, Google and Uber have been invited to attend a Chinese tech summit hosted by Microsoft and the PRC President will be dining with Bill Gates before flying to Washington to meet Obama.

    Redmond gets on board

    Microsoft’s role in the China Forum is interesting, the company is extending the hand of friendship not just to nations but also to companies that were fierce rivals in the past, just last week the company announced a partnership with VMWare despite deep rivalry in recent years and CEO Satya Nadella is due to appear at next week’s Salesforce conference.

    Coupled with Microsoft’s battle to keep offshore customers’ email records out of the reach of US legal jurisdiction, it’s clear Microsoft are playing a long global game with their business plans so the support of China’s initiatives isn’t surprising.

    Given China’s strength as an emerging tech powerhouse and its administration’s ambition to move the economy up the value chain, it’s also not a surprise that other US technology companies are reluctant to join the politicians’ games.

    Choosing Seattle

    The choice of Seattle is interesting as well, while the city is a major tech centre with companies like Amazon and Microsoft based there, it’s far more integrated with the Pacific Rim economies than San Francisco and Silicon Valley. Again this is a loud message to the US tech community.

    For China, the success of showing off their technological strengths is an important in sending a message to its East Asian neighbours and the US that the nation is diversifying and shouldn’t be underestimated, a process that Chinese Premier Li described as “a painful and treacherous process” at a World Economic Forum event in Dalian today.

    The meeting between Xi Jinping and Barack Obama in two weeks time, and the associated events in Seattle, could well prove to be the marker of where China moved into the next phase of its economic development and its relationship with the  United States.

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  • Paul Krugman and the era of Bad Ideas

    Paul Krugman and the era of Bad Ideas

    We live in a time where lessons of the past have been unlearned and being right about events does not necessarily mean you will be vindicated, said Nobel Laureate and New York Times writer Paul Krugman in a Festival of Dangerous Ideas event at the Sydney Opera House last night.

    Krugman’s talk was on how bad ideas in economics have taken hold and are difficult to shake, the reason being in his view because, as the economist John Stuart Mill said to Parliament in 1866, “although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative.”

    A refusal to admit errors

    One of the notable aspects of today’s age of bad ideas is how those who proven wrong refuse to admit their errors with Krugman citing the 2010 public letter signed by 23 prominent academics, economists and money managers to Federal Reserve chairman Ben Bernanke warning Quantitative Easing would unleash inflation.

    They were wrong but when 9 of the 23 signatories were interviewed by Bloomberg Business last year, not one of them would admit they were mistaken.

    For Krugman, it seemed hard to hide his exasperation with these people as he explained, “If you took at all seriously what is taught in economic textbooks then where we are is not surprising” and pointed out anyone who had studied the Great Depression and Japan’s lost decades could see how events were going going to transpire.

    Defeating half baked ideologies

    What Krugman didn’t discuss during the session was how did we get to a state where many of our political, business and community leaders outright reject the lessons of history and established knowledge, preferring instead often half baked ideologies.

    A half century ago, things were different. Ayn Rand’s first television interview with Mike Wallace in 1959 illustrates the prevailing mindset among America’s elites. Wallace is taken aback at Ayn Rand’s philosophy of the individual’s desires and needs above all.


    For Wallace’s generation that had been through the Great Depression and World War II, the importance of collective effort in an industrial society were well understood. In just over a decade, the US would successfully put a man on the moon and the rise of Silicon Valley and today’s tech industry were results of that effort.

    Today it’s hard to see that sort of communal effort in the face of self interest and wilful, if often profitable, ignorance. For Krugman, his advice for those wanting to push back against this prevailing attitude is not to be too polite and keep in mind that satire and sarcasm are necessities in today’s world.

    Being an informed citizen

    For those pushing back, facts and research are critical, and Krugman advised one of the audience questioners who was despairing about the quality of information available in the media that the ability to be an informed citizen is greater than ever before.

    Krugman’s talk covered many of the Bad Ideas that have got our economy and institutions to where they are today, the challenge for today’s generations is to overcome the narrow, half baked ideologies that dominate today’s policymaking.

    In a festival that, despite its name, is notable for a lack of truly dangerous ideas, perhaps suggesting those Good Ideas for the next generation would truly be the antidote for the last thirty year’s lazy and shallow thinking.

    Paul attended the Festival of Dangerous Ideas as a guest of Intel Australia.

    Image of Paul Krugman byEd Ritger/The Commonwealth Club of California via Flickr

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  • Does broadband really create an innovative economy?

    Does broadband really create an innovative economy?

    How much does broadband really matter in developing a competitive and innovative modern economy? A corporate lunch with US software company NetApp last week illustrated that there’s more to creating a successful digital society than just rolling out fibre connections.

    Rich Scurfield, NetApp’s Senior Vice President responsible for the Asia-Pacific was outlining the firm’s plans for the Australian market and how it fits into the broader jigsaw puzzle of economies across the region.

