NOTE: CAPTIONS COMPUTER GENERATED USING OCR FROM DVB-SUBPICTURES. CA. COPYRIGHTABLE 2014 I NOTE: CAPTIONS COMPUTER GENERATED USING OCR FROM DVB-SUBPICTURES. CA. KIA ORA. GOOD EVENING. WELCOME TO 3RD DEGREE. TONIGHT - DRIVERLESS CARS. NOTE: CAPTIONS COMPUTER GENERATED USING OCR FROM DVB-SUBPICTURES. CA. RIGHT NOW, WE'RE GOING ABOUT 4OMPH, 42MPH, AND YOU'LL SEE BRAKE LIGHTS UP AHEAD. PEOPLE TODAY ARE BORED OF THEIR DRMNG. THEY GET ON THEIR CELL PHONE. AND A MORE FRIGHTENING VISION OF THE FUTURE WITH NO ANTIBIOTICS, NO WAY TO COMBAT INFECTION. THE EXPERTS SAY THAT WE'VE GOTABOUT 10 YEARS LEFT. IN REALITY, SOME PATIENTS ARE ALREADY THERE. ALSO, THE MAN WHOSE CREATED... WELL, IT COULD BECOME A SORT OF NZ FACEBOOK. I MEET THE KIWI VERSION OF STEVE JOBS. I YOU COULD SOON BECOMEA BILLIONAIRE. MEET THE KIWI VERSION OF STEVE JOBS. YOU COULD SOON BECOMEA BILLIONAIRE. UH, YEAH. I MEAN THAT WOULD BE REALLY COOL. MEET THE KIWI VERSION OF STEVE JOBS. THE PRACTICAL SIDE OF IT IS YOU CAN NEVER GETA DEAL WITH A TRADESMAN AGAIN. OK, OUR FIRST STORY TONIGHT IS ABOUT THE FUTURE, AND IT'S NOT THAT FAR AWAY, ACTUALLY. JUST AROUND THE CORNER. LOOK AT THIS - DRIVERLESS CARS. THEY'RE BEING TESTED RIGHT NOW, AND YOU COULD SOON BE BEHIND THE WHEEL OF ONE OF THESE THINGS. SARAH HALL'S JUST BEEN IN SAN FRANCISCO, WHERE SHE'S SEEN THE CARS THAT ARE BEING DEVELOPED, AND SHE'S TALKED TO THE MANUFACTURERS. SHE'S EVEN TAKEN TO THE CITY'S CROWDED FREEWAYS IN ONE OF THEM, WITH NO HANDS ON THE WHEEL. Icunuous MUSIC I ICARSZOOIH IT'S ONE OF THE STRANGEST FEELINGS I'VE EVER EXPERIENCED - HURTLING DOWN A FREEWAY WITH A CAR IN CONTROL. OH MY GOD, YOU'RE NOT DRMNG. (LAUGHS) SO NOW WE'LL JUST GO THROUGH THE TRAFFIC JAM. IT'S A FEELING WE WILL HAVE TO GET USED TO. DRIVERLESS CARS ARE COMING, AND THEY'RE COMING SOON. THIS IS TECHNOLOGY THAT IS GLOBAL, AND IT IS TRULY GONNA CHANGE HUMANITY FOR THE BETTER. THIS IS NO LONGER SCIENCE FICTION PROJECT; THIS IS A SERIOUS DEVELOPMENT EFFORT ACROSS THE AUTOMOTIVE INDUSTRY. Lewslcl IN FACT DRIVERLESS CARS ARE EXPECTED TO BE EVERYWHERE WITHIN THE DECADE. IT'S THE BIGGEST CHANGE TO THE CAR INDUSTRY SINCE, WELL, CARS WERE INVENTED. I HUXLEY coome OFF. AUTO DRIVE. I I WOMAN'S VOICE: AUTO DRIVE ENGAGED. I NOW THAT IT'S NO LONGER SCIENCE FICTION, THOSE BEHIND THESE CARS FACE A MINEFIELD OF COMPLICATIONS. KITT: I DON'T LIKE BEING ORDERED ABOUT. I ARE YOU SERIOUS? I JUST HOWARE THESE CARS GOING TO WORK? WHAT ABOUT THE LEGAL AND INSURANCE ISSUES? AND WHAT ABOUT PUBLIC ACCEPTANCE? AFTER ALL, MOST OF US DON'T LIKE THE IDEA OF A MACHINE BEING IN CONTROL. AND WHAT ABOUT PUBLIC ACCEPTANCE? SELF DRIVE! IDEA OF A MACHINE BEING IN CONTROL. AND WHAT ABOUT PUBLIC ACCEPTANCE? SELF DRIVE! UNABLE TO EXECUTE. AND WHAT ABOUT PUBLIC ACCEPTANCE? SELF DRIVE NOW! UNABLE TO EXECUTE. AND WHAT ABOUT PUBLIC ACCEPTANCE? SELF DRIVE NOW! MALFUNCTION. UNABLE TO EXECUTE. SO IN SAN FRANCISCO THE CAR MANUFACTURERS, INSURERS, TRANSPORT OFFICIALS AND DESIGNERS HAVE GATHERED TO TRY TO OVERCOME ALL THOSE OBSTACLES AND MAKE DRIVERLESS CARS A REALITY. ANY REVOLUTIONARY OR DISRUPTIVE TECHNOLOGY HAS TO GO THROUGH A PHASE OF PUBLIC ACCEPTANCE. IT'S LIKE THE INTERVIEW THEY DID WITH THE 100-YEAR-OLD MAN, AND THEY ASKED HIM, 'YOU MUST HAVE SEEN A LOT OF CHANGES IN YOUR LIFE,' AND HE SAID, 'YES, AND I WAS AGAINST ALL OF THEM.' THIS IS, I THINK, ONE OF THE BEST EVENT WE'VE HAD SO FAR. MICHAEL TOSCANO HAS BEEN WORKING ON UNMANNED TECHNOLOGY FOR MORE THAN 30 YEARS AND IS THE CURRENT PRESIDENT OF UNMANNED VEHICLE SYSTEMS INTERNATIONAL. HE SAYS DRIVERLESS CARS ARE AN INEVITABILITY, BECAUSE HUMANS ARE JUST NOT THAT SAFE BEHIND THE WHEEL. WHEN YOU LOOK AT THE AUTOMOBILE ACCIDENTS, ANYWHERE BETWEEN 87% AND 95% OF ALL ACCIDENTS ARE CAUSED BY THE HUMAN BEING. SO FROM AN ENGINEERING STANDPOINT, YOU STOP AND SAY, 'BUT WHERE'S THE WEAK LINK IN THE SYSTEM, OR WHAT IS THE THING I SHOULD WORK ON?' IT'S US. BECAUSE WE ARE THE ONES THAT ARE CAUSING THESE FATALITIES THAT TAKE PLACE. DO YOU THINK WE'RE READY TO GIVE CONTROL OVER TO, ESSENTIALLY, A MACHINE? RIGHT NOW THERE IS A, UH, I'D SAYA NATURAL RESISTANCE TO HAVE A MACHINE INJURE OR KILLA HUMAN BEING. AND EVEN IF IT STATISTICALLY SHOWS THAT IT'S MUCH SAFER, THERE STILL IS, AT THIS POINT IN TIME, A RESISTANCE TO THAT. HOW SAFE IS SAFE ENOUGH? IS IT OK TO BE AS SAFE AS HUMAN DRIVERS? DO WE NEED TO BE SIGNIFICANTLY SAFER THAN HUMAN DRIVERS BEFORE PEOPLE WILLACCEPT IT? UM, ARE PEOPLE OK WITH THE STATISTICS TO SAY, WELL, NOW WE'VE REDUCED FATALITIES IN HALF'? OR WILL THEY NOT BE QUITE AS ACCEPTING OF THAT IF THOSE FATALITIES ARE CAUSED BYA MACHINE ERROR? HERE AT ONE OF AMERICA'S BEST UNIVERSITIES, STANFORD, THE ENGINEERING DEPARTMENT IS ONE OF THE MANY PLACES AROUND THE WORLD TRYING TO MAKE DRIVERLESS CARS A REALITY. WE'VE GOT THE POWER SUPPLIES THAT WE BEEFED UP HERE AND A NEW GPS SYSTEM. THE TEAM, LED BY PROFESSOR CHRIS GERDES, ARE CARRYING OUT NUMEROUS TESTS ON BEHALF OF CAR MANUFACTURERS. THEY KNOW THEY NEED TO GET THIS TECHNOLOGY RIGHT. THE CARS HAVE TO BE HANDLE A LOT OF DIFFERENT SITUATIONS, AND THIS IS WHY IT'S A CHALLENGING PROBLEM TO GO PARTICULARLY THRU CITIES. OUR EYES AND OUR BRAINS ARE REALLY FANTASTIC AT BEING ABLE TO DETERMINE WHAT IS THAT. WHAT IS THAT FLASH OF MOTION? IS THATA CHILD? IS ITA PAPER BAG? WHAT