Is Australia ready for the Internet of Things?

While we flounder with our broadband options, the global market is getting more connected than ever. The inability of our political and business leaders to invest and collaborate could cost us dearly.

Australia is falling behind in the global technology stakes, with the inability of our political and business leaders to invest and collaborate costing us dearly in the connected global marketplace.

While we flounder with our broadband options, the global market is getting more connected than ever before. The cloud computing, mobility and Big Data trends have already forced businesses to rethink their strategies. But are they ready for what lies ahead? 

“You need to lead and grow, you can follow and accept the challenges or be left behind” was the message from Cisco’s CEO John Chambers at the inaugural Internet of Things conference in Barcelona, Spain at the end of last month.

It’s a message being ignored by Australia’s business and political leaders as the economy falls behind the rest of the world in key measures of public investment, tax reform and broadband penetration.

Chambers’ speech was part of Cisco’s push to promote the Internet of Things (IoT) – the concept of everyday machines having their own network connections – that promises to create $14 trillion of economic value across the globe by 2020.

As a global networking equipment vendor Cisco, quite understandably, has a lot to gain from selling the message. However, Chambers’ words should be a wake-up call for our so-called captains of industry and the politicians in Canberra.

Tapping the global supply chain

For high cost nations like Australia, the "Internet of Things" holds enormous promise for our industries to compete globally. Key sectors such as mining, agriculture and logistics have to adopt these technologies to cut costs and improve efficiencies.

In the logistics industry in particular, being able to monitor every part of the supply chain makes suppliers more accountable and reduces the risk of tragedies like the recent Melbourne Cup food poisoning outbreak at a function in Brisbane that saw one lady die and hundreds fall ill.

The ramifications of the technology on the transport sector are potentially profound. From a public transport perspective, the ability to connect vehicles (trams, trains, buses) to a centralised control platform opens up the opportunity to devise real-time information channels to commuters. This vast network of data can in turn be leveraged to better pin-point faults and mobilise maintenance and emergency services efficiently.

Agriculture is another sector that’s ripe for an IoT-driven transformation. The ability to place sensors in the field means that data ranging from soil temperature, livestock management, to water management can be collected and used to make better business choices.

Having suffered many much serious food poisoning scares in recent years, the People’s Republic of China is closely watching how the IoT trend can help reduce this problem and it was no coincidence one of the biggest media contingents at Cisco’s conference was from China.

The fact that Australia’s biggest trading partner is implementing these technologies and demanding its suppliers do likewise illustrates one of the biggest risks arising from the failed National Broadband Network (NBN) project – Australian primary producers and businesses will struggle to implement the technologies their international customers are beginning to demand.

An illustration of how Australian businesses risks being left behind is the recent Akamai internet connectivity rankings showing the country at languishing at 38th in the world for broadband connections, despite the nation being the twelfth richest and one of the most urbanised on the planet. What’s particularly sobering is that Australia fell six places from the previous year’s rankings.

Akamai’s rankings echo a Cisco Systems survey on the adoption of internet technologies earlier this year showing the Australia has more in common with Russia or Brazil than first world, high cost economies such as the US, Germany or France.

Government logjams and the digital economy

Our failure to efficiently rollout a 21st century communications network, courtesy of the risible political ineptitude from both parties, is only part of the risk facing the nation. An even greater problem is the logjam between levels of government.

In the United Kingdom, London is successfully positioning itself as hub of Europe’s emerging digital economy on the back of co-operation between industry and all levels of government.

Gordon Innes, CEO of the UK capital’s economic development agency London and Partners, described the co-operation between the city’s authorities and the national government.

“We’ve been working with the national government over the last three years,” says Innes. “I have team members seconded into Number 10 [Downing Street] and we work hand in glove with the government.”

Such co-operation between state and Federal governments in Australia is almost unthinkable and petty disputes, such as the NSW Liberal administration trying to charge NBN Co for power pole access, hinder national infrastructure projects or co-operation on economic initiatives.

More telling in the UK experience is how governments have worked with the business community and political leaders listening to industry has seen changes implemented that have boosted the British economy.

“There were a number of new policy initiatives that were developed,” Innes told Business Spectator in an interview in London two weeks ago. “I think what was great about this was they were developed with the tech businesses.”

“So there were monthly meetings at Number Ten with the Prime Minister’s digital advisor, my team, the mayor’s advisors and there were a whole range of policy initiatives put in place that the community asked for.”

The UK programs have included R&D credits, an entrepreneur visa program along with changes to the tax treatments of start-up investments and employee share options.

Many of these UK programs are exactly what Australia’s technology, small business and start-up communities have been lobbying successive Federal governments for, with their efforts being largely ignored by both Liberal and Labor administrations.

The Spanish experience

Attracting technology business to boost the local economy hasn’t just been the strategy of British governments,  as Barcelona’s deputy mayor Anotoni Vives told Business Spectator the city is looking to revitalise itself from the effects of the global financial crisis.

“Barcelona has to become a city of culture, creativity, knowledge but mainly fairness and wellbeing,” said Vives. “I would love to see my city as a place where people live near where they work, I would love to see the city self-sufficient in energy and it should be zero emission city.”

That vision is being acted upon in Barcelona with the council rolling out smart city technologies while working with business and the community to attract 21st century businesses.

While cities like Singapore, Barcelona and London are working on attracting entrepreneurs and global corporations Australia is struggling with building a handful of freeways and failing to upgrade the nation’s communications infrastructure. Thoughts of meaningful Australian tax reform or programs to encourage local or foreign entrepreneurs are the stuff of pipe dreams.

To the casual observer, the "Internet of Things" may appear to be a technology issue but our inability to keep pace in this field is really about the failure to invest in the nation’s future and the lack of leadership from both the political and business communities.

In his closing his remarks to the conference keynote in Barcelona, Cisco boss Chambers said “it takes all of us in this room to have the courage to take risks and we all know that leadership is about taking risks.”

In Australia, the lack of business and political leadership in facing the challenges of the 21st century is the biggest risk of all.

Paul Wallbank attended the Internet of Things conference in Barcelona as a guest of Cisco Systems. Travel and accommodation in London was at his own cost.