    Like many companies in the China market NetApp is finding it hard with Scurfield describing the market as “chaotic”. This isn’t unusual for western technology companies and Apple is one of the few to have had substantial success.

    Across the rest of East Asia, Scurfield sees them ranging as being mature, stable and settled in the cases of Japan, Singapore, Australia and New Zealand through to India where the opportunities and the challenges of connecting a billion people are immense.

    Digital outliers

    The interesting outlier is South Korea, one of the most connected nations in the world, where the promise of ubiquitous broadband isn’t delivering the expected economic benefits to the entire community.

    In theory, South Korea should be seeing a boom in connected small businesses. As Scurfield says, “from a technology providers’ view this connectivity means you could do more things very differently because of the infrastructure that’s available.”

    Global Innovation Rankings

    Korea’s underperformance is illustrated by last year’s Global Innovation Index that saw South Korea coming in at 16th, just ahead of both Australia and New Zealand whose broadband rollouts are nowhere near as advanced as the ROK’s.

    Making a close comparison of Australia and the Republic of Korea’s strengths in the WIPO innovation index, it’s clear the technology and engineering aspects are just part of a far more complex set of factors such as confidence in institutions, the ease of doing business and even freedom of the press.

    Putting those factors together makes a country far more likely to encourage its population to start new innovative businesses that can compete globally. When you have a small group of chaebol dominating the private sector then it’s much harder for new entrants to enter the market – interestingly a private sector dominated by big conglomerates is a problem Australia shares.

    Small business laggards

    NetApp’s Scurfield flagged exactly this problem, “Korea is an interesting market in there’s about six companies that matter and from a competitive view those companies are extremely advanced, they have great technology and great people.”

    “However what’s not happening across the rest of the country is this adoption isn’t bleeding into the broader community,” said Scurfield “Because of that I don’t see broadband connectivity as having a wide impact.”

    That Korean small and medium businesses aren’t using broadband technologies to develop innovative new products and service in one of the most connected economies on earth raises a question about just how effective investment in infrastructure is when it’s faced with cultural barriers.

    Certainly we should be keeping in mind that economic development, global competitiveness and the creation of industry hubs is as much a matter of people, national institutions and culture as it is of technology.

    We shouldn’t lose sight of the importance of our people and institutions when evaluating the strengths and weaknesses of a nation in today’s connected world.

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  • Diversifying South East Queensland

    Diversifying South East Queensland

    Australia is one of the world’s most urbanised countries with the bulk of the nation’s population clustering in half a dozen centres mainly strung along the east coast of the continent.

    The northernmost of Australia’s population centres is South East Queensland, a sprawling collection of suburbs extending from the upper class enclave of Noosa Heads down to the Gold Coast and the New South Wales state border.

    Cisco believe this sprawling region of three million people can become a ‘Smart Region’ with the use of technologies such as intelligent lighting and parking, citizen applications, and smart power metering could add up to 30,000 jobs and $10 billion of value to the community over coming years.

    “The residents of South East Queensland told us they want to experience greater convenience and integration of public transport, greater digital engagement and intimacy in their cities, more reliable local government services, and new digital ways to further reduce the cost of red tape,” said Cisco Australia & New Zealand Vice President Ken Boal in releasing the South East Queensland: A Smart Region report.

    Local civic leaders in the cities making up the South East Queensland conurbation see this as an opportunity to grow their economies.  “The future of cities and regions and their ability to create enduring employment opportunities are entirely linked to their digital capabilities,” says Sunshine Coast Mayor Cr Mark Jamieson while Ipswich Mayor Paul Pisasale said Ipswich was already preparing for a strong future as a digital city.

    “We have recognized that building and taking advantage of digital highways now will set Ipswich on a secure and successful path to capitalise on the ballooning digital economy,” said Cr Pisasale.

    For South East Queensland, the challenge in creating new industries and jobs is becoming acute. The Australian miracle economy has left the region – like most of the nation – hopelessly uncompetitive and the bulk of employment is in domestically facing service industries underpinned by property prices.

    In fact, the residential construction industry has been the mainstay of the SE Queensland economy and the region remains probably the most economically volatile of the Australian conurbations given its high dependence upon the building sector.

    The digital economy does hold out hope for diversifying South East Queensland’s economy from building and domestic tourism, but the work is just beginning. Cisco’s smart region initiative is a first step, but there’s much more work to be done by business and civic leaders.

    Brisbane image, “Brisbane CBDandSB” by Stuart Edwards. – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons – https://commons.wikimedia.org/wiki/File:Brisbane_CBDandSB.jpg#/media/File:Brisbane_CBDandSB.jpg

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  • Engineering for change – the ethics of the new economy

    Engineering for change – the ethics of the new economy

    Technologies like the internet of things, cloud computing, 3D printing and big data are changing our industries and society. At the ACI Connect event today, I gave a presentation on some of the opportunities, risks and ethical issues facing technologists and engineers in the connected economy.