DO I HAVE TO DO? THAT'S ONE OF THE CHALLENGES - TO GET THE CARS ABLE TO HANDLE THESE SITUATIONS AS WELL AS WE CAN. ISODBREMUSICI STANFORD IS STUDYING THE REACTIONS OF RACE CAR DRIVERS TO UNDERSTAND HOW TO CONTROL DRIVERLESS CARS IN A CRITICAL SITUATION. THEY NEED THE DRIVERLESS CAR TO BE AS GOOD AS THE BEST HUMAN DRIVERS ON EARTH. I THINK ONE OF THE THINGS THAT HAS SURPRISED US IS EXACTLY HOW GOOD RACE CAR DRIVERS ARE WHEN YOU LOOK AT THE ABILITY OF THE HUMAN BEING TO GET TO THE PHYSICAL LIMITS OF WHAT THE CAR IS CAPABLE OF. THEY'RE REALLY FANTASTIC. SO AT THIS STAGE, MAN IS AHEAD OF THE MACHINE, BUT MAYBE FOR NOT MUCH LONGER. WELL, MAN CERTAINLY HAS SOME ADVANTAGES - THE BEST OF US. THE AVERAGE DRIVER, NOT so MUCH, AND THE DISTRACTED DRIVER, CERTAINLY SO HOW ARE THESE CARS GOING TO WORK? WHAT TYPE OF TECHNOLOGY WILL WIN OUT IN THE END? AT THE SAN FRANCISCO CONFERENCE, COMPANIES ARE ALL TRYING TO SELL THEIR BRAND OF TECHNOLOGY - FROM GPS, TO LASERS, TO SATELLITES AND RADAR. DAVID HALL INVENTED THE LASER THAT SIT ATOP THE NOW FAMOUS GOOGLE DRIVERLESS CAR. TELL ME, DO YOU THINK THAT DRIVERLESS CARS ARE GONNA BE A MIXTURE OF CAMERAS AND SENSORS AND INVENTIONS LIKE THAT? WHERE DO YOU SEE IT GOING? WELL, I LIKE THE GOOGLE MODEL, WHICH JUST USES MY SENSOR AND A FEW OTHERS BECAUSE MY SENSOR DOES THE WHOLE JOB AND NEVER COMES UP WITH THE WRONG ANSWER. SO IT CAN TELL EVERYTHING THAT'S GOING ON AROUND IT. EVERYTHING THAT'S GOING ON AROUND IT. IT DOES 360 DEGREES, AND YOU DON'T HAVE TO PAY EXTRA FOR THE BACK... F (LAUGHS) FOR THE BACK VIEW? H HAVE TO PAY EXTRA FOR THE BACK... (LAUGHS) FOR THE BACK VIEW? YEAH, IT'S ALL FREE. I AT MAGNA ELECTRONICS, WE DEVELOP... l OTHER COMPANIES ARE PUSHING CAMERAS. CHRIS VAN DAN ELZEN FROM MAGNA TECHNOLOGIES HAS DEVELOPED A SYSTEM THAT USES JUST ONE CAMERA AFFIXED TO THE BONNET. WHEN WE WENT OUT FOR A DRIVE, THAT SINGLE CAMERA WAS ENOUGH FOR IT TO READ WHAT THE OTHER CARS WERE DOING. RIGHT, NOW WE'RE GOING ABOUT 40MPH, 42MPH, AND YOU SEE BRAKE LIGHTS UP AHEAD. THIS IS THE PART WHERE PEOPLE TODAY ARE BORED OF THEIR DRIVE AND GET ON THEIR CELL PHONES. SOMETHING LIKE THAT. ARE BORED OF THEIR DRIVE AND GET ON THEIR CELL PHONES. SOMETHING LIKE THAT. AND SO YOU IMAGINE THAT WILL BE ON THE MARKET IN THE NEXT FEW YEARS - THAT WHEN A CAR IS DRMNG THROUGH HEAVY TRAFFIC, IT CAN GO TO CRUISE CONTROL, AND YOU CAN BE ON THE PHONE AND DOING WHATEVER YOU WANT. CONTROL, AND YOU CAN BE ON THE PHONE AND DOING WHATEVER YOU WANT. RIGHT. THE FIRST DRIVERLESS CARS WILL BE HYBRIDS. YOU WILL DRIVE THEM MOST OF THE TIME, BUT THE CAR CAN TAKE OVER AT THE PUSH OF A BUTTON - PERFECT FOR THOSE STUCK IN HEAVY TRAFFIC. WHEN YOU LOOK AT HOW MUCH TIME WE SPEND JUST IN COMMUTING AND THE LOST PRODUCTMTY, IT'S IN THE BILLIONS OF HOURS AND THE BILLIONS OF DOLLARS WHICH GETS ME TO - IS THIS JUSTA CUNNING PLAN BY CORPORATE AMERICA TO KEEP US WORKING ALL THE TIME? WE HAVE TO WORK IN OUR CAR WHILE WE'RE COMMUTING. WELL, WORK COULD BE ONE OF THOSE THINGS, BUT YOU ALSO COULD BE SLEEPING; YOU ALSO COULD BE DOING ENJOYABLE THINGS THAT YOU FIND STIMULATING. IUPBEATIIJSIOI KEEPING US BUSY DURING OUR WORK COMMUTE IS ONE OF THE REASONS SOME PEOPLE BELIEVE GOOGLE HAS GONE AWAY FROM ITS CORE BUSINESS AND ENTERED THE DRIVERLESS CAR RACE. GOOGLE MAKES MONEY WHEN YOU'RE GOOGLING THINGS. AND IF YOU CAN DO THAT FROM YOUR CAR WHILE COMMUTING, ALL THE BETTER FOR THEM. I I LOVE THIS! I HOW FAR AWAY, REALISTICALLY, DO YOU THINK DRIVERLESS CARS ARE FROM BEING ON THE ROAD? WELL, YOU'LL SEE ME DRMNG AROUND IN MY DRIVERLESS CAR BY THE END OF THIS DECADE. WHETHER OR NOT YOU CAN BUY ONE IS AN INTERESTING LOGICAL, LEGAL PROBLEM. BECAUSE IT'S FRAUGHT WITH LEGAL PROBLEMS, ISN'T IT? INTERESTING LOGICAL, LEGAL PROBLEM. I < (LAUGHS) I I DON'T KNOW HOW IT IS IN THE WORST- IT CAN'T BE AS BAD IN THE REST OF THE WORLD AS IT IS HERE. WE MAY ACTUALLY HAVE TO JUMP OFFSHORE IF WE ACTUALLY WANNA DO SOME TESTING. THAT'S BECAUSE OF THE PANDORFUS BOX OF INSURANCE ISSUES - WHO IS TO BLAME IF ONE OF THESE CARS KILLS SOMEONE? THE LITIGIOUS UNITED STATES MAY NOT BE THE BEST TESTING GROUND FOR THESE CARS. THAT HONOUR IS LIKELY TO GO TO EUROPE. IEEGETICPOPSONGI THAT'S RIGHT, VOLVO PLANS TO LAUNCH A TRIAL IN GOTHENBURG, SWEDEN IN JUST OVER TWO YEARS, WHERE IT WILL PUTA HUNDRED OF THESE CARS ON THE ROAD IN THE WORLD'S FIRST WIDESPREAD PILOT. RIGHTLY OR WRONGLY, VOLVO DOES PROBABLY HAS THE BEST REPUTATION OF ANY CAR MANUFACTURER WHEN IT COMES TO SAFETY. I MEAN, YOU CAN'TAFFORD TO GET THIS WRONG, CAN YOU? WHILE VOLVO'S CARS ARE READY FOR TESTING, MAJOR CITIES AROUND THE WORLD ARE ALSO GETTING READY. THE UK GOVERNMENT HAS GIVEN THE GO-AHEAD FOR TESTING TO BEGIN IN THREE CITIES THIS JANUARY. IT SEEMS, LIKE IT OR NOT, THE DRIVERLESS REVOLUTION IS HERE. IS ITA RACE? IT SEEMS, LIKE IT OR NOT, THE DRIVERLESS REVOLUTION IS HERE. IS ITA RACE? A FEW YEARS AGO, I WOULDN'T HAVE SAID IT WAS A RACE. BUT NOW, I THINK WHEN WE TALK WITH OUR COLLEAGUES IN THE INDUSTRY, YOU REALLY DO GET THAT SENSE. COMPANIES FEEL THAT THIS IS CLOSE TO MARKET, AND THEY WANNA BE AMONG THE FIRST TO BRING IT TO MARKET. SO THE GLOBAL RACE IS NOW ON, AND NZ COULD ALSO BECOME A CENTRE OF FUTURE DEVELOPMENT FOR THESE DRIVERLESS CARS BECAUSE WE DON'T HAVE LOT SO LITIGATION, DO WE? YEAH, WE ALSO HAVE A HUGE