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IPv6,
Internet Leadership, and The Economic Olympics
by Alex Lightman
While the
eyes of billions of people will be focused on the
Athens (athletics) Olympics, a few tens of thousand
others will be focusing on a different kind of Olympics,
an economic Olympics, to see where the thundering
herd of $25 to $50 trillion in liquid capital will
be parked. Inflation is starting to rear its head
after being scarce in Western economies for two decades,
and interest rates are going to rise. 2004 is when
a number of critical inflections will happen globally,
and a key determinant of where the funds will go will
be determined by how the top few tens of thousands
of financial decision makers judge not only the wealth
of nations but also the competence of governments.
There are 260 countries, so in part they are looking
at which governments seem as though they are going
to be best able to adapt to new circumstances.
Business people look at ROI – Return On Investment
– in comparing and contrasting potential investments,
past, present, and future. Governments don’t
use ROI nearly as much, but typically their militaries
get the lion’s share of resources, and have the
highest demands. Militaries use MEF – Mission
Effectiveness Factors – to compare projects and
to judge whether they succeeded or not. Part of the
problem with America’s experience with Iraq is
that no one has sought to find a Mission Effectiveness
Factor that can judge the impact of the US on a week
to week basis objectively. Perhaps America would get
more credit if the value of the Iraqi dinar relative
to the US dollar were a key MEF. The dinar fell from
3 to the US dollar to thousands to the dollar over
the course of conflicts, but since the US occupation/reconstruction
got underway the dinar has stabilized at around 1400.
Is there an MEF by which one can judge government
competence, and thus have a Distant Early Warning
system for governments that are ahead of the pack,
with the pack, and falling behind? I think that the
future will indicate that federal government mandates
for transition to IPv6 are the single best proxy for
government competence. Economically, the Internet
has been the single most important technology in recent
history, with estimates that during the '90s the Internet
accounted for about 1/3rd to 1/2 of economic growth.
Given that IPv6 will very likely result in improvements
in mobility, security, and ad hoc networking over
IPv4, it’s also very likely that IPv6 will result
in accelerated economic growth, increases in stock
values of key companies, and improve the ability of
governments to deliver services.
At this moment, Japan is the top country in government
competence, judged by IPv6 mandates. Both former Prime
Minister Mori and current Prime Minister Koizumi of
Japan have emphasized the importance of mandating
IPv6 in speeches, as keystone of achieving its objective
to be the #1 IT nation. I’ve seen more PowerPoints
about the Japanese government’s focus on leading
in IT outside of Japan than I have any other governments.
(Google “Japan IPv6” or “TAKAHARA Kozo”
to see the presentations, and let me know if any other
government’s compares.)
Korea is close behind in its IPv6 focus, in part because
it has cooperation agreements with Japan, but primarily
because Korea’s government has exhibited tremendous
vision and competence, including the early adoption
of CDMA while hundreds of other governments, lemming-like,
moved to TDMA (GSM). CDMA is the basis for 3G, and
Korea uses, produces and exports more 3G phones per
capita than any other country. Korea also has the
highest per capita penetration of broadband, Wi-Fi
hotspots, and online games. Japan and Korea
head up the first tier of IPv6-competent governments,
the Class A group.
The Department of Defense has mandated transition
to IPv6 by 2008, and is working hard to assist other
US government agencies with their own IPv6 transition,
primarily Dept. of Commerce, Dept. of Homeland Security,
and the security parts of the Dept. of Transportation.
At this point the US federal government would be well-served
to mandate IPv6 for the entire government: and such
an announcement would galvanize the business community
and the media, allowing the US potentially to catch
up with Japan and Korea. The early bird gets the billions:
Qualcomm’s 70 year old founder CEO Irwin Jacobs
announced that the CDMA pioneer’s profits were
up 46%, as QCOM’s market cap was $53 billion.
Think of that: a technology whose rough draft first
patented (spread spectrum) by the first woman to appear
totally nude in a movie (Hedy Lamar) inspired by piano
playing in 1947 is updated for the same improvements
as IPv6 is – security, mobility, and ad hoc networking
– earlier in San Diego, and BOOM there are hundreds
of companies that now trace their lineage (founders
were employees at related companies) to Irwin Jacobs’
companies. Being a protocol pioneer is richly rewarded
on this world.
