Eric Schmidt spoke on the first day of LeWeb. His talk was interesting, although nothing fantastic, and now that I’ve had some more time to think about the things he said, one thing really stuck out.
Schmidt talked about the future of Europe. Specifically, he said that Europe will not become a low-wage manufacturing group of countries. That’s rather obvious, yes. But more importantly, he said that “the Internet is the core source of future growth for Europe”. That’s a huge statement. Schmidt believes that Europe’s future lies in its ability to harness the Internet and produce value within it.
This really got me thinking. New Zealand, while we have lots of natural resources, is similar to Europe because we aren’t willing to exploit those natural resources. That leaves us with two real growth routes. One is using sustainable natural resources and exporting those, and the other is innovation. To me, it’s obvious that innovation is the route we need to take. Sir Paul Callaghan has spoken extensively about this. Even with sustainable natural resource use, the amount that we can export is completely finite. But through innovation, we can create an infinite amount of value, and export it worldwide.
So if we do decide to focus on innovation (and entrepreneurship), what type should we focus on? This is where what Schmidt says comes in. I believe – and so does Eric Schmidt – that the Internet is the only viable route over the long-term. In New Zealand, we are obviously held back by our physical location. It costs us a lot to ship anything physical, even if not natural resources. But with the Internet, we can produce something, and for an extra cost of zero dollars we can ship it to the entire world through the Internet.
I fundamentally believe that for New Zealand, even more so than Europe, the Internet is the only viable source of growth in the long-term.
Schmidt also pressed one other point. He said that “Silicon Valley needs a competitor”. I’m going to dream here – but why couldn’t New Zealand become that competitor? We pride ourselves on “Kiwi ingenuity”, and yet we have a surprisingly small number of Internet success stories (especially international ones). We are starting to get more tech focussed, with working spaces like the Biz Dojo and VC’s like WebFund. We also have a strong university culture within cities which can encourage innovation. But we need to show everyone in New Zealand that innovation in the Internet is the way we reach the entire world.
It’s an obvious thing to most New Zealanders to come up with an idea and business that focusses on natural resources. So we need to change that mentality and encourage Internet entrepreneurship in order to achieve sustainable growth.
The question is then: how do we best go about encouraging Internet innovation and entrepreneurship in New Zealand? I’ll leave that question open to all of you guys – let’s see what we can come up with.[Picture Source]