VARIETY OF DIFFERENT ROADS. BUT I'M NOT ENTIRELY SURE HOW I FEELABOUT THIS. DOES IT MAKE IT SAFER FOR PEOPLE, OR MORE LIKELY FOR PEOPLE TO DRINK-DRIVE, FOR EXAMPLE? YEAH, THERE'S ALSO... AND IF YOU THINKABOUT IT, POTENTIALLY, FEWER NOSE-TO-TAILS. BUT IF THERE IS A NOSE-TO-TAIL, WHOSE FAULT IS IT - THE CAR'S, MAYBE THE OTHER DRIVER'S? SO HARD TO KNOW. IT'S THE CAR'S FAULT. WHOSE FAULT IS IT - THE CAR'S, MAYBE THE OTHER DRIVER'S? SO HARD TO KNOW. IT'S THE CAR'S FAULT. RIGHT. COMING UP, WE LOOK AT A FUTURE WITHOUT ANTIBIOTICS I AND WHATS BEING DONE To I=lx IT. I THEY'RE ALL ALIVE, AND WE CAN SEE THAT BECAUSE THEY'RE ALL GLOWING. AND THEN AS SOON AS I HIT THEM WITH SOMETHING THAT'S GOING TO KILL THEM, THEN YOU'LL SEE THE LIGHTS GO OUT. AND THEN AS SOON AS I HIT THEM WITH SOMETHING THAT'S GOING TO KILL THEM, THEN YOU'LL SEE THE LIGHTS GO OUT. SO, SHALL WE GIVE THEM A SPRAY? I At Burger King, we value value, I which is why you can get a freshly made burger, fries, a drink and a sundae all from just $5. And because taste is king, we've added our tasty new chicken nugget burger to the Stunner meal range just for you. WELCOME BACK. IN THE OLD DAYS, A MINOR INJURY OR INFECTION WOULD OFTEN RESULT IN DEATH. AND NOW THE WHO - THE WORLD HEALTH ORGANISATION - IS WARNING THAT THAT WORLD IS UPON US ONCE MORE. YEAH, SO MINOR SURGERY WILL BE A RISKY BUSINESS, AND IT COULD ACTUALLY KILL YOU - NOT BECAUSE OF THE SURGERY ITSELF BUT BECAUSE OF THE INFECTION THAT SIMPLY, SIMPLY CANNOT BE TREATED. SO WHAT ARE WE DOING TO COUNTER THIS POTENTIAL CATASTROPHE - THIS, WELL, NIGHTMARISH VISION OF THE FUTURE - I A FUTURE WITHOUT ANTIBIOTICS? I WELL, PAULA PENFOLD HAS BEEN FINDING OUT. Irsnsewsucl <i>I</i> SIREN vwluLs I < WHAT DOES A WORLD WITHOUT ANTIBIOTICS LOOK LIKE? SO ITS LIKE TURNING THE CLOCK BACKA HUNDRED YEARS, I GUESS. THE WHO CALLS ITA PROBLEM SO SERIOUS IT THREATENS THE ACHIEVEMENTS OF MODERN MEDICINE. WE'RE GETTING MORE AND MORE RESISTANT BACTERIA INFECTING PATIENTS IN NZ. A POST-ANTIBIOTIC ERA IS NO LONGER AN APOCALYPTIC FANTASY BUT A VERY REAL POSSIBILITY FOR THE 21 ST CENTURY. A FUTURE WHERE VERY MINOR SCRAPES, VERY MINOR INJURIES, MINOR SURGERIES CAN LEAD TO DEATH. WORLD LEADERS ARE WORRIED, RANKING THE DANGER ALONGSIDE TERRORISM. WE HAVE TO GRIP IT GLOBALLY, BECAUSE THIS IS A PROBLEM THAT'S GONNA AFFECT EVERY COUNTRY IN THE WORLD. THERE ARE ALREADY PROBLEMS WORLDWIDE. IN SOUTH AFRICA, THEY'RE DEALING WITH A DEADLY STRAIN OF TUBERCULOSIS THAT WON'T RESPOND TO ANY KNOWN ANTIBIOTICS, SO PATIENTS ARE SENT HOME TO DIE. IN AUSTRALIA THERE'S A NEW SEX SUPERBUG -A MULTIDRUG-RESISTANT STRAIN OF GONORRHOEA. AND HERE IN NZ, MRSA IS ON THE RISE - 78% MORE PREVALENT THAN 10 YEARS AGO. SO HOW WORRIED SHOULD WE BE? FOR MICROBIOLOGISTS LIKE AUCKLAND UNIVERSITY'S DR SIOUXSIE WILES, THERE'S PLENTY TO WORRY ABOUT. THE WORLD HEALTH ORGANISATION HAS JUST PUT OUTA REPORT WHICH MAKES FOR QUITE FRIGHTENING READING. WE'RE ON THE VERGE OF SOMETHING POTENTIALLY DISASTROUS. I THINK THAT WHAT'S AMAZING IS HOW LONG IT'S TAKEN FOR THE WHO TO COME UP WITH THIS REPORT. THIS HAS BEEN SOMETHING THAT MICROBIOLOGISTS HAVE BEEN SAYING FOR A LONG TIME - THAT THE NUMBER OF ANTIBIOTIC-RESISTANT G, SUPERBUGS IS GROVVIN AND IT COINCIDES WITH A DROP IN THE NUMBER OF ANTIBIOTICS BEING DEVELOPED I TO GO INTO CLINICAL PRACTICE. I I WHAT TIMEFRAME ARE YOU PREDICTING? I SO THE EXPERTS SAY WE'VE GOT ABOUT 10 YEARS LEFT. IN REALITY, SOME PATIENTS ARE ALREADY THERE. SO WHAT IS THE SCIENCE OF IT? HOW DO BACTERIA BECOME RESISTANT TO ANTIBIOTICS? SO THE TWO MAIN CLASSES OF PEOPLE THEN WHO GET INFECTED FROM THAT INDEX CASE... DR WILES EXPLAINS IT'S A NATURAL PHENOMENON - THE SAME EVOLUTIONARY PROCESS THAT HAPPENS WHEN THEY LIVE ALONGSIDE EACH OTHER ANYWHERE. THINK OF IT LIKE AN ARMS RACE, RIGHT? SO YOU'VE GOT TWO MICROBES LMNG IN SOIL TOGETHER, AND THEY MIGHT BE COMPETING FOR NUTRIENTS OR SOMETHING. AND SO ONE OF THEM WILL PRODUCE A COMPOUND TO TRY AND KILL THE OTHER ONE. THEN THE OTHER ONE IS, LIKE, WELL, I'M GONNA NOW FIGURE OUTA WAY OF STOPPING THAT FROM KILLING ME,' AND SO IN THE ENVIRONMENT, MICROBES HAVE BEEN DOING THIS TO EACH OTHER SINCE TIME BEGAN. AND THEN WE FOUND THESE COMPOUNDS RELATIVELY RECENTLY AND SAID, 'THEY ARE AMAZING! WE'LL USE THEM TO TREAT PEOPLE WHO'VE GOT NASTY MICROBES.' BUT THEN EXACTLY THE SAME THING HAPPENS AS HAPPENS IN SOIL, WHERE THE MICROBES GO, 'AHA! I WILL FIND A WAY TO STOP THAT FROM KILLING ME.' IF YOU WERE VERY UNWELL WITH PNEUMONIA, WE MIGHT USE AMOXICILLIN, WHICH IS A MORE NARROW SPECTRUM... INFECTIOUS-DISEASE SPECIALIST DR MARK THOMAS IS AT THE FRONT LINE, DEPLOYING ANTIBIOTICS, ALBEIT SPARINGLY, IN THE WAR AGAINST BUGS. BUT HE KNOWS HIS MEDICINALARSENAL WILL LOSE ITS FIREPOWER EVENTUALLY. THE ALARM, IF YOU WANNA CALL IT THAT, OVER ANTIBIOTIC RESISTANCE, HASN'T YET REACHED THE STAGE WHERE WE SHOULD BE CONSUMED BY WORRY. UNLESS YOU'RE THE PERSON WHO HAS AN INFECTION THAT OCCURS IN MAYBE 2% OR 3% OF CASES, WHICH WON'T GET BETTER WITH THAT AND WILL GET BETTER WITH A DIFFERENT ANTIBIOTIC BUT THAT OTHER ANTIBIOTIC IS PRETTY MUCH OUR LAST CHOICE. SO ONCE THOSE INFECTIONS TURN UP THAT ARE RESISTANT TO THE CURRENT SECOND-LINE ANTIBIOTIC, ONCE THEY BECOME RESISTANT TO THAT, WE'VE GOT OUR BACKS TO THE WALL. IPHOI~ERINGSI UNTIL THERE'S A