As it is, US adoption of IPv6 is roughly matched by
Spain, Sweden, Finland, Belgium, Switzerland, Austria,
Taiwan, and Singapore. Australia is close to this
second tier or Class B group, but suffers from outspoken
IPv6 detractors. The European Union, through its $100
billion R & D arm, the European Commission, has
tried to mandate IPv6, but doesn’t have the power
to compel that national government organs do, but
the EC’s efforts are a key reason that Europe
is still in the technology game at all, given the
fierce competition with the US and East Asia in Internet-related
products and services.In the third tier are India,
Canada, Germany, and the UK – about a year or
so behind the second tier. Malaysia and Singapore
are close followers, with governments that are in
a great position to mandate IPv6 as a support for
their national champions.
China puts on a good show about IPv6, but has limited
institutional capacity, R & D, and software design
capabilities. National router champ Huawei is a shameless
copier of US technology rather than a pioneer, and
shutting down 8,700 Internet cafes isn’t the
sort of action of a government serious about leading
in the Internet takes. China has three big assets:
1. CNGI (China Next Gen Internet initiative, a $170
million project that is intended to advance IPv6),
2. An alliance with Japan and Korea, which will probably
enable China to save hundreds of millions in R &
D, and 3. the biggest mobile phone market (25% of
the world’s 1.3 billion mobile users), who can
be switched into a 500 million mobile Internet smart
mob by 2006. This is a huge market, and only the top
mobile IPv6 companies will have a shot at this business.
There is surprisingly little effort on the part of
other governments outside of the first three tiers
and China. Sometimes even one visionary leader can
create an Internet oasis. Sheikh Maktoum bin Rashid
Al Maktoum, UAE Prime Minister and Ruler of Dubai,
has a personal interest in IPv6, and even provided
$250K to organize an IPv6 conference there 26-28 February
2001. Dubai has been running IPv6 since 2001.
Governments should mandate IPv6 if they plan to compete
with the leading economies of the world. While proclaiming
that “IPv6 will end the digital divide”
is politically correct and is pleasing to transnational
government agencies, national governments need to
look out for their own interests first. Perhaps there
will be an athlete in Athens who has the potential
to win his or her event who will slow down so that
instead of winning, all the competitors can have a
tie. Perhaps the Olympic Gold medal can be divided
into multiple pieces, and we can give equal media
attention to many co-winners. No one should bet on
this, though, and investors would be equally foolish
to bet on equal visionary leadership in the next generation
Internet from many governments. Three will win the
world, just like in an Olympics, and the rest will
pay them homage. The winners in IPv6 find themselves
invited to lead in other trillion dollar markets –
4G wireless broadband, digital media distribution
including education, consumer electronics, television/radio
content, ecommerce and online security, and medical
monitoring, among others.
In the real world, the winners in technology adoption
get to add jobs instead of outsourcing them. They
improve their productivity, increase their stock wealth,
and reduce inflation. People around the world should
envy Japanese and Koreans for having governments that
focus on Internet leadership. Personally, I want the
US to be the Internet leader. The key step is for
the federal government to resume its historically
successful role as FBC (First Big Customer) for IPv6,
starting with mandating IPv6 for all federal agencies,
and then encourage states and cities to do the same,
using hundreds of billions in transfer payments to
offer incentives. For every White House speech that
mentions outsourcing or job creation or broadband,
two speeches should mention that the US needs to lead
in IPv6 implementation, because the issues are as
related as DNA strands. This federal mandate is essential
to stay in contention for the Gold medal in the Economic
Olympics.
If the US doesn’t want to lead, there are a few
hundred other countries that would be happy to extend
their lead, or to catch up. Mandating IPv6 is the
single best way for the US, and any government, to
signal that it can see beyond the day to day drama
and improve the ultimate infrastructure that enables
everyone to be ever more productive and connected.
EXCERPT from
6Sense May 2004 edition
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