|
Size does matter in the ICT sector
The Courier. Wednesday, September 13, 2006.
Sitting on a state-of-the-art passenger aircraft on the way to the
subcontinent, I am struck by the fact that I have temporarily lost
connectivity to the internet.
No email, no web. While the plane I am on is equipped with
wireless Internet access, it's not operational on this part of the
journey.
The technology available to us today generally means that at some point
somewhere in our travels, we'll get some sort of access somehow.
But our expectations in relation to the immediacy of communications
makes it frustrating when it's not available.
It is interesting that whenever India is mentioned in the context of
ICT, there is an almost immediate assumption that we are talking with
competitors of out own local companies. Same sector yes, but in
terms of sheer scale and capacity, there is simply no comparison.
Our travels this time around take us on a trade delegation to India, a
country with an ICT industry and capabilities second to none.
I often hear the argument that the Indian ICT industry has taken many
jobs away from our own. Many say that like many areas in
manufacturing and clothing, we are unable to compete in either the
sheer size of the operations or the cost.
Ballarat has a small but burgeoning ICT sector of about 60 to 70 small
companies, many of whom own their own innovations and intellectual
property.
The skills sectors of our industry are diverse (see
http://jed.cecc.com.au/clients/bict_new) ranging from programmers to web and
database designers, from communications providers to systems
integrators.
But apart from exceptions such as Neighborhood Cable, IBM and Chariot,
most are small in terms of number of personnel and contracting
capacity. In a global IT market, size matters if only because you
need scale and resources to tackle bigger contracts.
Indian companies with whom we have developed relationships over the
last 18 or so months often have a skilled employee base of 10,000 or
more. Many of them woek almost exclusively with Fortune 500
companies.
The models we continue to discuss with them present a departure from
the normal operational strategies of these companies but present
longer-term diversification of their markets and services.
These models entail, in part, local companies teaming up with their
much larger counterparts at the appropriate time to pursue much larger
contracts than have been previously sought.
In many cases, specific innovations or intellectual property owned by
the local company will be the key focus. But it is also key that
the IP and the contract remain in the local company's hands. (A
lot of Australia's IP has been lost overseas because of the innovator's
inability to commercially exploit it here.)
For us, we provide greater scale to our ICT players while helping to
retain intellectual propertyand head contracts and potentially
increasing employment in the sector.
Some Indian companies have also expressed interest in setting up
operations at the Ballarat Technology Park. This has been a key
part of our IT strategy for the region for some time now.
But clearly tere have to be benefits that flow both ways, including
increased employment in IT for our graduates as well as investment
opportunities. And the companies with whom we are talking have
been chosen primarily because they represent the potential to
complement rather than compete with local companies.
Ross Smith, an entrepreneur who brought the development team of a NZ
company into the Technology Park once coigned the phrase "offshoring to
Ballarat". This small company does precisely that, bringing in
work from very large organisations and developing solutions on the
ground here.
Nor are the models mentioned above simply theory or wishful
thinking. IBM has already begun relationshps with small companies
aimed at leveraging their IP and IBM's scale and expertise.
And cBallarat and the City have just appointed the cluster
facilitationmanager for the Ballarat ICT Cluster project. That
role requires advocacy, coordination and support for the ICT companies
in Ballarat, large and small.
Some of the running, in terms of liaising and negotiating for new
contracts as wellas with potential partners and sub-contractors from
India and elsewhere, has now ben completed.
It'll be up to the cluster members thereafter to determine opportunities that would best suit them.
On landing, I'll be able to check my email via the wifi network or
through wireless access. Not a moment too soon as we will be on
the run until we get home. How the world has changed, even in a
regional town.
Richard Hancock is chairman of cBallarat Ltd and cheif executive officer of the City of Ballarat.
|
|
|
|
