Yesterday morning I represented Xero at the APEC Conference on Innovation, Trade & Technology. I was on a panel discussing the economic benefits of innovation and ICT in Finance, Telecommunications, and Electronic Commerce. To be honest I usually talk on technology trends like cloud, mobile, HTML5 etc, so talking about innovation and ICT from a geo-political standpoint was definitely different for me!
The other panelists were from Asia and Russia and ranged from a business selling semi-conductors to one that was doing retail e-commerce to another that was working on new global standards (ISO/IEEE stuff). The idea behind the panel was to discuss the barriers surrounding innovation in APEC economies and what could be done at a policy level to foster greater innovation and build for growth.
What was interesting is that the variety of industries represented on the panel meant for a broad range of opinions. The big barrier for everyone else was trade barriers at the border especially at a customs level. They were talking about how to reduce costs of shipping and costs of entry into new markets. I made the point (perhaps not appreciated by my fellow panelists) that this is exactly why software wins!
I didn’t get a chance to go too deeply into the discussion points I wanted to make but thought I would share the ones I did get to raise.
A serious problem in New Zealand and any small and emerging market is access to funding to take innovation out of the lab, commercialize it and sell it into a global market. While one approach would be to foster innovation in our universities and try to pair that with the private sector for a collaborative approach, I believe we need a deeper pool of funding and financial encouragement to be able to grow exporting businesses. At TechCrunch Disrupt last week the point was made that if you want Silicon Valley funding then your company needs to be in Silicon Valley. How do we change that perception? And then how do we get that access to that funding? How do emerging markets in South East Asia and South America get access to that funding? What regulatory and compliance barriers exist for VC’s? How do we reduce the risk for these VC’s?
The cloud is a fascinating beast. If we take SaaS out of the equation (so just talking about cloud computing providers like Amazon or Rackspace) then the consumers are the ones doing the innovation, not the producers – there is actually a disconnect between the innovators and those providing the platform. Therefore where the service resides and who provides it is irrelevant. Think of how much easier it is to build global, scalable software nowadays without the need for a data center. Cloud computing lowers the barrier to entry for software businesses to innovate and scale very quickly. So then it’s no longer about software and hardware – it becomes about data (I’ve blogged about this before) and obviously the privacy around that data in an ever-increasing online world. How can data be protected and privacy rules around data work in such a way as to not stifle innovation and to allow for these businesses to grow?
The costs of doing business overseas
It’s really important to make it easy and accessible for businesses to enter new markets. The costs associated with doing that are very high (especially with immigration laws that stifle rather than foster new business growth). How about a user-friendly patent office and one that works for IP protection across all APEC economies? How about minimizing compliance costs and the costs associated with establishing new businesses? How about easing immigration laws to make it easier for businesses to put people on the ground?
It seems great to me that APEC is working hard to try to build an environment tailor-made for growth and innovation. I believe APEC needs to look for opportunities for a shared approach and partnering between APEC economies and provide advice on streamlining regulatory and compliance barriers to facilitate exploitation of innovation.