The Utilization of Information Systemsin the Pacific Rim
A study of China & Hong Kong, Indonesia, Japan, North & South Korea, Singapore and Taiwan
Team Three
Cindy Branon Zach Evans
Melissa Holder Kendall Joseph
Brandon McLain Shane Morgan
The Utilization of Information Systems in the Pacific Rim
GovernmentEconomyLabor MarketIS Infrastructure & Utilization Hardware & Software Telecommunications & Internet Usage Imports/Exports
Strengths & WeaknessesForeign Investment & OutsourcingCutting Edge Technologies
China and Hong KongMelissa Holder
China – Quick Facts
1.28 billion peoplePopulation growth of 0.87 percentLand area of 9.6 million square kilometersGDP grew 7.3 percent
China – Government Regulations
Government regulates each section of IT
Software cannot be published by foreign firms
Recently joined the World Trade Organization to include the Information Technology Agreement
China – Economic Infrastructure
Recession in China’s economyGDP grew 7.3 percent, among the highest in the world in 2001China manufactured $23.9 billion in computer products in 2001Mainland China’s government plans to spend $120 billion on the technology infrastructure
China – Skill Set and Job Market
Over 400,000 college graduates annually in the Engineering and Computer Science fieldsMost graduates speak English as a second languageScience and Technology ParksInternships/AssistantshipsJob market is declining
China – IS Infrastructure/Utilization
Second largest production of PCs in the world with over 7.5 million sold in 2000Telecommunications are semi-regulated.ISP’s- 3 (in 2000); Internet users- 45.8 millionGovernment officials monitor website for information that is not welcomed by the government
Market Share
Sales Volume(in billions USD)
Growth Rate
Hardware 21.5 11.7
Software 3.4 21.3
Information
Service4.9 26.9
Total 29.8 15.0
Market Size Information Technology
China – Import/Exports
Exports are mainly to Hong Kong and the United States and total $20 billion
Imports mostly include products of higher technology such as automation equipment
Shenzhez and Shanghai are the innovators of Chinese information technology
China – Outsourcing Opportunities
IT employees have knowledge of English language
Cheaper labor costs
Government regulations a downside
China – Cutting Edge Technology
Adoption of E-Commerce and E-Government initiatives
Implementing ITA regulations in accordance with the World Trade Organization
Hong Kong – Quick Facts
7.3 million people
Population growth of 1.26 percent
Land area of 1,092 square kilometers
GDP grew 1.5 percent
Hong Kong – Economic Infrastructure
Recession in Hong Kong’s economy
Free-trade for IT products
Computer manufacturing is limited to computer peripherals and accessories
Hong Kong is in the process of deregulating the last part of telecommunications-voice communications
Hong Kong – Skill Set and Job Market
Most graduates speak English as a second languageGovernment officials have implemented a five-year plan to introduce IT into secondary schoolsScience and Technology ParksInternships/AssistantshipsJob market is declining
Hong Kong – IS Infrastructure/Utilization
Hardware production is limited to computer parts and accessories, and data storage units
Software development is produced locally
Telecommunications are very advanced
ISP’s- 250; Internet users- 4.35 million
Hong Kong – Import/Exports
Exports are mainly to China, Europe, Singapore, the United States, and Japan
Exports have increased by 15 percent
Imports are limited to domestic goods, and a limited amount of software products
Hong Kong – Outsourcing Opportunities
Government deregulation is a plus
One of the most advanced technology infrastructures
IT employees speak English
Labor is cheaper
Hong Kong – Cutting Edge Technology
Octopus E-Cash cards (Smart Cards)
E-Government initiatives
China and Hong Kong Comparison
E-Government initiatives
Job market and skill sets of IT employees
Government Regulations
Advancement of IT infrastructure
Imports and Exports of IT
Similarities Differences
China and Hong Kong Comparison
Hong Kong China (Shanghai)
Prime Office Space (Rent) $6.30/ sq. ft. $1.90/ sq. ft.
Two-bedroom apartment $3,500/ mo. $1,000/ mo.
Personal Assistant $3,500/ mo. $500/ mo.
International School $14,500-16,000/yr. $17,000-20,000/yr.
Business Lunch for Two $51 $24
Taxi to Airport from Downtown
$48 $24
Commercial Broadband Up to $390 /mo. Up to $180/mo.
