Photo Credit: @TurnbullMalcolm. From left to right: Yoon Jong-Lok, Vice-Minister of Science, ICT and Future Planning, Korea; Amy Adams, Minister for Communications and Information Technology, New Zealand; Malcolm Turnbull, Minister for Communications, Australia, at KANZ.
Earlier this month I was fortunate to be invited by NZ Trade & Enterprise to the Korea, Australia, New Zealand (KANZ) Technology Summit in Auckland. The conference brought together members of the technology communities of all three countries to forge links and share ideas about how to grow and support the ICT sector and strengthen the high-tech economy.
For me, the highlight of the event was Dave Birch’s stream on digital identity and money. Dave is the Global Ambassador for Consult Hyperion, a UK based consultancy focused on security around electronic transactions. Dave is something of a payments raconteur, whose wisecracks about ATMs needing thatched roofs and assuming anyone using cash is a drug dealer were funny and insightful – but they were all inching toward the point that despite all the innovation in financial services, all that we’ve really done is move physical payment paradigms into the digital world, and it’s not all that great an experience. Proving and managing identity for online financial transactions is still a big barrier to efficiency, and establishing identity, even in the physical world, often gives the illusion of security without any true validation. It’s “two people acting in a play about security” rather than an exchange that is truly secure.
Also, all the innovation in payments is happening on networks that were set up in the 1970s and 1980s by Mastercard and Visa – what people are coming up with when they’re creating mobile wallets or swipeable wristwatches is still running through those networks. And although none of these innovations have had particularly strong take up with consumers so far, there doesn’t appear to be anyone doing strong advocacy for merchants, who on every innovative transaction give up 2% or more of the sale to the network that processes it.
But, as any network of sufficient scale is a potential platform for payments – it’ll be interesting to see whether the big distribution networks – Apple, Facebook, Google, LinkedIn, Amazon decide to get in the game and offer alternatives. On the New Zealand front, it’d be great to see a domestic network that was easier on merchants. With 2% of our transactional volume heading offshore in fees, it seems well within the national interest. Rod has written about this before.
There were a large number of representatives from Korea at the summit, and their story is a fascinating one. From being a poor economy in the 1960s, through smart leadership and a focus on technology, they’ve transformed themselves into the country with 12th largest GDP in the world and established themselves the world’s 7th largest exporter. Enviably, and on the back of that success, they also have the world’s 10th highest incomes.
Korea’s Vice-Minister of Science, ICT and Future Planning, Yoon Jong-Lok, shared Korea’s vision for a creative economy powered by the imagination of its citizens – where everyone can contribute to an bank of innovation ideas that can spun out into start-ups – with the submitter of an idea being partnered to business people to take the idea through to fruition. It sounds ambitious – but Korea, recognising that the continued value of their exports rests on their ability to innovate, is actively trying to harness the imaginations of all 50 million of its citizens.
They’re also of course one of the most technologically advanced countries in the world, with high speed trains, smart cities and blisteringly fast internet – so fast that the Korean delegates I met were noticeably astonished at our woeful internet speeds.
Korea is focussed on building cities and environments that foster start-ups, by creating technological ‘soil’ where a new breed of businesses can flourish. By creating cities with sensors, APIs and open data, there’s an opportunity for entrepreneurs to build services on top of this and create value for people. It’s an idea that’s been around for a while and championed by people like Adam Greenfield – the difference is that Korea is well down the track, and that people like Roger Dennis are aiming to emulate with the Sensing City project in post-quake rebuild Christchurch.
There’s no single factor that accounts for all of Korea’s success, but part of it may be the representation of technology in government. The Vice-Minister has a Masters in Electronics Engineering and worked at Bell Labs in the US as a special researcher, so he knows his stuff. If we were to look at New Zealand or Australia’s governments – that sort of representation just isn’t there. My boss has a possible answer for New Zealand – and it seems to me a sensible and straight-forward approach given that there’s unlikely any talent in our political parties coming through the ranks with those sorts of credentials. Getting some real ICT grunt advising cabinet on policy, however it’s done, can only help improve the level of conversation on ICT matters.
If there was one takeaway from the conference, it’s that every business and every industry is now a software business, and that Korea totally understands this and is refining its economy to capitalise on the opportunity. Its survival depends on it. Mary Meeker touched on this in her Internet Trends presentation with the idea of the Reimagination of Everything. It’s apparent and obvious that almost every industry is being disrupted. The question is, when every pre-internet business model is reconfigured and transformed to exist in the cloud – what then?