How should the Government invest in NZ technology?

Posted on: November 7, 2020 - 16:03 By: carl

A new election cycle is a good time to take stock of what has happened and what we might decide to do. In New Zealand we have a centre-left Government with a new set of technology Ministers… Megan Woods with Science, Research and Innovation and David Clark with Digital Economy and Communication.

Megan still has the problem of being the person that killed off New Zealand's involvement in one of the biggest scientific projects around, the Square Kilometer Array. Admittedly she did it after an appallingly short sighted briefing from MBIE that focused on problems rather than solutions. Unfortunately David also carries some of his own baggage and so will have to perform spectacularly will to regain our trust.

One recommendation comes from some luminaries in a Think Tank who say that a focus on Innovation and the knowledge economy is what is needed. The paper covers a number of areas and appears to be fairly reasonable which is what you would expect given the calibre of the authors however I do have some concerns about one aspect of their argument. They point out that while New Zealand is making progress in some areas there is no critical mass and therefore we need investment from large multinationals to boost our research footprint... Well I'm sorry to burst their balloon but while New Zealand and Australia are fantastic test beds for new products, the BRIC countries (Brazil, Russia, India, China) have significantly more low cost, high quality IT professionals on tap than we do and the investment will never come this way. Even if Russia and China are off the table from a US investment perspective, Brazil and India are still orders of magnitude ahead of us. 

Add to this that there is also an election cycle going on in the United States of America... they're still counting ballots as I write this but one thing is abundantly clear to me right now and that is that just under half of the eligible voters in the USA think that Donald Trump is the best person to lead the country. Irrespective of how the count actually ends up, that fact alone is cause for deep concern. New Zealand, through Government expenditure, buys a significant amount of hardware, licenses and support services from companies based in the US. Is it a stretch to say that through that expenditure NZ is complicit in the support of such far right extremism? Quite possibly. Is it also a stretch to say that we should not buy Huawei products because of the links to the Chinese Government? Also quite possibly. The global economy is a many faced beast and you need to tread carefully.

But even with all that we can also take the moral high ground if we want and say actually Megan and David, there is another way. Rather than send all that money off shore, we could redirect some of it into the local IT economy via Open Source products and services. Rather than continuing to focus on intellectual property and proprietary solutions that we clearly still have to share and/or rely on for foreign investment purposes how about we focus on Open Source and just making things better for our own citizens as a start. We get the primary benefit and others can share in that if they wish and maybe hire New Zealanders to help them in the future as well.  

The immediate challenge today is that due to the NZ Government agreement with Microsoft whenever a Ministry moves to 'the cloud' they actually mean Azure... no questions asked, no alternative NZ based options* discussed. I haven't ever seen a debate started over that decision. Most Ministries have a 'Cloud First' policy, which is fine as far as it goes, but they seem to be using a dictionary where the entry for 'Cloud' reads 'See Azure'.

This may be all very well for general Office based services... but no-one even asks are there workable alternatives? Yes there are but that is a very hard sell when Ministry employees regard Microsoft products as 'free'... They aren't but the true cost is hidden and if you can't measure it you can't manage it as they say.

There are some interesting examples when it gets down to applications though. For example both ACC and IRD have invested heavily in services from a company called MapR that provides integration with the Hadoop Open Source software stack. Unfortunately MapR got bought out by HP, ran out of money and have subsequently shut down. Even more unfortunately neither ACC nor IRD have looked at the significant time and effort they have put into building the development capability to run and support the Hadoop environment and said yes, we will continue to develop and leverage that in spite of MapR's demise because it is Open Source and we can...

In ACC's case they are now looking at using another service provided by a US based company called Snowflake. A US company subject to US law using US based cloud providers and US developers controlling personal health information about New Zealanders. What could possibly go wrong. And don't think that we would have any redress with any US based multinational if something did go wrong. While our taxpayer spend with them might seem large from a New Zealand perspective it is just a rounding error on their balance sheets and they can (and do) ignore us with impunity. 

So could ACC and IRD have continued to support New Zealand developers and other IT specialists to further leverage their New Zealand taxpayer funded investments? Of course they could have, and they may have even considered it, but that is not their primary role!

And this is where the Government could step in to kickstart the economy. The IT industry here as a whole is decrying our shortfall in IT specialists. Some organisations spend significant effort in trying to backfill that shortfall through improved education paths and innovation hubs and that is all great stuff but we also know that there are many, many people coming out of tertiary education today that are struggling to find work. Add to that the Covid-19 downturn and you get the situation where 400 people are applying for a single IT role.

So how about diverting some of taxpayer funding that is being used to support someone else's economy into supporting innovation pools or hubs that supply services into national or local government? The precedent here is the DIA Service Innovation Lab that has now devolved into the DIA Digital Public Service branch. This is a great start but doesn't go quite far enough in my mind. The Strategy for Digital Public Service is all well and good but we could also have hubs that develop and deliver solutions as well as support the heritage BAU aspects of Government... the Technical Debt as they call it. E.g. The cross Ministry Hadoop development and support hub. The All of Government identity and access hub. The AoG Security Evaluation and Test suite that could vet Government websites before they go live to ensure there are no data breaches...

These labs or hubs could resolve a number of issues:

  • Get people out of Covid-19 induced unemployment. Yes, the seasonal harvesting industry is one option but a) it's seasonal and b) the IT industry doesn't need you to move to Otago (unless you want to of course).
  • Provide a guided support structure for new IT graduates giving them initial skills and experience businesses are looking for. No waffling about looking for ideas to implement... there would already be a list of things that need fixing now!
  • Allow businesses or local Government to tap into resource to support their services. Keeping the innovation alive.  

Everybody wins. People new to the industry gain experience. Older workers keep their skills up and provide mentoring. Private business gets a steady supply of experienced workers. The Public Service actually gets some results. Taxpayer money stays invested in New Zealand. Think Tanks get their Innovation and knowledge economy. Tiwai Point becomes a massive datacentre supporting the SKA. The economy booms. World Peace and the end of hunger and starvation ensues... Well, maybe not that last bit but you get the gist.

We don't really have anything to lose and plenty to gain.

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