Seminar: The Tyranny of Distance Prevails

Abstract

The Tyranny of Distance Prevails Internet technologies have been widely claimed to herald an end to the 'tyrannies of distance' that have proved costly for small remote trade-dependent economies. Consequently support for 'Knowledge Economy' policies such as the current plans for substantial Australian and New Zealand government investment in fast fibre broadband access networks relies in large part upon an economic 'step-change'. New Zealand Communications Minister Stephen Joyce describes the New Zealand UFB network as a means of ending the "tyranny of distance that's hampering businesses here compared to ones in the US that have access to a vast internal market". But will faster internet infrastructures within New Zealand really reduce the disadvantages faced by New Zealand firms? And how big is the economic effect likely to be for those applications most probably to be the ones generating new economic activities? Mark Obren and Bronwyn Howell examine the trade-off between latency (the time delay in accessing data across a network) and the effective bandwidth available as local access bandwidth increases to assess the likely productivity gains available to New Zealand users of web-based applications hosted in a range of overseas locations. The findings suggest that for many applications the tyranny of distance still prevails. Mark Obren is an ICT strategist Massey University Doctor of Business Administration graduate and former researcher at ISCR. He is co-founder and Executive Director of the research and development firm Development Systems Limited. Bronwyn Howell is General Manager of ISCR.