REPLACEMENT SOLUTION -AND DR THOMAS ISN'T CONFIDENT ONE IS IMMINENT- HOSPITALS MUST BE MORE RIGOROUS THAN EVER WITH PRACTICES TO REDUCE SPREAD OF INFECTION. THE PATIENT IN THIS ROOM HAS AN ORGANISM THE DOCTORS WANT CONTAINED, SO THOMAS SCRUBS AND GOWNS UP WITH EVERY CONTACT. MORE IMPORTANTLY, HE SAYS WE'RE USING ANTIBIOTICS UNNECESSARILY, WHICH EXACERBATES THE PROBLEM OF RESISTANCE. IN NZ, WE PARTICULARLY SEEM TO USE HIGHER LEVELS OF ANTIBIOTICS THAN LOTS OF OTHER COUNTRIES THAT USE THEM MORE WISELY THAN WE DO. WHICH WE DON'T SEEM TO PROPERLY UNDERSTAND YET. I THINK WE UNDERSTAND, BUT WE IGNORE. I WHY 0o WE CHOOSE TO IGNORE n? I WHY DO WE IGNORE GLOBAL WARMING OR WHY DID WE IGNORE GREENHOUSE GASES? WHY DO WE IGNORE SO MANY OF THESE SLOWLY DEVELOPING ENVIRONMENTAL PROBLEMS? THIS IS A SLOWLY DEVELOPING ENVIRONMENTAL PROBLEM OF THE BACTERIA THAT LIVE ON US AND IN US AND BECOMING MORE AND MORE RESISTANT. AND WE TEND TO IGNORE THOSE SLOWLY DEVELOPING PROBLEMS. RESISTANT. AND WE TEND TO IGNORE THOSE SLOWLY DEVELOPING PROBLEMS. BECAUSE IT'S CONVENIENT TO? BECAUSE NOBODY TAKES RESPONSIBILITY FOR IT. IT'S TRUE WE HAVE NOTHING TO BE PROUD OF WITH OUR PRESCRIBING RATES. WE USE MORE ANTIBIOTICS THAN MOST EUROPEAN COUNTRIES. AND WHILE CONSUMPTION IN THE FIRST WORLD REMAINED THE SAME OR DROPPED SLIGHTLY BETWEEN 2000 AND 2010, ONLY OURS AND AUSTRALINS ROSE -A LOT. CHIEF MEDICAL OFFICER OF HEALTH DR DON MACKIE SAYS NZ'S HIGHER-THAN-USUAL RATES OF INFECTIOUS DISEASE MAKE OUR SITUATION COMPLICATED. BUT THE GOVERNMENT HAS BEEN WORKING ON THE PROBLEM. A CAMPAIGN TO REDUCE PRESCRIBING RATES BEGAN WAY BACK IN 1999. THE INTENTION WAS TO KEEPA CAP ON THE RATE AT WHICH ANTIMICROBIAL RESISTANCE DEVELOPED, AND WE NEED TO WORK VERY CLOSELYAND UNDERSTAND HOW WE CAN BEST GO ABOUT INFORMING BOTH PRESCRIBERS, SUPPORTING THEM IN HOW THEY PRESCRIBE. WE'RE NOT SUCCEEDING, THOUGH, ARE WE? I'M SORRY TO BE SO BLUNT, THEIR RATES OF PRESCRIBING HAVE EITHER STEADIED OR THEY'RE DROPPING. OURS HAVE MORE THAN DOUBLED. IN FACT THEY'VE NEARLY TRIPLED. I SO WE'RE DOING SOMETHING VERY WRONG. I I THINK WHAT WE NEED TO 0o ls WE NEED To UNDERSTAND WHAT'S BEHIND WHAT THE DEMAND SIDE OF THIS IS AND ALSO WHAT PRESCRIBING HABITS ARE- I'M SORRY. IT'S GREAT THAT WE WANT TO UNDERSTAND THE DEMAND, BUT HOW IS IT THAT SO MANY OTHER COUNTRIES HAVE BEEN ABLE TO ARREST THE RISE IN OVERPRESCRIBING AND WE HAVEN'T? IF YOU'LL LET ME FINISH, I THINK WHAT I WAS SAYING WAS WE NEED TO UNDERSTAND THE NZ SITUATION, BECAUSE WE DO SEE THESE RISING RATES, SO THAT WE CAN ACTUALLY UNDERSTAND WHAT INTERVENTIONS WE NEED TO MAKE. CHECKS ON PRESCRIBING RATES ARE UNDERWAY. SO DOCTORS CAN BE BETTER ADVISED. BUT WHAT ELSE CAN WE DO? YEAH, THERE SURE ARE SOME VERY CLEVER SCIENTIST IN NZ THAT ARE ON THE CASE, AND THAT'S NEXT. WOMAN: Now, tell me what you see in this image. WOMAN: Now, tell me what you see in this image. MAN: Uh, my new golf clubs. I OK, and this? I I Um, anniversary presents? I I Right. 0K. I Right, OK. This? My mechanic's bill. Right, OK. My mechanic's bill. If your credit card balance is playing on your mind, I switch n to any ANZ credit card I and enjoy 0% per annum for a whole year. I ...when you sign up to... I Gei SKY free for six months... ...when you sign up to... ...Vodafone unlimited broadband,“ ...when you sign up to... ...Vodafone unlimited broadband,“ ...home phone and SKY. Don't miss out - free SKY for six months. For a limited time, only on Vodafone. WELCOME BACK TO 3RD DEGREE. IN JUSTA FEW DECADES SINCE THEY WERE INVENTED, ANTIBIOTICS, THESE ONCE MIRACLE CURES OR MIRACLE MEDICINES, FACED BEING BEATEN INTO SUBMISSION BY THE VERY BACTERIA THEY WERE INTENDED TO CONQUER. I so WHAT CAN WE no ABOUT m I WELL, THERE ARE TWO THINGS WE CAN DO. WE CAN CONSERVE THEM TO SLOW DOWN THE RATE OF RESISTANCE OR WE CAN FIND SOME MORE. HERE'S PAULA PENFOLD AGAIN. RIGHT HERE IN NZ WE'RE SITTING ON A POTENTIAL GOLDMINE. THIS AT LANDCARE RESEARCH IS THE INTERNATIONAL COLLECTION OF MICROORGANISMS. IT WAS STARTED 6O YEARS AGO, AND AROUND 20,000 CULTURES ARE NOW STORED IN THIS ROOM, HALF OF THEM BACTERIA, HALF OF THEM FUNGI. AND NZ IS A BIODIVERSITY HOTSPOT. THERE ARE AT LEAST ANOTHER 15,000 SPECIES OF FUNGI OUT THERE. IT'S REALLYAWAR BETWEEN FUNGI FIGHTING FUNGI FIGHTING BACTERIA, BECAUSE IT'S REALLY TOUGH OUT THERE, AND THEY'VE GOT TO COMPETE. AS DR BEVAN WEIR, WHO'S THE CURATOR OF THIS COLLECTION, REMINDS US, THE FIRST TRUE ANTIBIOTIC, PENICILLIN, CAME FROM A FUNGUS IN THE FIRST PLACE. SO IN NZ THERE ARE THOUSANDS AND THOUSANDS OF FUNGI ALONE. THERE COULD BE A GOLDMINE IN THE NZ BUSH OR EVEN IN YOUR BACKYARD, YOU WERE TELLING ME. ABSOLUTELY, YEAH, AND THAT'S PART OF THE PROBLEM, THAT THERE'S NOT THAT MANY MYCOLOGISTS - PEOPLE WHO STUDY FUNGI - IN NZ. AND SO I BOUGHTA HOUSE EARLIER THIS YEAR, AND, UH- IN HENDERSON. AND SO I BOUGHTA HOUSE EARLIER THIS YEAR, AND, UH- IN HENDERSON. ...IN HENDERSON. AND LOOKING IN MY BACKYARD FOR FUNGI, AS I DO, AND I'VE ALREADY FOUND TWO NEW SPECIES FOR NZ, JUST IN ATINY LITTLE PATCH OF MY BACKYARD. YOU NEVER KNOW, THEY COULD BE THE NEXT ANTIBIOTIC. ABSOLUTELY, AND WE JUST DON'T KNOW BECAUSE NOBODY'S REALLY BEEN LOOKING, AND SO WE NEED TO GO OUT THERE AND FIND THESE THINGS. THE PROBLEM IS, OF COURSE, THAT EVEN IF THERE IS ANTIBIOTIC POTENTIAL IT