Data: Business Week
IndonesiaZach Evans
Indonesia – An Introduction
Population: 215 million – 4th largest nation in the worldWorld’s largest archipelago with over 17,000 islandsFive main islands are: Java, Kalimantan (Borneo), Sulawesi, Sumatra, & Papua300 ethnic groups speaking over 350 languages2001 GDP: $143.3 billion USBasic life principles: mutual assistance, deliberations, and consensus
Indonesia – Government Regulation
Two state-owned telecom companies: PT Telkom and PT Indosat Monopoly over long distance until 2005 and over
domestic service until 2010
1994: Government passed law allowing private-company involvement in telecom industry Companies are required to collaborate with state-owned
companies State-owned companies regulate private firm’s
activities
Indonesia – Economic Infrastructure
Ten year trend has been away from agriculture towards industry and manufacturing
05
101520253035404550
1982 2002
Per
cent
age
Agriculture Industry Manufacturing Services
Indonesia – Labor Market
0
10
20
30
40
50
60
1980 2000
Per
cen
tage
Adult Illiteracy Rate Secondary Enrollment
Tertiary Enrollment
2001 Unemployment Rate: 8.1%
1,400 institutes of higher learning
Illiteracy is down, school enrollment is up since 1980
Indonesia – IT Infrastructure - Hardware
200 domestic companies that product PCs and peripherals Most of these products are exported
11 out of 1,000 people have access to a PC at home or at work
58,500 computers installed in schools
Indonesia – IT Infrastructure - Telecom
Most of country connected with copper wires Fiber optic cables available in large cities but
‘last mile’ connections are copper wires
2002: 7.6 million main phone lines installed
2002: 11.7 million cellular phone lines Meteoric rise due to dramatic reduction of
import taxes on handsets
Indonesia – IT Infrastructure – Cutting Edge Technologies
Internet transmission speeds limited to 19,200 kbps or even 9,800 kbps Limited bandwidth due to the fact that ISPs buy
their bandwidth from PT Indosat in US dollars but get paid in Indonesian Rupiah
4 million total Internet users in 2001 Many access through Internet Cafés 80% of Internet users live on Java or Bali
Indonesia – IT Infrastructure – Cutting Edge Technologies (cont.)
Factors that have limited e-commerce initiatives: Lack of a certificate agency (SSL) No domestic banks will guarantee Internet
transactions Package delivery infrastructure is extremely
weak
SPAM complaints in January 2003: 249
Indonesia – IT Strengths & Weaknesses
Economy still recovering from Asian Financial Crisis of 1997
If government continues loosing ownership restrictions, investors stand to reap big gains Remember: Indonesia is the 4th most populous country
in the world
State of telecom infrastructure a big problem Further deregulation is needed
JapanShane Morgan
Japan – Quick Facts
Total Population (2002)—126,974,628
Race—Japanese 99%
Median Age—33.2 years old
Land Area—377,835 sq km
Literacy Rate—99%
Currency—yen (JPY) ¥
GDP (2002)—$3.55 trillion (USD)
GDP per capita (2002)—$28,000 (USD)
Japan – History & Government
Founded in 660 BC
United in 400 AD as Yamato Japan
Following WWII: 2nd most powerful economy Government reformed–constitutional monarchy
Emperor is figurehead Executive branch—Prime Minister and cabinet Legislative branch—Bicameral Judicial branch—Supreme Court & lower courts
Japan – Govt. Regulations of IS
Information-Technology Promotion Agency (IPA) established 1970Information-technology SEcurity Center (ISEC) established 1997e-government & e-municipalitiesBasic Law on the Formation of an Advanced Information and Communications Network Society (IT Basic Law) passed 2000e-Japan Priority Policy Program and e-Japan 2002 Program
Japan – Economic Infrastructure
Free-market economy adopted following WWII
Economy grew at unprecedented rates during 1960-1990
Major economic recession in 1990’s
Negative growth in IT between 1996-1999
IT investment increased to ¥20.8 trillion (21.7% increase) in 2000
Japan – IS Skill Sets & Job Market
Information and communications industry employed 3.82 million people in 2000
Kyodo News survey of 150 Japanese companies: 90% planned to increase IT investments in
2003 31 companies indicated their total investment to
be ¥343.5 billion (up 11.8% from 2002)
Japan – IS Infrastructure
Hardware: Shipments of UNIX servers grew 30.0% in the
first half of 2001compared to 2000 Shipments of PCs increased 28.3% in the same
period
Software: Software market was ¥1.7 trillion in 2000 Expected to reach ¥2.9 trillion by 2004 ERP market at ¥38.5 billion in 2000
Japan – IS Infrastructure
Telecommunications: Telecommunication Business Law (TBL)
privatized NTT and introduced competition in 1985