    While many of the engineering principles underlying these technologies aren’t new, their scale and the power they give businesses and governments means there are serious ethical, security and societal issues we have to consider.

    This presentation explores some of those issues and the technologies and trends driving them.

    Entering the Data era

    A conceit among technologists is that we’re in an unprecedented era of change. This is not true.

    The Twentieth Century saw massive restructuring of our society as the telephone, mains electricity, the motor car and television changed our society. Many of today’s settled industries came out of the huge technological steps forward over the last hundred years.

    Just as cheap energy – delivered to us through the motor car and mains electricity – defined the Twentieth Century, this century will be defined by easily accessible and abundant information.

    Those changes over the last hundred years give us some hint as to where we are going; the shifts that saw coal carters, newspaper sellers and night soil men eventually become extinct, along with a shift from a largely agricultural workforce to industrialised employment, is going to be repeated this century as information becomes abundant.

    Harnessing the Internet of bees

    Cheap and small sensors mean it’s easier to put a chip on something. In this case we have a CSIRO project tracking bee activity where Tasmanian scientists have put tracking devices on bees.

    Those tracking devices would have weighed several hundred grams and cost hundreds of dollars ten years ago but today they are small and cheap enough to fit onto the backs of bees.

    Being able to deploy these sensors means we can fit them to things we couldn’t have imagined a few years ago and the data they generate is going to give us insights into patterns and behaviours we couldn’t have contemplated.

    However not all of this data is useful or necessary and some may even be damaging to individuals and groups. One ethical question we have to ask ourselves is whether it is in the community’s interests to collect this information.

    Another aspect of connecting devices, or even animals and people, to the Internet or a network is it opens the possibility of hacking, as we’ve seen in the recent Jeep case where engineers showed they could control a vehicle remotely. The security and privacy aspects of the IoT are critical and something designers and product engineers can’t overlook.

    Decoding the data

    It’s often said that Data is the New Oil. In truth it isn’t, data is increasingly cheap and easy to access. Being able to analyse that information is where the power lies.

    Data analytics is probably going to be one of the most important fields in an information rich economy and already we’re seeing companies springing up to help farmers estimate crop yields, truck drivers plan their routes and even organisations like the Royal Flying Doctor Service using cloud services to better plan their operations.

    Again these services plan a lot but there’s also downsides as inappropriate data matching risks breaching consumers’ privacy and even drawing false conclusions from confusing correlation with causation. A good example of this is Facebook being used to judge credit worthiness.

    Removing the human element

    Automation – whether it’s through robotics, machine learning or algorithms – will change many industries and the workforces employed by them.

    One understated field is management where many white collar supervisor jobs are at risk from business automation. It may be that the executive suites are the next sector to be decimated by computers and robots.

    Similarly, many services industry jobs such as taxi drivers and baristas are at risk from robotics while large scale 3D printing of buildings threatens to put many building trades under pressure.

    No more truck drivers

    Driverless vehicles have a whole range of applications, in logistics were seeing them put forklift drivers out of work while mining companies are rolling out massive dump trucks in their new mines that don’t require $200,000 a year drivers.

    One study estimates that half the police workforce in the United States would become redundant as law abiding driverless cars become common.

    Similarly electric cars will have a massive impact on government revenues. Currently Australian governments raise $17bn a year from fuel excise and has ramifications for businesses involved in the supply chain for service stations.

    Once driverless vehicles become commonplace we may well see them changing industries like daycare, public transport and couriers as it becomes possible to summon an autonomous vehicle, put the kids or the luggage into it and then send it off to its destination. If you’re worried, you can track the progress on an app.

    The effects of the driverless car show how we have to think laterally about the effects of new technologies on our businesses, sometimes the effects of a new way of doing things could indirectly hurt our business or create new opportunities.

    Squeezing out inefficiencies

    One of the great promises for the IoT, Big Data and business automation is to remove inefficiencies from industry. Cisco believe that up to 14% of the Oil and Gas industry’s costs could be stripped away with today’s technologies. That in itself is worth over a 100 billion dollars a year in cost savings.

    GE are deploying their technologies into a diverse range of industrial equipment ranging from jet engines to railway locomotives and wind turbines with spectacular results in reducing costs and improving productivity.

    The effect of these improvements means less downtime and maintenance costs which are good news for customers and shareholder of these companies, but bad news if you’re a maintenance business. It also means the speed of change in business is accelerating.

    Skilling the future workforce

    In summary the skills needed today are very different to those of 1915 and 1965 and those of the next fifty years will be even different.

    As a society we have to decide what skills we are going to give not our children but those currently still in the workforce who are going to be working longer and later into their lives as the workforce ages.

    We also have to consider what sort of ethical compass we have. While the technology we have today is powerful and capable of great things, it’s also capable of great harm. We need to have an understanding of what the effects and limits are of our actions with the Internet of Things, Big Data and analytics.

    Ultimately we need to ask what value we as individuals can add to our communities and society.

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