ISAMBARD

I've long been a fan of journalist and broadcaster Tim Harford (aka.  The Undercover Economist ). Harford's skill is making economics and related topics understandable/readable/listenable for you and me.  His latest book is Fifty Things That Made The Modern Economy , published by Abacus and based on the excellent  BBC series of the same name. As the title implies, Harford tells the reader something of the often-quirky history of 50 important inventions which have had a profound impact on the world today.  These are not "The Top 50" - more like a curated selection among many important developments. Some are obvious, such as the plough and its impact on food production.  Others perhaps less so; for example, copyright and the limited liability company.  And Harford makes no bones about leaving out some of the more obvious, such as the computer, while extolling the significance of Grace Hopper's computer language compiler, and the wonders unleashed by comput...

Yesterday, after 6 years, was my final day as chair of REANNZ (Research & Education Advanced Network New Zealand Limited).  REANNZ has been a fantastic business to be part of.  It is a highly specialised national and international telecommunications company with a very particular technological advantage.  In layman's terms, REANNZ moves heaps and heaps of data very, very fast.  We're talking truly huge data flows - astronomically large files (literally).  Normal telcos are optimised to move lots of small packets of data. REANNZ (like its partner R&E networks around the world) moves data in a different way. A normal network might need to re-transmit 1 out of every 100 or 1000 data packets.  REANNZ has a packet loss rate of 1 in hundreds of millions. That has huge performance implications for large discrete data flows over long distances. What REANNZ moves in an hour can take days or even months on a conventional network.  That means researchers...

Access Granted, the online podcast channel, focuses on NZ tech sector and related themes. They interviewed me recently. We discussed change, tech, research & education, construction, and directorship. We covered a lot of ground. If you've got a spare hour, here's the link: http://www.accessgranted.nz/episodes/2018/1/9/jim-donovan-professional-director-changing-the-world-in-big-ways

Governments, business theorists and business media are obsessed with innovation. Vast sums of money are expended on government-sponsored research. Something’s bound to pay off with a ground-breaking new technology that will increase jobs, wealth and foreign-exchange earnings, won’t it? However, innovation is only the start of the process. We’ve got plenty of innovation, and we aren’t short of new businesses either. The problem is creating better, larger businesses that can foot it internationally (with full overseas operations, not just exporting). The Economist  explored the same issue , reporting on those who question the fear of US companies being overwhelmed by technological innovation coming out of India and China. So does the relative decline of America as a technology powerhouse really amount to a threat to its prosperity? Nonsense, insists Amar Bhidé of Columbia Business School. In “The Venturesome Economy” ... he explains why he thinks this gloomy thesis misunderstands...

IT guy Mike Riversdale makes  some common sense points on his website: ... the chatter about “collaboration” one tends to hear now-a-days (and boy, isn’t there a lot) all centres around “on-line collaboration” … the use of the computer as the ultimate collaboration tool. What a load of plop. I sat with a fellow “on-line collaboration / community wrangler” a while ago and we both used pen and paper as our collaboration tools of choice. … when I talk with organisations about collaboration I always ask if they use whiteboards, meeting spaces or Scrum-type meetings to collaborate as they can be the most cost effective, most efficient and, let’s be honest, the easiest way to collaborate. Mike ran an collaboration and information project for me. Most of his success came not from the technology deployed, but by good old fashioned simplicity and clarity in project management and communication. Mike’s comments reminded me of Toyota’s production management systems - coloured ...

Businesses spend a fortune protecting themselves from outside security threats, but too few recognize that their biggest threat is from those already inside the security fence - i.e. their own staff. While 99.99% of staff are honest (give or take the odd dubious “sick day”), now and again someone on the company payroll may do some damage. The biggest corporate thefts are perpetrated by insiders - from simple pilfering (women’s fashion retailing notoriously suffers badly from staff theft) through bogus invoicing all the way up to stock option manipulation. One area of risk that’s often overlooked is IT. The widespread use of outside suppliers and contractors is ripe for fake invoicing and kickbacks.  Malicious programming which steals a cent here and there over time can cost millions. Disgruntled employees can do nasty things to your systems, e.g. stealing your data, corrupting it, or building “logic bombs” to bring down your systems.  While you can manage most of these ris...

Why do corporate (and especially government) buyers keep confusing cheapness with value? Time and again I’ve seen the best vendors lose on price because the buyer could “get it much cheaper elsewhere”. The classic example is professional services charged by the hour. Any good manager of people knows that you pay your better staff more because they are more than worth it to you. For example, a good IT designer/developer will work out many times cheaper in the long run. They understand the business need quicker, design quicker, design better, write code quicker, write better code with faster performance and fewer bugs, and their software is cheaper to maintain. That can equate to a 10-30 fold lifetime cost difference - the saving more than outweighing any hourly rate difference. And that’s before you factor in the risk of non-delivery - much lower with better suppliers. But many corporate buyers persist in penny-wise, pound-foolish buying practices. I have interests in several f...