Deregulation in 1996 Mobile phones outnumber fixed phone lines Subscriber Optical Fiber Network to be
completed by 2010
Japan – IS Infrastructure
Imports/Exports of IT: IT exports fell 11.6% in 2001 IT import growth fell from 32.1% to 8.1% from
2000 to 2001
Internet usage: 55.93 million by the end of 2001 44.0% penetration of total population 60.5% penetration of households
Japan – Foreign Investment
Foreign direct investment equals 1% of Japanese GDPNumber of foreign firms increasing by 15% yearlyCurrent foreign investors include: Thai Bank, Morgan Stanley Dean Witter, General Electric, Chanel, Ford, Microsoft, Wal-Mart, Deloitte & Touche, Caterpillar, Solo Cup and Cabot Microelectronics
Japan – Adoption of Technology
Strong curiosity in new technology
Japanese are not sophisticated customers
Japan Center for Economic Research survey Japan ranked 14th out of 31 countries Behind Singapore (5th) and Hong Kong (10th)
Japan leads Asian nations in IT mfg
Losing ground in overall IT industry
North & South KoreaCindy Branon
North and South Korea –Reunification Efforts began in 2000
Family members can reunite for the 1st time in 50 years
Railways connected in 6/03
Gaesung Industrial Complex groundbreaking in 6/03
Bilateral inter-Korean trade increased 22% for first 5 months of 2003 vs. 2002
CDMA telecommunications system in the planning stage
South Korea –Government Regulation of IS
Korean Intellectual Property Office- 50% Piracy rate
“Cyber Korea 21” - Promote E-Commerce
KOSDAQ – Stock Exchange for high-tech – 1996
Telecommunications – 1990 Privatized and Deregulated
South Korea –Economic Infrastructure
13th Largest Economy – 54% Services, 42% Industry and 4% Agriculture
IT exports $11.2 billion in’01
Major IT Exports – semiconductors, mobile phones, LCDs, PCs, monitors, satellite broadcast receivers
IT Imports – large computers, transmission equipment, software
South Korea – Information Systems Infrastructure
Hardware -2nd in memory semiconductor production
Mobile phones – CDM technology, GSM mobile phone
Exports $7.2 billion in ’01
Software – imported, foreign support
Demand for ERP and E-Commerce doubled number of software companies from ’99 to ‘00
South Korea –Telecommunications and Internet
Korea’s IT industry greatest strength
70% broadband usage in ’02, VDSL technology
25.6 mill Internet users, 23.2 mill can access by phone
E-Commerce – B2B- 89.8%, B2G - 7%, B2C - 2.8%
$30 mill in 1st qtr of ’02 E-Commerce transactions
South Korea –IT Strengths and Weaknesses
Superior telecommunications infrastructure
Low entry barriers and telecommunications cost
Major shortage of IT workers, 40,000, 2006 est. 140,000
South Korea – Cutting Edge Technology
ITM-2000 wireless service
VPN market, 34% increase in ’02
Advanced to 12th in world for global Informatization level
North Korea
90% of companies owned by the government
30% agriculture,32% industry and 37% services
$1.048 billion trade deficit
Computer networks in government and manufacturing
Optical fiber cable installed nationwide in ‘00
North Korea – Information Infrastructure
Pentium and Celeron class CPU production in ’01
1 internet provider, government
Korea Linux OS system
“Hana 21”- PDA
Cellular phones- GMC in ’02
SingaporeKendall Joseph
Singapore – Quick Facts
4.16 million people
3.38 million citizens & permanent residents
Chinese, Malay, Indian
Speak English, Mandarin, Malay, Tamil
GDP 2001 $106.3 billion
Per capita GDP $24,700
Singapore – The 5 National Shared Values
Nation before community & society above self
Family as the basic unit of society
Community support & respect for the individual
Consensus, not conflict
Racial and religious harmony
Singapore – Government Regulation of IS
Small island with no abundant natural resources
Recognizes most important resource is its people
Low-cost manufacturing to high-tech services
Transforming into information-driven global hub
Economic Development Board – maintain global competitiveness
Infocomm Dev. Authority – create digital future
Singapore – Economic Infrastructure & Impact on IS
Global success story of economic growth
Averaged 8% growth since independence in 1965
Only three downturns – 1985, 1997 & 2001
Highly developed financial services center
All major markets of Asia nearby – 2.8 billion people within 7 hour flight
Ranked #1 business environment in Asia in 2002
Venture capital firms and the government provided $8 billion (US) by 2001
Singapore – IT Skill Sets – Lifelong Learning
Level 1 - Infocomm Literacy: Promoting e-lifestyle
Level 2 - Infocomm Competency: Office applications & PC skills
Level 3 - E-Business Savviness: Non-infocomm professionals
Level 4 - Conversion: Conversion to programmers, systems analyst, network & DB admins
Level 5 - Infocomm Specialization: Critical and emerging skills