INTO A MARKETABLE DRUG TO IT'D BE EXPENSIVE TO DEVELOP I KILL BACTERIAL INFECTIONS, ONE OF THE REASONS IT'S 15 YEARS SINCE THERE WAS A MAJOR ANTIBIOTIC BREAKTHROUGH. WHEN I TURN OUT THE LIGHTS, WHAT YOU'LL SEE IS THEM ALL GLOWING BEAUTIFULLY. DR SIOUXSIE WILES' RESEARCH COULD HELP WITH THAT, THOUGH. LoK.l SHE'S WORKING ON ATECHNIQUE WHICH QUICKLY SHOWS WHAT DRUGS COULD WORK. BASICALLY, THEY'RE ALL ALIVE, AND WE CAN SEE THAT BECAUSE THEY'RE ALL GLOWING. AND THEN AS SOON AS I HIT THEM WITH SOMETHING THAT'S GOING TO KILL THEM, YOU'LL SEE THE LIGHTS GO OUT. MM-HM. SOMETHING THAT'S GOING TO KILL THEM, YOU'LL SEE THE LIGHTS GO OUT. MM-HM. SOMETHING THAT'S GOING TO KILL THEM, LET'S KILL OFF THE PLAGUE, HEY? I HERE WE e0. I THIS ISN'T THE REAL PLAGUE, OF COURSE. BUT HOW THE TECHNIQUE WORKS IS BACTERIA LIKE TUBERCULOSIS ARE GENETICALLY MODIFIED WITH DNA FROM THINGS LIKE FIREFLIES. WHEN THE BACTERIA STOPS GLOWING, YOU INSTANTLY KNOW IT'S DEAD; THE DRUG HAS WORKED. SO IT JUST MEANS THAT WE CAN REALLY RAPIDLY SCREEN HUGE NUMBERS OF COMPOUNDS TO SEE WHETHER THEY HAVE ANY ACTMTY, WHETHER THEY'RE ABLE TO KILL THE BACTERIA. I BUT WE NEED A PLAN s. I NOW WE KNOW THAT EVEN IF WE DO DEVELOP NEW ANTIBIOTICS, BACTERIA WILL BECOME RESISTANT TO THEM TOO. ESSENTIALLY WHAT WE'RE LOOKING AT IS SOME REALLY MULCHY, COMPOSTY KIND OF SOIL. SO SOME SCIENTISTS, INCLUDING HERE IN NZ, ARE LOOKING FOR SOMETHING ELSE ENTIRELY. DR HEATHER HENDRICKSON IS A MICROBIOLOGIST, ALSO AT MASSEY UNIVERSITY. EVERYTHING ACTUALLY AROUND US IS COVERED WITH BACTERIOPHAGES. THERE ARE 1O TO THE 31 ST OF THEM ON THE PLANET. Illu<I.me wsuc I THAT'S RIGHT, 1O MILLION TRILLION TRILLION BACTERIOPHAGES, FASCINATING LITTLE VIRUSES THAT COULD BE AN ALTERNATIVE VVEAPON IN OUR MEDICAL ARMOU RY. BACTERIOPHAGES ARE VIRUSES THAT SPECIFICALLY INFECT PARTICULAR STRAINS OF BACTERIA. SO CAN YOU GIVE ME A COMPARISON? IF YOU WERE ABLE TO USE AN ANTIBIOTIC TO TREATAN INFECTION, WHAT WOULD IT DO COMPARED TO WHATA BACTERIOPHAGE WOULD DO? WHAT YOU'RE DOING WHEN YOU DROP AN ANTIBIOTIC INTO A SYSTEM LIKE THAT IS YOU'RE ALMOST, LIKE, SETTING OFF A NUCLEAR BOMB, SO YOU'RE DESTROYING HUGE NUMBERS OF ORGANISMS THAT ARE ACTUALLY REALLY BENEFICIAL TO YOU. YOU'RE ALSO GETTING THE BAD GUYS, BUT YOU'RE GETTING A LOT OF THE GOOD GUYS AS WELL. I THINK YOU CALL IT, LIKE, A NINJA COMPARED TO THAT NUCLEAR BOMB. THATS RIGHT, SO A BACTERIOPHAGE IS ALMOST LIKE USING A NINJA TO GO IN AND ONLY KILL THE BACTERIA THAT ARE MAKING YOU ILL. I ru. BE ABLE TO GIVE YOU... l I rrs NOT EXACTLY NEW. I PHAGE THERAPY WAS FIRST USED IN GEORGIA IN THE 19208 FOR TREATING BACTERIAL INFECTIONS, BUT THE THERAPY WAS OVERTAKEN BY ANTIBIOTICS, WHICH, AS WE'RE NOW SEEING, HAVE LIMITED LONGEVITY. SO THOSE WHO WORK WITH PHAGES SAY WITH MORE RESEARCH, THEY COULD BE OUR NEXT SAVIOUR. THIS IS THE PHAGE YOU FOUND, ISN'T IT? OUR NEXT SAVIOUR. THIS IS THE PHAGE YOU FOUND, ISN'T IT? OH YEAH. HEATHER HENDRICKSON'S STUDENTS, LIKE JESS FITCH, ARE ALREADY FINDING AND NAMING THEIR OWN BACTERIOPHAGES. I IT'S PRETTY CUTE, RIGHT? I WHAT'S HE-? WHAT'S THE NAME? WHAT HAVE YOU CALLED HIM? > IT'S PRETTY CUTE, RIGHT? WHAT'S HE-? WHAT'S THE NAME? WHAT HAVE YOU CALLED HIM? > OH, FABIO. I FABIO? > I COS HE'S THE BIGGEST OUT OF ALL THE PHAGES THAT WE FOUND. FABIO? > COS HE'S THE BIGGEST OUT OF ALL THE PHAGES THAT WE FOUND. (LAUGHS) > AND THIS IS MORE THAN A UNIVERSITY EXPERIMENT. IT HAS COMMERCIAL POTENTIAL. THERE HAVE ALREADY BEEN APPROACHES FROM COMPANIES LOOKING TO TAKE THIS THERAPY FURTHER. IS THIS THE WAY OF THE FUTURE IN TERMS OF TREATMENT OF DISEASE? > YOU KNOW, I GUESS WHEN I'M THINKING ABOUT THE FUTURE, IT DOESN'T SEEM LIKE WE'RE FINDING NEWANTIBIOTICS, AND I WANTA FUTURE THAT DOESN'T SOUND LIKE... THE PRE-ANTIBIOTIC ERA. AND SO IT REALLY SEEMS IMPORTANT TO ME THAT WE TAKE THE TIME AND MAKE THE INVESTMENT TO LOOK INTO THIS KIND OF AN ALTERNATIVE. I WOULD PERSONALLY BE HAPPY TO TAKE A COCKTAIL OF BACTERIOPHAGES IF I HAD AN INFECTION, AND I THINK THE MORE PEOPLE LEARN ABOUT THEM AND LEARN THAT THEY'RE ALREADY IN YOU AND THEY'RE ALREADY WITH US AND THAT WE'RE ALREADY COADAPTING WITH THEM, UM- IT DOESN'T SOUND LIKE WEIRD SCIENCE THEN, WHEN YOU UNDERSTAND THAT. > EXACTLY. IT'S JUST UNDERSTANDING THE MICROBIAL WORLD, I THINK, REALLY. UM, IT GIVES ME A LOT OF HOPE FOR THE FUTURE. RIGHT, WELL, THE NINJA DEFENCE - I LIKE IT - IT'S VERY CLEVER, BUT THAT'S NOT ALL. THERE IS ANOTHER DEVELOPMENT. IT'S SOMETHING CALLED FAECAL TRANSPLANTATION, AND, YES, IT IS WHAT IT SOUNDS LIKE. IT'S REPLACING BAD BACTERIA IN A PATIENT WITH GOOD BACTERIA VIA... YEAH, LET ME DO THIS, COS I KNOW YOU DON'T WANT TO DO THIS. THIS IS SOMEONE ELSE'S POOS, BASICALLY, STERILE - STERILE POOS, THOUGH, OK. SOMEHOW IT'S STERILE. BASICALLY, STERILE - STERILE PO03, THOUGH, OK. SOMEHOW IT'S STERILE. I KNOW YOU DON'T LIKE THIS. YOU DON'T HAVE TO LAUGH. BUT IT'S ALREADY BEEN USED ON ABOUT 2O PATIENTS HERE IN NZ, SO MAYBE PAULA- HOPEFULLY SHE CAN GIVE US A BIT OF A- ABOUT 2O PATIENTS HERE IN NZ, I ...A BIT OF A FOLLOW-UP ON THAT ONE. I ALL RIGHT, COMING UP NEXT - ROD DRURY, NZ'S ANSWER TO BILL GATES. BUT WHY DOESN'T HE SELL UP NOW? DON'T YOU WANT THAT? DON'T YOU WANTA BILLION DOLLARS? COS THAT'S WHAT COULD HAPPEN. YOU COULD HAVE A BILLION DOLLARS. I CAN WRITE YOU OUTA CHEQUE. COS THAT'S