© Sydney Padua Today is Ada Lovelace Day.  Ada, Lady Lovelace , is widely recognised as the world's first computer programmer.  Born in 1815, Ada was the daughter of Lord Byron, the poet, who abandoned Ada and her mother just after Ada was born. Probably in reaction to Byron's "poetic madness", Ada's mother insisted Ada be taught "rational" subjects, and she received tutoring from some of the finest intellects in Britain. She was, by many accounts, a mathematical whizz. Ada became a friend and collaborator of Charles Babbage , and she devised the programs for his Analytical Engine.  Although Babbage's machines were never built, recent experiments have shown they would have worked, and he is regarded as the inventor of the first programmable general computer; hence Ada's honorific as the first computer programmer.  She described herself as an " analyst (and metaphysician) ". When I first started in IT, the gender ratio was much ...

In 1996, on good advice, we set up two family trusts - one to own the family home and the other our long-term investments.  3 years later, we established Isambard Investments Ltd (originally called Pentangle for some long-forgotten reason) to hold our more venturesome investments.  At the time, the tax department was signalling a very aggressive attitude to venture investing even though they were long-term investments, so we wanted to isolate them from our more passive investments. In 2001, we added Isambard Ltd, to be the vehicle for my professional services as a director and occasional adviser. It all seemed like a good idea at the time, but the reality was unnecessary complexity and cost with multiple books to keep and tax-returns to file.  Moving forward to 2015, a saner environment prevails.  Isambard Ltd continues to be a useful vehicle for me - at least for now - but we have rolled all those asset-holding entities into a single trust, and we've shut down Is...

" Manufacturing the future: The next era of global growth and innovation " is the title of McKinsey's latest report.  The executive summary is worth a read, but I'm not sure it gave me many new insights.  However, and this is why I read their stuff, it contains some interesting statistics and charts.  Here's one example: You need to think through the necessary generalisations implicit in this chart: If you can invent something new in wood products (an industry marked by low R&D and low value density), can you scale it up enough to take the world by storm? Is the real opportunity to create the technology to make that new wood product, and then sell it to the world's wood product makers? Northern Europe's mid-size machinery and chemical manufacturers (R&D intensive) have done well this way. There's often more money (and easier money) in selling picks and shovels to gold miners than in gold mining itself. Of course, at a national level...

Some years ago (in 1999, I think), I was invited to address the Royal Society in New Zealand on “The future of work”. I assumed that I’d been invited because of my profile as a tech company CEO, and that I was expected to espouse the vision of technology transforming work and the workplace. My co-presenter was noted New Zealand academic, Dr Norman Kingsbury. Norman’s advice to me was to “surprise them”. Unfortunately, I’ve lost my speech notes, but the gist of my presentation was something like this: The exploding ability to store, find, order, and connect information of all types will radically increase our use of knowledge and enable more innovation and new types of business; Technologies will merge, so that a successor to both the mobile phone and PC will become your primary means of accessing that vast pool of information and services (albeit linked to physically restrained appliances such as large displays, printers and high capacity communication links); The internet and the...

Rowan Simpson, successful web business product strategy guy (Trade Me, Xero, et al), summarized the product development options for web businesses : Spend months and months (perhaps longer?) trying to make the site perfect before letting it see the light of day. Throw it out there, and follow quickly with a huge marketing campaign hoping that people won’t notice that the site itself isn’t all that you’re cracking it up to be. Launch quietly, get a few users, watch closely to see how they are using the site and how you can make it better for them, be patient, continuously improve the site, and focus on making sure that those people who discover the site have a good experience and tell their friends. Rowan argued that, while each option has flaws, option 3 worked for the web’s big successes (Google, Yahoo, Facebook, You Tube, Amazon, eBay, My Space, etc, etc). Rowan’s article reminded me of our incremental development approach at Deltec (now part of Commscope). Deltec’s first Tel...

One of the weakest excuses you’ll ever hear is “ Sorry; it was a computer error .” My initial reaction is almost always derision. Computers very rarely make errors, whether in reading or writing to a file, or moving data around (internally and over communication links), or in processing. Computers have inbuilt self-checking so that errors are detected and overcome or at least alerted. None of these should be sufficient to actually cause the incorrect recording and processing of an organisation’s business with you. So let’s look at what really went wrong: An error in understanding what systems and processes that the organisation needed to conduct its business with you. An error in specifying that need. An error in designing a computer system to meet that specification. An error in building and implementing the system. An error in testing the system. An error in the business processes around the system. An error in training people how to use the business processes and the syst...

I've said before that most service jobs are created directly or indirectly by those who make stuff.  Until the 18th Century, manufacturing was essentially a cottage industry.  Between 1750 and 1850, the 1st Industrial Revolution saw the rise of machine-based manufacturing (especially textiles), enabled by innovations in energy (coal-powered steam engines), materials (especially large-scale iron-making and casting) and logistics (notably canals).  The 2nd Industrial Revolution - also known as the Technological Revolution - gave us low-cost steel,  new materials and chemicals, effective railroads, electricity, mass production and the assembly line. Last month, in a special report on manufacturing and innovation , The Economist pronounced the world to be in a 3rd Industrial Revolution. Additive manufacturing (3D printers), flexible smart production equipment capable of runs of one unit, super-modular design concepts, design visualisation tools, new composite and na...