Singapore – Job Market Characteristics
Ministry of Manpower reports 2,128,500 in labor force (2002)
Majority completed secondary education – 17.8% college degree and 20.9% technical diploma or post-secondary schooling
106,100 positions defined as IT, expected to grow to 250,000 by 2010
Singapore – IS Infrastructure & Utilization:Hardware Manufacturing
Electronics account for 10% of GDP & 40% of all manufacturing output
3 key sectors: Hard Disk Drives, Printed Circuit Board Assembly & Semiconductor Wafer Fabrication
40% of the world’s hard drives
Future prosperity threatened by neighbors
Singapore – IS Infrastructure & Utilization:Software Development
1981 – National Computer Board established to train software developersS$80 million invested in 3 training centersProject partners were IBM and NECNixdorf, Hewlett Packard, Digital Equipment and Sperry joined by 1984Future software development efforts focus on e-commerce
Singapore – IS Infrastructure & Utilization:Telecommunications
1.9 million telephone lines & 2.7 million cell phones
SingTel publicly traded – government owns 78%
Industry liberalized regulations in 2000
5 ISPs – dial-up, Cable Modem, DSL and ISDN
Island is completely wired for broadband
Singapore connected to outside world Submarine cable to 100 countries 4 satellite land stations with access to 80 countries
Singapore – IS Infrastructure & Utilization:Import & Exports of IT
Imports few IT products in relation to what is exports
Exports hard drives, circuit boards and computer chips
Exports Knowledge
Singapore – IS Infrastructure & Utilization:Internet Usage
Singapore – “Internet Island”
59.4% have internet access at home
24.2% broadband connections – DSL, Cable or LAN
Internet access in computer labs of the housing projects
Singapore – IS Strengths & Weaknesses
Strengths: Government – Using technology to reshape the nation Citizens – Highly educated and ready for new economy Funding – From government & private venture capital Industry – Traditional industry open to new technology Network Infrastructure – Fast Internet connectivity
Weaknesses: Competition threat from neighbors with lower labor costs
Singapore – Opportunities for Foreign Investment
Outside investment welcomed
Recent major investments: XML training center – Microsoft (USA) Configure to Order UNIX Server production –
Hewlett Packard (USA) Wireless R&D center – Siemens (Germany) Security R&D – GemPlus (France)
Singapore – Adoption of Cutting Edge Technologies
Singapore defines cutting edgeGovernment is forward thinking and encourages industry to be innovativeTechnopreneur fund in 1999 - $1 billion (US) for high-tech startupsIndustry 21 initiative Encourage industry to use new technologies Foster fast changing environment Become a global hub of high-tech innovation
TaiwanBrandon McLain
Taiwan: Republic of China
Taiwan – Internet Usage
Taiwan –
Hsinchu Science-Based Industrial Park
Built in 1980, center of Taiwan's high-tech industrial development
Contributes to 10% of Taiwan’s GNP
Over 290 Companies; 90,000 employees
Integrated-circuit production, PCs and peripherals, telecommunications, optic-electronics, precision machinery, and biotechnology
Taiwan – Continue IT Success
Overall R&D funding will reach 3% of GDP by 2010 Establish a world-class academic environment over next 10 years Continued development of existing high-tech industries; and continue cultivating existing industriesImprovement in citizen knowledge and use of high tech products
Taiwan – IT Hardware
World’s 3rd largest supplier of IT hardware
Local firms produce 25% of World’s desktop PCs
Notebook PC’s command 58% of World Market; expected to hit 60% by 2004
Taiwan – IT Software
Average annual compound growth rate of around 25%
Development of potential export markets
Diversified range of better quality products, using international collaboration to promote the image of “First-rate Taiwanese software”
Taiwan – IT Software: 5 Goals
Product development
Technology development
Personnel training
Development environment
Integration (using Hsinchu Science-based Industrial Park )
Taiwan – IT Exports
Japan accounts for 44.9% of Taiwan’s software exports
USA accounts for 33.4% of software exports
Companies exporting to the USA are Trend, Acer, Sertek, Ulead, Newsoft and Springsoft
Growing export opportunities in China
Taiwan – Foreign Investment
Offer telecommunications enterprise services with no investment restriction Enter joint ventures with local consortia to run telecom business Providing consulting services to local carriers in fields such as management skills, technological know-how, operational supports, etc Forming strategic alliances with domestic operators to explore the international telecom market
