It takes energy to create energy saving goods. This is something my father told me the other day when i was looking at energy saving light bulbs. It is a truism, which led me to thinking - can we achieve more than the sum of our parts in the digital world of commerce? i.e. Can Australia develop a synergy in the digital economy as Kevin Rudd would like us to achieve, or is it a pipedream? Dr David Skeller, CEO of National ICT Australia spelled it out for us.
Okay, let me burst the bubble first. Australia is hopeless in the online world of revenue generation, as well as being suitably poor in industry collaboration with each other and with research institutes. How much? Well, only 3% of revenue generated in Australia comes via Online sales whilst it is 15-20% in the UK, Belgium and other more enlightened economies. We pip Turkey, only just, which keeps us off the bottom run of the ladder among OECD countries (Organisation for Economic Co-Operation and Development - people listen to this think tank, so don't dispel the figures). Don't ask about the yawning gap between us (lowest) and the next lowest for collaboration with the research institutes (university, govt non profit like NICTA).
Let me ask you a question: Have you ever Googled for something to buy online only to not find it or resort to eBay? Yes? Well know you know why and also how far behind we have fallen.
Is this fair? This is the argument so far: Australia is a huge country with a relatively low population density with most being on the coastal zones. Hence there is not the 'cohesive mass' such as UK which has the ideal conditions to roll out broadband. It is not the same to ask someone in say, Cooper Pedy to buy broadband - it would cost a fortune.
These are all true - some historic and changeable, others unchangeable. However, there is one aspect that is often overlooked - the culture in Australia. Buying online is regarded by many as anything from the devils work to being a scam and unsecure. This is the reason why broadband has been so slow in the uptake and more than likely the reason why companies have not invested in an online offering.
Well, finally the Australian government is taking up the gauntlet by committing to full broadband for all of Australia with grants and support for the regional areas. As the quote goes... 'Build it and they shall come'. We hope. Also there has been the creation of advisory govt bodies (non profit) that have been asked to work on breakthrough innovations and to get them used in the market (by the leaders/early adopters initially). One such is National ICT Australia.
National ICT Australia - what is it?
This is a non profit federal government company that is a joint venture (i.e. staffed) from the main state Universities including (in no order): QUT, UQ, Griffith University, UNSW, Australia National University, University of Sydney and University of Melbourne. Also the QLD, ACT, VIC and NSW governments have an active role.
Their remit (apart from the breakthrough innovations) is: to teach companies to be more competitive in the ICT space through research; to advance ICT skills in Australia and to license IP (intellectual property) to industries. They have a number of fields they are active in and we can regard these as layers in ascending order and importance:
- Broadband infrastructure. This is the management of, but they also are helping to push wireless technology and to monitor broadband uptake.
- Smart Devices. This is PDA, iPhone and other mobile devices and their operating systems & security
- Digital Services. These are key to extracting value out of broadband and the devices that connect to them.
- Application and Content. That is - applications bringing together content and services, securely over the broadband network.
We will consider these individually to try to make sense of how things are progressing to develop the digital economy in Australia.
Broadband Infrastructure
NICTA does not advise on the actual infrastructure, more the management and uptake of broadband - this is left to the network providers which are working to the Federal remit. What we do know is that city and metropolitan areas will be likely provided via fibre channel and the regional via Satellite and Wireless. The latter is the most important to develop as an affordable and accessible resource to regional people. The fibre channels in other areas are in the upgrade category and are relatively less difficult to service. What does need consideration is new housing development which can put too much strain in popular areas.
Smart Devices
This is referred to as 'The Internet of Things", but in a nutshell where we are now/heading to is an "always on" environment - a set of networked & interconnected things that reflect what is happening in the physical world. These devices have varying levels of intelligence but what NICTA are pursuing is that these devices communicate what they are, where they are, what they are good for, what is happening in their surroundings and what capabilities they have. Here are some examples of what we have now:
- The Car. Most standard and luxury cars have up to 90 embedded computers in them measuring any number of aspects of a cars setup and operation. The 'Sports' button on your console is likely to update many different setup options on the engine, suspension, steering and brakes to make things 'Sporty' or in the opposite scale 'Economic'. They communicate this back to a central unit that can be analysed by the dealership. This is a good example of a smart device.
