Is NZ an innovation hub, or a wild west for new technology?
Friday, 20 April 2018
Superfad hosts KATIE KENNY and LAURA WALTERS have spent the past seven weeks exploring the weird and wonderful world of trends. But the podcast series has highlighted how New Zealand's regulation apathy is turning it into a wild west for new technology. You can listen to the podcast on iTunes or Android.
New Zealand is often touted as an innovation hub at the bottom of the world, but in recent times those charged with keeping consumers safe in an ever-changing technological world seem to be dragging their feet.
In Stuff's seven-part podcast, Superfad, we've explored the weird and wonderful world of trends; products, ideas and habits that surge into our collective conscience — and frequently burn out just as fast.
The series highlights the eagerness of Kiwis, and their international consumer counterparts, when it comes to adopting new technologies. Things like cryptocurrency, DNA mapping, and vaping have experienced massive growth in popularity during the past 12 months, and in many cases the government and consumers are grappling to understand how the technology works, and the associated risks.
SMALL SHOULD MEAN AGILE
With a population below five million, New Zealand has the ability to be agile, adapt to new technologies and innovate in a way that means consumers can get the most out of new products and services.
In the past, we've been used as an international testing ground for new technology, such as Eftpos in the 1980s.
More recently, others to user-test here include Facebook, which trialled a Snapchat competitor and their new Marketplace function; Microsoft which tested website-creator app Sway; and Domino's Pizza, which teamed up with drone business Flirty to bring Kiwis the first aerial-delivered pizza. New Zealand was also among the first to receive the game PokemonGo.
While we might get new technologies early, that doesn't necessarily mean we're good at spotting potential risks and opportunities. Throughout the Superfad series, it became apparent those in charge of policy and regulation have been falling behind. And with the increasing rate of advancements, they have little hope of catching up.
* Listen to the Superfad podcast on iTunes or Android
DROPPING THE BALL ON NEW TECH POTENTIAL
In the case of cryptocurrency, most major banks, the central bank, and the Department of Internal Affairs, have been slow to react. The Reserve Bank of New Zealand's first significant paper on the topic was released last week. (The concept of bitcoin was introduced in 2008.)
Kiwibank, Westpac, ANZ and BNZ, all declined to be interviewed as part of Superfad, saying they didn't have an employee assigned to this area. They did say they assessed customers' use of virtual currencies on a case-by-case basis, but some trading — especially for those trading on behalf of others — breached current money laundering legislation.
Dawie Oliver, Westpac's chief information officer, last month took the stage at AI-DAY, the country's premier artificial intelligence event, to talk about automation in banking services. Following his presentation, host Dr Michelle Dickinson thanked Oliver and asked, jokingly, when Westpac would allow her to buy and trade bitcoin. Oliver laughed, but didn't respond.
Stuff technology columnist, Richard MacManus, has written about how it feels like ordinary Kiwis are missing out on a revolution: 'Instead of supporting bitcoin, our banks are closing down accounts that trade in it.'
University of Auckland business school associate professor Alex Sims agrees, saying New Zealand has 'dropped the ball'.
'We're slow. Really slow. I've had people contact me from overseas saying New Zealand prides itself on being nimble and agile, what's going on?'
While other countries have been leveraging the potential of the blockchain technology behind cryptocurrency, New Zealand, again, seems to be twiddling its thumbs. Estonia, the tiny post-Soviet nation, has used blockchain to build the most digitally advanced society in the world. Its government is virtual, borderless, and secure and its citizens have state-issued digital identities, which allow them to provide digital signatures when using e-services.
Late last year, the Edmund Hillary Fellowship wrote a paper, co-authored by a number of blockchain experts, including Coinbase co-founder Fred Ehrsam and Mark Pascall of blockchainlabs.nz, with recommendations for regulators.
The paper said regulators should move quickly to create a legal framework for cryptocurrency and blockchain so the country can attract overseas entrepreneurs and investors. However, Pascall says it was met with little interest from politicians.
UNDERSTANDING NEW TECHNOLOGY
This issue isn't specific to cryptocurrency. It was again highlighted in the Superfad episode on direct-to-consumer DNA test kits. Today, thanks to these genetic tests, we can have parts of our DNA analysed for about $100.
About 1 in 25 American adults now have access to personal genetic data, according to MIT Technology Review. Genealogy company Ancestry.com is the largest player — they say they have 7 million DNA samples in their database, with 'tens of thousands' of those from New Zealand — followed by 23andMe, which has more than 3 million.
But Wellington-based Dr Katherine Neas, clinical leader of the Genetic Health Service central hub, says the technology isn't just outpacing the knowledge of consumers but also many health professionals.
'It's quite complex information and the way it comes back to the consumer doesn't necessarily give them the idea it's so complex. Sometimes you can read the information and become quite concerned about your risk of a certain health problem and actually the scientific information wouldn't back up that degree of concern.'
Rather than telling people to avoid the tests, which she describes as 'a part of modern life', she is calling for better education around genetics and genomics, so people can 'engage with the technology safely'.
GLOBAL PRIVACY WOES
As well as a lack of education and understanding about this technology, there are questions to be asked around how companies could go on to use the personal information gathered. For example, could they sell consumers' health information to insurance companies, affecting premiums?