WHAT COULD HAPPEN. YOU I'VE GOT TO INVEST IN COMPANIES. I CAN WRITE YOU OUTA CHEQUE. COS THAT'S WHAT COULD HAPPEN. YOU I'VE GOT TO INVEST IN COMPANIES. YOU COULD LIVE IN HAVELOCK NORTH. COS THAT'S WHAT COULD HAPPEN. YOU YOU COULD LIVE WITH YOUR FAMILY. YOU COULD TURN YOUR PHONE OFF. COS THAT'S WHAT COULD HAPPEN. YOU YOU COULD SURF. YOU COULD TURN YOUR PHONE OFF. Cos THAT'S WHAT COULD HAPPEN. YOU YOU COULD SURF. [IE cos THAT'S WHAT COULD HAPPEN. YOU IT'D BE COOL. [IE] COS THAT'S WHAT COULD HAPPEN. YOU lT'D BE COOL. NO, I'D LAST 10 MINUTES. WELCOME BACK. IF ALL GOES WELL, THIS COMPANY COULD BECOME A KIWI VERSION OF FACEBOOK OR GOOGLE. ALREADY IT'S COME OUT OF NOWHERE AND TURNED ITSELF INTO ONE OF OUR BIGGEST COMPANIES. IT CERTAINLY HAS. EARLIER THIS YEAR, IT OVERTOOK HOUSEHOLD NAMES LIKE AIR NZ AND TRADE ME TO BECOME THE FIFTH BIGGEST ON THE STOCK MARKET HERE IN NZ. SO WILL XERO MAKE US ALL RICH? PHIL VINE TAKES A LOOK. HE ALSO TAKES A PUNT. I 'ODETOJOY'l THE WELLINGTON HQ OF KIWI COMPANY XERO, A $3 BILLION GLOBAL BUSINESS. SO, WHAT EXACTLY DO THEY DO IN THERE? I-ooefoaovcnescsnnossl YES, BE TRULY FRIGHTENED. ONE DAY, THESE GUYS MIGHT TAKE OVER THE WORLD, IF THEY HAVEN'T ALREADY. IT'S SPORT. IT'S HIGH-PERFORMANCE SPORT BECAUSE, UM, YOU'RE PLAYING THE BIG GAME WITH THE FITTEST PEOPLE IN THE WORLD. GEEKS, FREAKS, NERDS, GAMERS DEVELOPERS, MAKING MILLIONS UPON MILLIONS FOR THIS GUY AND HIS INVESTORS. WE GET RID OF ALL THE CORPORATE BULLSHITAND JUST GO REALLY HARD AND FAST. <i>L</i> WHO DO WE GET TO SHOOT? <i>I</i> UH, ANYONE WHO'S NOT DELIVERING- WHO DO WE GET TO SHOOT? UH, ANYONE WHO'S NOT DELIVERING- LOOK, THOSE TWO SEEM TO BE SLACKING OVER THERE. CAN YOU GIVE ONE IN THE BACK OF THE HEAD? BE SLACKING OVER THERE. CAN YOU GIVE ONE m THE BACK OF THE HEAD? CAN YOU GIVE ONE m no YOU WANT THE REPORTS DONE OR NOT? CAN YOU GIVE ONE m no YOU WANT THE REPORTS DONE OR NOT? I ELECTRONIC MUSIC I IN A RIDICULOUSLY SHORT TIME, XERO HAS TURNED KIWI FOUNDER ROD DRURY INTO OUR STEVE JOBS, I AN INTERNATIONAL TECH STAR. I IT'S PUT HIM AT NUMBER 12 ON THE RICH LIST AND DELIVERED HIM THE WHEELS HE'S ALWAYS DREAMED OF. JEREMY CLARKSONI THIS IS THE THINKING MAN'S SUPERCAR, THE MERCEDES SLS. I'VE JUST REALLY LIKE CARS. I LOVE CARS. ALWAYS HAVE. ALWAYS HAD THE POSTERS ON THE WALL. YEAH. CARS. ALWAYS HAVE. ALWAYS HAD THE POSTERS ON THE WALL. YEAH. YOU KNOW, THIS WASN'T NEW. I GOT IT SLIGHTLY OUT OF THE UK. PROBABLY STILL COST HIM MORE THAN HIS ANNUAL SALARY - 350,000. DO YOU EARN THE MOST IN THE COMPANY? PROBABLY STILL COST HIM MORE THAN HIS ANNUAL SALARY - 350,000. DO YOU EARN THE MOST IN THE COMPANY? OH, HELL NO. NO, I'M PROBABLY JUST IN THE TOP 10. I ELECTRONIC MUSIC I I YEP, THEY PAY VERY WELL m THERE. I NO SURPRISE IF YOU'VE BEEN WATCHING THE SHARE PRICES. THEY'VE GONE CRAZY, TRIPLED IN VALUE. SO IS THERE SOMETHING MAGICAL HAPPENING, OR, AS SOME ARE SUGGESTING, IS XERO A BUBBLE WAITING TO BURST? LOOK AT THAT. IS XERO A BUBBLE WAITING TO BURST? LOOK AT THAT. THAT'S AMAZING. <i>L</i> AND WHAT DO THEY DO AGAIN? <i>I</i> TO BE HONEST, IT'S NOT THAT INTERESTING. WE GIVE ROD HALF A MINUTE TO EXPLAIN. WE PROVIDE THE, UM, ACCOUNTING SOFTWARE SMALL BUSINESSES USE, AND WE GET ITALL IN THE CLOUD, SO YOU JUST LOG IN. YOUR BANK TRANSACTIONS COME IN. YOU CAN DO YOUR GST RETURNS, ALL OF THOSE SORT OF THINGS. BUT WE DO IT IN A WAY THAT'S REALLY EASY THAT SAVES SMALL BUSINESSES HOURS PER WEEK, AND PEOPLE LOVE IT. I LESS THAN 30 SECONDS! (LAUGHS) > I IYEAH. I I OK, YAWNS, ACCOUNTING SOFTWARE - I SOUNDS LIKE AVERY BORING PATH TO WORLD DOMINATION, BUT HERE'S THE RUB. HERE WE CAN SEE THE ACTIVE USERS THAT ARE ON XERO RIGHT NOW, SO WE'VE GOT 11,000 PEOPLE. ROD WANTS TO CONNECT LITTLE COMPANIES ALL OVER THE WORLD ON ONE PLATFORM, XERO, KIND LIKE A FACEBOOK FOR SMALL BUSINESSES. MILLIONS AND MILLIONS OF THEM, AND THEY SPEND LOTS OF MONEY - TRILLIONS OF DOLLARS. ACCOUNTING SOFTWARE IS THE TICKETS TO THE GAME. WHAT IT'S REALLY ABOUT IS, UM- IS HAVING, YOU KNOW, THOSE CUSTOMERS ON YOUR PLATFORM AND BEING ABLE TO USE THE WEIGHT OF THOSE MILLIONS OF CUSTOMERS TO GET STUFF DONE. JUST LIKE GOOGLE AND FACEBOOK, XERO SHARES THE SAME SORT OF FUN-FILLED WORKPLACE, I EVEN ONE OF THE SAME INVESTORS. I CONGRATULATIONS. WE'RE GOING TO START YOU OFF WITH A $500,000 INVESTMENT. ROD GOT FOUR MILLION OUT OF THE GUY IN THE WHITE SHIRT. < SAME GUY? ROD GOT FOUR MILLION OUT OF THE GUY IN THE WHITE SHIRT. < SAME GUY? YEAH, SAME GUY. THE GUY IN THE WHITE SHIRT. WHEN YOU START BENCHMARKING YOURSELF, YOU KNOW, WE REALISED THAT WE'RE ABSOLUTELY WORLD CLASS. AND NOW HE'S WAITING IN THE LOBBY OF A SWANKY AUCKLAND HOTEL FOR ANOTHER VENTURE CAPITALIST. THIS IS THE STUFF THAT I REALLY LIKE, COS YOU'RE DEALING WITH THE BEST PEOPLE IN THE WORLD. JUST QUIETLY, THIS GUY'S IN FOR $75 MILLION. I ELECTRONIC MUSIC I WITH ATOTAL OF 200 MILLION TO PLAY WITH, XERO'S GROWN METEORICALLY, MOVING INTO AUSTRALIAAND THE UK AND EYEING UP THE GIGANTIC US MARKET - NOT BAD FOR COMPANY THAT'S NOT MADE A CENT OF PROFIT. YOU HAVE TO BE IN A LOSS FORA PERIOD OF TIME WHILE YOU USE THAT EXTRA MONEY TO BUILD A LONG-TERM BUSINESS. ROD, WHEN ARE YOU GOING TO MAKE A PROFIT? WELL, NOT FOR A FEW YEARS, BECAUSE WE'VE GOT ALL THIS CAPITAL TO INVEST. WELL, NOT FOR A FEW YEARS, < TWO YEARS? THREE YEARS? CAPITAL