- RFID Catering. This is a prime example of a very smart device that could be transferable to the domestic kitchen. It will be fitted to Industrie Airbus A380 in first class. An RFID tag is used for food items, say a sirloin steak and also there is one on the grilling tray which in turn goes into an induction oven. The tag tells the grill pan what it is, how long it takes to be rare, well done etc. The grill pan has it's capabilities coded so the oven knows how long to cook a perfect steak and when to tell the cabin staff to turn the steak over. Brilliant - no more reheated food (if you can afford first class that is). There is no reason this could not be developed for the domestic kitchen and hence a new generation of appliances are born. The same RFID tags can be used to record food usage and transmit this to the ground staff for efficient reloading when the plane lands.
NICTA also helped to develop an embedded Operating System with Open Kernel Labs called OKL4. This is robust and prevents blue screening and other glitches that could occur in the native OS when running mobile applications. There is a strong chance it is in your phone right now as most mobile companies use it for mobile applications.
Digital Services
As noted earlier this is probable the key area - they are need to extract value out of broadband and the devices that can use them. They are divided into two areas:
- Generic Services. These cover areas such as SOA, security, mobility etc
- Sector Specific Services. Not all sectors are suitable to be 'digitised' but those that are need services that fit their industry best practice (as we know it now - it is not a constant). These include transport, health, water, logistics, eGov, emergency services and many more.
These services must be consistent and have a convergent service provisioning. NICTA advises to industry software providers on how to keep the services in this manner. SAP is one such company and always has focused on vertical sectors so i well placed to develop the digital services to suit. SAP has its own research arm staffed by students developing new service offerings that are running prototypes. NICTA would be a company that would be asked to review these and provide an analysis and feedback. This practice is encouraged and promoted - as noted the industries are not really collaborating with research so in the meantime, the software vendors need to step up to the plate.
Digital Services is about taking a manual process and digitising it. However, a word of caution - they must have a common language and protocol with a proper business process evaluation and mapping to be a success. That is without offloading the work from this onto another sector or third party. This leads us onto...
Applications and Content
This needs industry support and key personnel involved. It is essential to negotiate a way to work with all parties in a business process. If one sector offloads to another it becomes counter productive e.g. to digitise a business process but then increase the load of a third party is not acceptable. The application and content must be shared and be mutually beneficial.
What are the issues that should be avoided?
In order for the digital economy to grow there are a few possible pitfalls to be avoided as well as some form of mitigation. Most importantly it should be noted that sub systems developed at different times and by different vendors can lead to a heterogeneous set of systems which can react badly to unknown demand levels and the capacity of which is hard to measure.
Put simply if the solution landscape for a set of applications (and therefore digital services) is heterogeneous and not carefully checked out it can lead to performance bottlenecks or simply never run well at all. NICTA has developed ePASA which supports a digital services delivery. This can check the behaviour of systems, check for performance bottlenecks and carry out scenario testing. i.e. it is a modelling and testing tool.
In a way it can be viewed a a Go-Live check service. Should you go or not? Well, this is really the remit of an enterprise architect and should be addressed at the start of the digital services/application project. However, it cannot hurt to have another tool on hand and as NICTA are the specialists in this new advisory and development of innovations 'field' it would be churlish to dismiss it.
So where are we going?
I would see this as a twofold parallel approach: develop the infrastructure and make it affordable & accessible; promote the involvement of NICTA with industry leaders and research organisations. As many might be saying "but it will take away Australian jobs if we have a bigger revenue share in online sales" i would say, what a load of rubbish. Increased sales does not necessarily mean loss of point of sale. What it does mean though is more goods & services sold, more revenue, more warehouse and transport activity, more admin staff so where is the loss of jobs?
As a point in note, one of the most successful online sales companies, Amazon, has no physical point of sale outlets but i can tell you this - it has one of the biggest warehouse and supply chain operations in the UK. Now that cannot be bad for business. So why can Australia not get to that point? Is online revenue operations the devils work now, or is it our saving grace?
Chris Enstock
5th August 2009
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