Massey University marketing expert Valentyna Melynk says increasingly, consumers are drawn to products and services that have the 'five ps': purpose, pride, partnership, protection, and personalisation.
The most recently added p: personalisation, is what gives a product or service the edge. Personal behavioural and demographic data is used to tailor the product or service to the consumer's unique needs and wants. But there's a flip-side.
The ever-growing 'internet of things' raises similar issues around privacy protection, Melynk says. This issue is currently under the spotlight in the wake of a privacy scandal surrounding Facebook.
Lawmakers and regulators have been questioning the social media giant after it was revealed it improperly shared personal data of tens of millions of users with a political consultancy. Even after founder Mark Zuckerberg was hauled in front of Congress to testify, Facebook has continued to flout international privacy laws.
A Privacy Bill introduced this year promises to modernise the New Zealand's existing legislation, repealing and replacing the Privacy Act of 1993. However, it's fair to say it hasn't been a priority for the new government. (The MP in charge of the bill, Justice Minister Andrew Little, in response to questions on the issue, says: 'It's been a while since I've seen the content of the Privacy Bill, I need to have another a look at it.'). And the power of the Privacy Commissioner will always be limited when dealing with international conglomerates.
GETTING IN THE GOVERNMENT'S EAR
It's unlikely the lack of regulation around new technology is due to a lack of awareness. After all, surveillance capitalism is the dominant business model in Silicon Valley. And some firms have gone out of their way to influence local policy by hiring lobbyists, usually referred to as public policy and government relations specialists or consultants.
Last year, Uber hired a New Zealand-based lobbyist in an effort to smooth its image and calm regulatory controversy. (The company hired Mitch Cooper — formerly the lobbyist for Vodafone.) Google also has a local government relations manager. Other companies use local lobbying firms, rather than hire an internal specialist.
But it's not just the disrupters trying to get their point across, traditional service providers — like taxi companies — also lobby lawmakers. While those charged with making the decisions are being hit from all sides, it's not hard to see why they're taking their time to implement new regulations.
BIG BUSINESS KNOWS ITS AUDIENCE
Businesses looking to leverage new technology have a gift when it come to influencing the market through advertising.
For example, marketing of e-cigarettes, or vaping, is not regulated in New Zealand — there are no standards for labelling or other forms of advertising. Some worry this will normalise smoking, especially among teens who are already taking advantage of the discrete devices including those sold by tobacco giant Philip Morris.
The advertising models used have been likened to those used by tobacco giants in the 1960s. Companies pay big money to make their products look cool by employing the likes of 21-year-old YouTuber Donny Smokes, known as the modern-day Marlborough Man, with his 21,000 followers. The social media influencer earns more than $1000 a month reviewing products.
Dr Stuart Jones, a respiratory physician and the New Zealand branch president of the Thoracic Society of Australia and New Zealand, says the devices are potentially healthier than traditional cigarettes, but aren't without risks.
He worries juices — the fluid used in vaporizers to create vapour — with flavours such as 'Unicorn Milk' and 'Strawberries and Cream' are designed to appeal to young people, and will create a new generation of nicotine addicts.
LEGISLATION NOT FIT FOR PURPOSE
Again, the Government is aware of the issues, but has been slow to act.
Last year, the former government said it would be legalising liquids and devices with nicotine, with 'appropriate controls'. It planned for new regulations to take effect in mid-2018. But the new government has returned to the process of gathering information and research, before taking a proposed plan to Cabinet.
Associate Health Minister Jenny Salesa, who's in charge of smoking, nicotine, and tobacco policy, says she's considering her options and has asked the Ministry of Health to advise her on the issue. 'From the evidence I've seen, especially for adults, vaping seems to be a quit tool that works. However, one of the reasons why we're still considering our options is it's really inconclusive, especially for young people.'
She hasn't provided an updated timeframe on when any regulations would take effect.
THINKING OF THE FUTURE
Stephanie Pride, a professional futurist and a founder of StratEDGY, a consultancy which provides a range of 'anticipation, change and adaptation services', has worked with clients and partners in the public, private and not-for-profit sectors, as well as with international futures projects.
To identify which trends are likely to go from being niche to widespread, she looks for those which represent an intersection of technology, people's values, and priorities.
'When people's values and priorities shift, that's when you get a shift in the products and services they want and need. Looking at trends is often pointless if you don't understand the underlying drivers.'
Having been in the field for 16 years, she's recently noticed an uptick in demand for her services. She attributes this to large-scale upheaval of those underlying drivers.
'There are so many different technological developments at the moment coming together to be game changers.
'We've moved from a period that was relatively stable, to now, the confluence of shifts in economic, political, environmental systems and policies basically mean people are much more aware of volatility and the contingency of current arrangements.
'So, that's made people more aware of the need to be able to think of the future.'
Recent appointments such as the Ministerial Advisory Group for the Digital Economy and Digital Inclusion, chaired by The Mind Lab founder Frances Valintine, and the role of New Zealand's first Chief Technology Officer, to help drive a forward-looking digital agenda, suggest the government is trying new approaches to move faster.
In the meantime, those operating in unregulated spaces will continue to make hay while the sun shines, and our future society will rely on the little people to make good, informed choices.
Superfad is a seven-part podcast series, brought to you by Skoda. You can listen on iTunes and Stitcher. Join the Superfad group on Facebook.