TO INVEST. WELL, NOT FOR A FEW YEARS, < TWO YEARS? THREE YEARS? I'M NOT SAYING. MOST TECHNOLOGY COMPANIES DON'T MAKE A PROFIT FOR THEIR FIRST 10, 15 OR 20 YEARS. THE QUESTION IS DOES THE MARKET BELIEVE THAT EVENTUALLY IT WILL MAKE A PROFIT? BEN KEEPES, TECH WRITER FOR FORBES MAGAZINE. THERE'S NO LOVE LOST BETWEEN THESE TWO. ROD'S ALWAYS BEEN HELD UP AS THE SAVIOUR OF NZ TECHNOLOGY, AND, FRANKLY, HE IS. HE HAS CREATED THE INDUSTRY HERE IN A LOT OF WAYS, BUT THAT COMES WITH A RELUCTANCE TO MAYBE TAKE CRITICISM FROM LOCAL FOLK. WHEN BEN DARED TO CRITIQUE XERO, ROD PUBLICLY CALLED HIM A DICK. SOMETIMES YOU JUST HAVE TO DO THAT. WHEN BEN DARED TO CRITIQUE XERO, ROD PUBLICLY CALLED HIM A DICK. SOMETIMES YOU JUST HAVE TO DO THAT. < IS THATA MATURE WAY TO REACT TO CRITICISM? I WELL, I THINK IT'S JUST WHO WE ARE. I WE ARE, UM, YOU KNOW, VERY REAL, AND WE'RE JUST REAL PEOPLE, SO WE HAVE SOME FUN WITH IT. I ON THE STOCK MARKET, THE NZX... l FUN DAYS IN MARCH WHEN XERO SHARES HITA PHENOMENAL $44. I ON PAPER, ROD WAS WORTH 800 MILLION. I YOU COULD SOON BECOME A BILLIONAIRE. UH, YEAH, I MEAN, THAT WOULD BE REALLY COOL, THE, YOU KNOW- THE PRACTICAL SIDE OF THAT IS YOU CAN NEVER GETA DEAL WITH A TRADESMAN AGAIN. THE, YOU KNOW- THE PRACTICAL SIDE THAT STILL BOTHERS YOU? DEAL WITH A TRADESMAN AGAIN. THE, YOU KNOW- THE PRACTICAL SIDE THAT STILL BOTHERS YOU? YEAH. (LAUGHS) IUPBEATIIJSIOI SO NOW I'M GOING TO BREAK THE HABIT OF A LIFETIME. TODAY I'M GOING TO BUY MY FIRST SHARES. I MUSIC CONTIMJES I XERO SHARES, SO I CAN GET INTO THE SHAREHOLDERS' MEETING FOR AN INSIDE VIEW. I IF YOU'RE some TO PUNT, I YOU HAVE A VIEW AS TO WHY YOU'RE PLACING MONEY ON THAT HORSE OR, IN THIS EXAMPLE, XERO. AND IF YOU BELIEVE THAT XERO'S GONNA BOLT THROUGH THAT GATE FIRST, THEN IT COULD BE A GOOD INVESTMENT FOR YOU. WITHOUT SAYING SO, I THINK THAT NICE MAN FROM FORSYTH BARR IS TRYING TO PUT ME OFF. I'M REALLY CONCERNED THAT NZERS MAY HAVE AND IN THE PAST GOT ON BOARD WITH XERO LARGELY BECAUSE THEY'VE SEEN A BIT OF A HERD SORT OF MENTALITY. I THINK PEOPLE HAVE LOST FOCUS ON THE DOWNSIDE RISK THAT GOES WITH SPECULATIVE HIGH-GROWTH COMPANIES. I IGNORE HIS POLITE CONCERNS AND SIGN. I ALL RIGHT. I I WHAT HAVE I DONE? I OH, WELL, COME ON, PHIL. DIDN'T HE READ THE SMALL PRINT? AS THEY ALWAYS WARN YOU, SHARE PRICES, WE KNOW THEY CAN GO DOWN AS WELLAS UP. MM. WHEN WE COME BACK, PHIL WORRIES ABOUT HIS MONEY. CAN HE AFFORD HIS NEXT PAIR OF DOC MARTEN BOOTS? I IS THE XERO BUBBLE ABOUT TO BURST? I < TELL ME I'M NOT GONNA LOSE MY SHIRT, ROD. I (eneeuzsfl I (ensues) (GASPS) LAUGHS: Hey. (GIGGLES) (GASPS) LAUGHS: Hey. (GIGGLES) ultra-absorbent wipes make Treasures' new ultra-thick: change time child's play. Treasures' new ultra-thick, change time child's play. WELCOME BACK. ROD DRURY TOOK HIS ACCOUNTING SOFTWARE COMPANY TO ZERO TO- AND AT ONE POINT IT WAS WORTH ACTUALLY $3 BILLION. ASTONISHING NUMBER, REALLY. AND HE IS STILL SHOOTING FOR THE STARS. FORBES MAGAZINE HAS CALLED IT THE MOST INNOVATIVE GROWTH COMPANY IN THE WORLD, AND IF ROD SUCCEEDS, HE SEES NO REASON WHY HE CAN'T TAKE ALL OF US WITH HIM, TRANSFORMING NZ INTO A TECHNOLOGY TIGER. BUT DOES THAT MEAN THAT HE WANTS US TO ALL BUY SHARES? I THINK HE JUST WANTS THE ECONOMY TO BE BOOSTED BY TECHNOLOGY, AND PHIL VINE IS EXCITED. I CLASSICAL MUSICI NZ, OUR LAND OF MILKAND... HONEY. JUST LOOK AT THE VIEW. FOR AGES, IT SEEMS BEEN MUMBLING ABOUT SHAKING OUR RELIANCE ON T & A - TOURISM AND AGRICULTURE. THE OPPORTUNITY, COS WE'RE BEEN rm WORRIED WE'RE KIND ol= LOSING <i>'</i> s. TALKING ABOUT IT FOR 1O OR 12 YEAR THE OPPORTUNITY TO CREATE A SO-CALLED SMART ECONOMY, LED BY BUSINESSES LIKE XERO. < DO YOU REALLY THINK THAT GEEKS CAN TRANSFORM NZ? ABSOLUTELY, BECAUSE, YOU KNOW, THE GEEKS ARE CREATING THESE, YOU KNOW, VERY VALUABLE BUSINESSES AND CREATING LOTS OF NEW JOBS, AND THE TECHNOLOGY SECTOR WILL INVEST. THEY'RE HAPPY TO DO IT. AND, YOU KNOW, MARSHALLING THAT TOGETHER COULD- AND HAVING A REAL COORDINATED STRATEGY COULD REALLY STEP-CHANGE NZ. AND XERO, OUR LOCAL TECH HERO, LOOKED AS IF IT WAS RINGING THOSE CHANGES. THEN IN APRIL, WHAM, THE SHARE PRICE TOOKA NOSE DIVE. XERO'S NOW 30% BELOW ITS ALL-TIME HIGH. THE MARKET STUNNED WHAT WAS REAL; WHAT WASN'T? IT WAS LIKE 'WOLF OF WALL STREET'. IT'S ALL A FUCAZI. YOU KNOW WHAT FUCAZI IS? I NO, FUGAZI. IT'SA FAKE. I YEAH, FUG-AZI, FUGA-ZI. ll"s AWAZZY. ITSAWOOZY. ll"s... (WHISTLES) I FAIRY DUST. IT DOESN'T EXIST. I HOW MUCH OF THAT CONFIDENCE IN XERO IS JUST FAIRY DUST? SO THAT'S THE ISSUE OF DOING THESE THINGS AND BEING A BIT HYPED UP, SO IT WAS NEVER A BIG BENEFIT TO U3, ALL EVERYTHING MOVING AROUND AND GOING UP SO QUICKLY. < SO WAS IT FAIRY DUST? ALL EVERYTHING MOVING AROUND AND GOING UP SO QUICKLY. < SO WAS IT FAIRY DUST? ALL EVERYTHING MOVING AROUND AND < THAT BELIEF? IT'S THAT THERE'S A WHOLE ATFITUDE AROUND THE SHAREMARKET ABSOLUTELY HAPPENS. THE THING THAT WE DON'T UNDERSTAND HERE IN NZ IS THAT TECHNOLOGY COMPANIES WORK ON AVERY FAST CYCLE. SO THEY GROW VERY QUICKLY AND THEY TEND TO FAIL VERY QUICKLY. SO IT COULD CRASH AND BURN JUST AS QUICKLY AS IT'S GROWN? I'M NOT SUGGESTING THAT THEY ARE GOING TO CRASH AS QUICKLY AS THEY'VE GROWN, BUT THE TECHNOLOGY INDUSTRY TENDS TO HAVE PRETTY RAPID GROWTH AND PRETTY RAPID FALL WHEN IT DOES FALL. I'M TALKING TO YOU