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E-commerce Summit Rams Home The Significance Of R&D 2 November 2000 Edition
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One of the keynote speakers at the Government's ecommerce summit currently being held in Auckland is John Sifonis, a director of Internet business solutions at Cisco.

One very tiny part of what Mr Sifonis said should have rung huge alarm bells with government.

Cisco is one of the biggest technology providers to the new economy and in its 2000 Annual Report, declared sales of almost US$19bn with a net income of US$2.7bn.

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So what did Sifoni say that was so earth-shattering in its implications?

Well most people think of Cisco as a manufacturer of the switches and routers that control the flow of traffic on the Internet. However, that's not the way Sifoni sees the company. He told the audience that he considered Cisco to be "a research and development company".

The surprising fact is that Cisco only owns two of the 35 factories that manufacture its equipment! Cisco actually does bugger-all manufacturing itself.

Government should take on board the fact that the current tax regime, as it applies to R&D activities in New Zealand, is patently hostile towards companies like Cisco.

Why are we not moving immediately to encourage the formation and development of companies focused on R&D? If Cisco can turn R&D activities into a US$19bn a year business then shouldn't we be working extremely hard to develop an environment that is friendly to such activities?

The other new-economy juggernaut, Microsoft, is also primarily an R&D company and our tax regime would similarly disadvantage them -- which is probably why they've turned to countries such as India.

A Major Hurdle For Small E-commerce Ventures
If the government thinks we're going to solve all NZ's woes by pushing NZ businesses into online commerce then they may well be sorely disappointed.

On TV1's breakfast programme this morning there was someone lamenting the difficulty they were having in getting their website listed in the world's most popular web directory -- Yahoo! It seems they've just discovered what I've been telling people for years -- just being online isn't enough.

When you launch a website or ecommerce venture, you become just another tree in a huge (and still growing) forest of websites.

Which leads me to...

The Aardvark E-Commerce Series?
I received a lot of feedback yesterday on the suggestion that I might run a series on e-commerce.

While most of it was positive -- there were some who thought it better that I reserve this column for items of a more newsworthy and topical nature.

As a result, I'm weighing up the option of producing a separate publication for SMEs (Small to Medium-sized Enterprises) who are looking to extract maximum benefit from the Net as a sales and marketing tool.

While I'd like to give this material away for free -- I may have to seek a sponsor or charge for it because it will be a significant undertaking to create and maintain such a publication to a level which ensures it's always current and accurate.

And it won't come out before the first edition of the Weekly -- which, you'll be pleased to know, is almost finished!

The Weekly
Yes, I know the first edition of the weekly has yet to appear -- but I'm still working on it.

Hopefully (if current leads pan out) it will include a very interesting expose' into the astoundingly bad behaviour of a group of local "new economy" company directors (some of who are also on the board of a public company). Just how competent and ethical are the managers of some of our hi-tech public companies?

If you want to receive the "all new" Aardvark Weekly in PDF format by email then please use the contact form to leave your email address.

You'll get a confirmation email within a day or two and you won't receive anything else unless you respond to that email to confirm your opt-in status.

As always, email addresses submitted for the purposes of receiving the Weekly will not be given away, sold, bent, spindled, mutilated or otherwise abused and you will not receive anything other than the weekly as a result of signing up.

As always, your feedback is welcomed.

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