Bring on the cable guys

The government's strategy for economic prosperity - and closing the income gap with Australia - boils down to creating global businesses that produce and deliver high value products and services. This plan implicitly relies on increasing the export activities of our existing SMEs and our commodity base, the backbone of the New Zealand economy, while these new businesses emerge.

But where are these new businesses coming from and how are we enabling our current businesses to increase their output?

Recent trends show that businesses, both current and emerging, have strong dependence on our ICT industry with their digital presence. But their growth is restricted by a crucial component of the ICT infrastructure; namely access to well priced high speed broadband connectivity through fibre optic cabling.

The benefits of high speed broadband capability go beyond YouTube media watching, Facebook status updating and tweeting. It is about enabling 24-hour rapid access and delivery of products and services to international markets. Our geographical location is a disadvantage that can be ameliorated by improving our connective framework.

A century on from the marvel of refrigerated shipping containers, companies built on web and software technology are at the centre of a revolutionised global economy. These are businesses whose high value products rely on higher bandwidth capability that not only makes their products "weightless" and internationally scalable but also allows them to work closer with their clients, responding and predicting shifts in demands and expectations.

The result? Decreased transaction costs, high quality products and a reputation for great service. The businesses save money and have more control over their supply chains, both of which allow more resources for more innovation and, ultimately, greater profit margins.

A critical point to make is that New Zealand businesses can stay here longer than they do presently. We can run marketing campaigns, meet with board members, build relationships with potential partners and suppliers, grow our markets all from the comfort of our own offices. Or living rooms. Businesses can become global, right from the very start.

New Zealand already experiences the benefits of high broadband capability, albeit restricted to our research and education. The Kiwi Advanced Research and Education Network (KAREN) is an exclusive broadband network that links education, research and innovation organisations in New Zealand and across the world. The imperative is now to unleash this functionality to the wider business community and to the public.

The government's response to this need thus far has been the "Fibre to the Home" initiative - a $1.5b initiative implemented by Crown Fibre Holdings. But even when this is complete, we would still be limited by the current Southern Cross Cable - it is, in short, only a domestic cabling solution.

To reach our full potential we need both domestic and international connections.

Pacific Fibre, a private venture, is looking for investors to get the $US500m needed to develop a high capacity fibre cable that connects New Zealand to Australia and the United States. The Pacific Fibre pipe will have five times the capacity of the Southern Cross exchange.

Is it an ambitious project? Possibly. But so far they have the backing of some of New Zealand's most celebrated entrepreneurs and businessmen including Sir Stephen Tindall, Sam Morgan, Gareth Morgan, Rod Drury, Bill Day, Craig Winkler and David Kirk. Not to mention co-founder and ex-CEO of PayPal, Peter Thiel who recently became a shareholder. And with recent international bandwidth supply deals being signed with Vodafone NZ, Australia’s iiNet and REANNZ (owns and operates KAREN), Pacific Fibre is quickly becoming a reality.

Are there businesses that would benefit from this technology? Consider that over the last decade, New Zealand has seen a plethora of businesses that centre their success around the internet. The likes of Weta Digital, Sonar 6, Orion Health, Unlimited Realities, Sidhe Interactive, Xero - all are high growth business that deliver their products and services through the web.

Consider too that there are already a number of emerging businesses that would benefit from an improved broadband connection.

Initiatives like Spark and The University of Auckland Business School's Entrepreneurs' Challenge have already seen, and will continue to see, the next wave of emerging businesses that are using the digital space.

Spark has witnessed this wave first hand with a number of start-ups coming through its systems. Ecoportal® is a cloud-based environmental management system helping to green up NZ business. BrightMind LABS creates software that merges online-gaming principles with cognitive behavioural therapy for the treatment of psychological disorders. Koordinates provide digital map data over the web for cartographers.

Broadband is a technology that presents a great opportunity for a small distant nation like ours to be globally competitive by building international businesses and providing access into overseas markets sooner and with greater ease.

Our capacity and our potential to date has only been limited by our infrastructure - an issue that can only be addressed by the government and the private sector coming together. We are a country renowned for our vision and innovation. We have the business ready to make use of an improved network and we have other businesses waiting to be born. Now let's get on and do it.

Graeme Fielder is chair of Spark - The University of Auckland Entrepreneurship Challenge - and a PhD Candidate at the Liggins Institute at The University of Auckland.