The value of the internet

The internet is a powerful tool for business, yet for too long we’ve struggled to convince many people of this fact.

It’s all about pornography, stealing copyright material and playing games, they say.

I’m not joking about this – I’ve heard it from government ministers, leaders of business, academics and (most alarmingly) a retiring Telecom board member. Really.

Now, however, we can point to a report that is at the least impartial and well put together. Sure, we’ve had reports in the past of the economic benefits of broadband, but when they’re produced at the behest of companies like Ericsson or Alcatel, they tend to get tarred with the “of course you’d say that” brush.

Today’s release, “The value of internet services to New Zealand businesses” was commissioned by the Innovation Partnership, which consists of InternetNZ and Google among others, but is put together by the economists at Sapere, led by an old colleague of mine, Hayden Glass.

The upshot is, yes having broadband does increase your productivity, improve your bottom line and deliver on all the benefits we’ve talked about for years.

On the other hand, the report also highlights those sectors of the economy where broadband has not made much of a dent – most notably in the rural sector, where farms and farmers seem immune to the charms of having internet connectivity either because they don’t see the value or, more likely in my view, because they’ve never had it and don’t know what they’re missing out on.

A couple of years ago I spoke at a Federated Farmers Nelson branch AGM, and talked about the UFB and RBI proposals and how they’d impact on rural life.

At the tea break, one large burly farmer came over to tell me he saw no value in the internet at all. His wife overheard him, smacked him on the shoulder and called him names. We use the internet, she declared, when it works and we need more of it. The apprentices use it for their studies, the kids use it for theirs and we used it to get the seats to the Rugby World Cup. In fact, so poor was the connection that they nearly missed out because after choosing the seats on the handy online tool, the connection would time out and she’d have to re-book from scratch.

“We nearly missed out on the semi-final,” she told him and he was an instant convert. “We must have more of it,” he declared.

Of course, there’s more to farming’s need for broadband than tickets to the rugby. Irrigation schemes, weather reports, milk yield reports, ongoing education and training opportunities, GPS mapping, health inspections (both people and animals), animal ID tags and so on all rely on better connectivity and on farmers willing to use this new kit.

Every percentage gain in productivity we can deliver in rural New Zealand will have a huge impact on our overall GDP and if that was the only measure, we’d be strongly urging rural New Zealand to get online as fast as they can, but of course it’s not. There’s also the social need – rural society’s cohesion relies on good communications far more so than in the city where we’re face to face on a daily basis.

This is a fight that should shape the next election – finally we have the ammunition we need to direct policy makers in the right direction.

There’s plenty more in the report as well, so do take the time to have a look through it. Well done to all concerned with its production. It’s something we can all use in our ongoing debate about connectivity.