AS A CONCERNED SHAREHOLDER. TELL ME I'M NOT GOING TO LOSE MY MONEY. YEAH, SO WHAT YOU SHOULD DO - MY ADVICE IS PUT THEM IN THE BOTTOM DRAWER. THE FUTURE PRICE OF THOSE SHARES DEPENDS LARGELY ON XERO'S NEXT BOLD MOVE - TO BREAK INTO THE US MARKET. ROD'S GATHERED GLOBAL LEADERS IN MARTINBOROUGH TO TALK STRATEGY. IT'S GOING TO BE ATOUGH FIGHT. INTUIT IS THE GIANT-SIZED COMPETITION. BASED IN SILICON VALLEY. TOTAL WORKFORCE - 9000. WELL, THIS IS ROD'S MODEST OFFICE IN SAN FRANCISCO. WITH 110 EMPLOYEES. I YOU GOTA SALE! I SO, AT THE MOMENT, INTUIT HAS MILLIONS OF CUSTOMERS, AND YOU HAVE, WHAT, 16,000? WELL, WE LOVE THAT HAVING A- YOU KNOW, BEING THE DAVID AND HAVING THE GOLIATH TO PUSH AGAINST IS AWESOME. TO BE HONEST, THEIR SHARE PRICE IS BASED ON SUCCESS IN THE US. THE JURY IS OUT ON HOW WELL THEY'LL BE ABLE TO EXECUTE IN THE US. I AND XERO WAS BUILT BY... l IT'S THE XERO AGM. SHARES HAVE DROPPED AGAIN, WITH A NEWS REPORT QUESTIONING THEIR SUCCESS IN THE STATES. SO THIS IS STILL REALLY, REALLY, REALLY EARLY, AND WE HAVE NOT SKIPPED A BEAT. I I GETAN INVITE...l I TIME FOR DRINKS. I HOLD ON, HOLD ON. TIME FOR DRINKS. HOLD ON, HOLD ON. I THINK- TIME FOR DRINKS. HOLD ON, HOLD ON. I THINK- HOLD ON. I ...AND SPEAKING RIGHTS. I SO, I'VE BEEN A SHAREHOLDER FOR ALL OF THREE WEEKS NOW, AND I HAVE NOTICED THAT THE SHARE PRICES HAVE BEEN GOING DOWN EVERY TIME I LOOK. YEAH, SO, WE DON'T CONTROL THE SHARE PRICE, PHIL, AS YOU KNOW. UM, WE KEEP PUTTING OUT GOOD NEWS. IT KEEPS GOING DOWN. IF YOU THINK WE'RE DOING WELL, GO AND BUY SOME SHARES. LOOKS LIKE A BUYING OPPORTUNITY TO ME. COULD I HAVE A SHOW OF HANDS, PERHAPS, TO THOSE CONSIDERING BUYING MORE XERO SHARES? I PROBABLYABOUTATHIRD OF THE ROOM. I THEY'RE MOSTLY KIWI MUM-AND-DAD INVESTORS WHO'VE BOUGHT INTO XERO'S MASSIVE GROWTH. WHAT HAPPENS TO THAT GRAPH - THAT METEORIC GROWTH - IF YOU DO HIT THE WALL IN THE STATES WITH INTUIT? OH, I DON'T THINK WE'LL- IT DOESN'T COMPUTE TO US THAT WE WILL HIT THE WALL. IS THERE A PLAN B? COMPUTE TO US THAT WE WILL HIT THE WALL. IS THERE A PLAN B? I DON'T THINK WE NEED A PLAN B. WE'RE CERTAINLY NOT AT THAT POINT. < DO YOU ENTERTAIN THE IDEA OF FAILURE? WE'RE CERTAINLY NOT AT THAT POINT. < DO YOU ENTERTAIN THE IDEA OF FAILURE? NO. NO, I MEAN- < DO YOU ENTERTAIN THE < NOTATALL? NO. NO, I MEAN- < DO YOU ENTERTAIN THE < NOTATALL? WELL, I- I MEAN, IS IT NOT PRUDENT, THOUGH, TO THINK ABOUT THE POSSIBILITY OF FAILURE? YEAH, WE THINK OF FAILURE ALL THE TIME AND WE FAIL EVERY DAY HUNDREDS OF TIMES, BUT, UM, YOU KNOW, WE'RE CONFIDENT IN OUR EXPERIENCE THAT WE KIND OF KNOW HOW IT'S PLAYING OUT. I IT'S THE ABILITY To MAKE... l NOT SURE IF ROD SAW THIS ONE COMING, THOUGH. HIS BIG GUY IN THE US, PETER KARPAS, WHOM HE POACHED FROM PAYPAL, QUITS XERO. HE'S BULLISH IN JULY. ONCE PEOPLE FIND OUT THAT WE'RE A TRULY LEGITIMATE COMPETITOR IN THE US, PEOPLE ARE GOING TO FLOCK TO US. HE'S GONE BY SEPTEMBER, AND THE SHARE PRICE SLUMPS AGAIN. SO, THIS IS ONE OF THE PLACES YOU COME? AND THE SHARE PRICE SLUMPS AGAIN. AS WE WANDER ROUND ROD'S HOME BASE, HAVELOCK NORTH, I'M WONDERING IF IT'S TIME TO THINK ABOUT SELLING MY XERO SHARES AND WHETHER ROD MIGHT BE THINKING THE SAME. AND MADE NUMBER 12 ON THE RICH LIST? BE THINKING THE SAME. AND MADE NUMBER 12 ON THE RICH LIST? OH, YOU KNOW... HE SOLD HIS LAST TECH COMPANY FOR 40 MILLION. WHAT'S TO STOP THE AMERICANS BUYING HIM OUT AGAIN, MAKING ROD A BILLIONAIRE AT 48? WELL, NO, THEY CAN'T BUY US, BECAUSE WE'RE TOO EXPENSIVE. THE END GAME IS NOT TO PROVIDE A PLATFORM WHICH CAN BE BOUGHT OUT BY AN AMERICAN COMPANY? NO. NO, WE WANT TO BE THE LONG-TERM HOLDER. WE WANT TO BE THE LONG-TERM HOLDER OF THIS BUSINESS BECAUSE IT'S REALLY IE1] BUT WHAT'S TO STOP THEM GOING, 'WE'RE BUYING YOU?' COS I DON'T WANT TO SELL IT. 'WE'RE BUYING YOU?' COS I DON'T WANT TO SELL IT. DON'T YOU WANT THAT? NO- COS I DON'T WANT TO SELL IT. DON'T YOU WANT THAT? NO- DON'T YOU WANT A BILLION DOLLARS? COS THAT'S WHAT COULD HAPPEN. YOU COULD HAVE A BILLION DOLLARS. I COULD WRITE YOU OUTA CHEQUE. I'VE GOTTA INVEST IN COMPANIES. I COULD WRITE YOU OUTA CHEQUE. I'VE GOTTA INVEST IN COMPANIES. YOU COULD LIVE IN HAVELOCK NORTH. BUT LMNG IS- I'VE GOTTA INVEST IN COMPANIES. YOU COULD LIVE IN HAVELOCK NORTH. BUT LMNG IS- YOU COULD LIVE WITH YOUR FAMILY. YOU COULD TURN YOUR PHONE OFF. BUT uvme ls- You COULD LIVE wm-a YOUR FAMILY. HE BUT LMNG IS- YOU COULD LIVE WITH YOUR FAMILY. NO, I'D LAST 10 MINUTES. FAR MORE INTERESTING IS TO BE WITH A TEAM THAT'S ACTUALLY WINNING AND DOING THINGS GLOBALLY. IT'S AWESOME. IT'S LIKE BEING THE ALL BLACKS OF SOFTWARE, SORT OF THING. SO LET'S HEAR IT FOR THE GEEK BLACKS. LIKE IT OR NOT, OUR FUTURE IS PROBABLY IN THEIR HANDS. WHAT DO YOU RECKON, DUNCAN? QUITE A LIBERAL USE OF THE TERM 'GEEK' THERE. IS ITAN INSULT, OR HAS IT BEEN RECLAIMED? NO, I THINK ITSA SOURCE OF PRIDE. THESE PEOPLE, LOOK AT WHAT THEY'RE DOING. THEY'RE OUR BESTAND BRIGHTEST, SO GOOD ON THEM. THEY'RE OUR BESTAND BRIGHTEST, SO GOOD ON THEM. I THINK IT'S ENDEARING. INCIDENTALLY, PHIL DIDN'T WANT TO BE ACCUSED OF INSIDER TRADING, SO HE SOLD HIS SHARES, BUT HE MADE A LOSS OF $5 A SHARE. SO THAT'S A TOTAL OF 40 BUCKS DOWN THE DRAIN. BUT HE MADE A LOSS OF $5 A SHARE. OK, THATS ALL FROM US AT 3RD DEGREE FOR THIS WEEK. WE'RE BACK NEXT WEDNESDAY. WE'LL CATCH YOU THEN.