Today's DominionPost featured an article by Tom Pullar-Strecker on technology firm 4RF [Communications] currently in receivership.  Pullar-Strecker cast aspersions on other technology firms, including my old company Deltec: . .. Telecommunications equipment manufacturers in the capital have failed to exude the Midas touch. Antenna-maker Deltec – New Zealand's "Supreme HiTech Award Winner" in 2000 – closed in 2002 with the loss of 30 jobs... Read in the context of the 4RF [Communications] receivership, this wrongly portrays Deltec's departure from the Wellington economy. Strictly speaking, it was Andrew Corporation's NZ R&D unit that closed.  Deltec was very successful, peaking at over 200 staff and contractors, with high growth and high profitability. That success attracted Andrew Corporation to acquire Deltec's operations and technology in 2001.  Andrew Corporation quickly transferred manufacturing overseas, but Deltec had pla...

Imagine you're a small or medium-size food business, offering premium quality products for sale through supermarkets.  The supermarkets are squeezing you on price,  because your sales volume doesn't give you much negotiating power.  You need to build demand for your products, but you can't afford a big advertising campaign.  What can you do? That's the problem a new business called  Fast, Fresh & Tasty set out to solve.  Fast, Fresh & Tasty is a smart-phone recipe application. This is how they describe themselves:   Fast   - A recipe app designed for busy people who appreciate good food. Follow the step-by-step cooking instructions. Use the shopping list, which sorts ingredients by recipe or department.   Fresh   - We’ve hunted down the best quality ingredients from right here in New Zealand. Our app stays fresh too, with free seasonal updates to keep you as fresh as.   Tasty - We’ve hand-picked the tasties...

Many readers will have seen Sir Paul Callaghan advocating the merits of manufacturing and technology to lift New Zealand's economic performance (as opposed to more dairy farming or tourism, the current favourites, even though we lack the natural resources to lift those land-based industries much further). Sir Paul challenged us to create 100 more companies of comparable size to our existing leading manufacturing and technology businesses. His proposal is based on a simple fact: manufacturing generates 2-3 times more GDP per job than dairying or tourism. Now someone has prepared a graphic tool to extrapolate the economic and job impacts of those additional businesses . I suspect the underlying assumptions and formulae are too crude to make this tool a serious economic predictor, but it does illustrate how manufacturing and technology outperform dairying and tourism in lifting GDP per capita (which flows through to higher wages and better public services and infrastructure). ...

Governments around the world, including New Zealand, invest in education, infrastructure, civil institutions, etc. That's important and necessary, but it is not sufficient for national competitive advantage. Where are the massive untapped resources that New Zealand has in abundance; that, if developed, could lead to major new industries to rival our farm-based industries in scale. Answer: Zealandia , our continental shelf and the fifth largest exclusive economic zone in the world , bigger than Europe. Many people do not know that New Zealand is ranked amongst the highest of all nations in its potential value per capita of mineral resources . We are a resource-rich nation, but simply licensing others to utilise our resources will do little to build long-term national wealth and capability. We haven't seized the huge opportunity that our onshore and offshore continental shelf offers. Only a small part of our academic and scientific effort is focused on it. Other than some lim...

I am often exasperated by people texting, messaging and emailing during meetings, or worse, taking phone calls. It’s a real issue for newer members of the workforce who may have developed the habit of using their phone or laptop anytime anywhere. Some thoughtful people worry that the remoteness and lack of humanity shown by some intra-office emailers (flaming someone whose desk is ten metres away) will spread into broader human interaction. No doubt some workplaces and some people will fall into that behavioural mode, but then again, look at how quickly it’s become commonplace in some countries for smokers to no longer inflict their habit on others in the workplace, pub or home, evolving through asking permission to now taking themselves outside. That societal pressure to adopt better behaviour is called “good manners”. On starting my first job I was given a list of explicit do’s and don’ts. I was also assigned a “buddy” whose primary role was to answer my newby questi...

Remember when providing company cars was a big part of staff remuneration? Many firms have stopped doing that, and simply pay staff more, with (subject to the whims of the taxman) generous mileage allowances. Why? Basically simplicity and flexibility. The company car costs far more to provide and administer than the expense claim method; and the internal angst and envy that goes with company cars isn't not worth the hassle. Give them the cash and get rid of the problems. There's  a growing school of thought that suggests you should take the same approach to people’s business technology, ie. their mobile phones and laptops. These are increasingly subject to personal preferences and, like cars, companies face specification creep as everyone aspires to the latest status symbol. Not only that, if you look around many businesses (especially in IT), you’ll see people who’ve brought their own computer and phone to work, because they prefer them to the standard issue platfo...