Interesting People mailing list archives
IP: The Impact of the changes in the global digital world: An entrepreneurial East Asian perspective.
From: David Farber <farber () cis upenn edu>
Date: Mon, 4 Oct 1999 07:09:36 -0400
[As a Senior Fellow of the SEI Center at the Wharton School, I was at the meeting and was honored to hear WyWy. I asked him for the transcript of the talk and recommend it to you as a very insightful look at Eastern Asia djf] The Impact of the changes in the global digital world: An entrepreneurial East Asian perspective. 1991 SEI Centre Board Meeting The Wharton School University of Pennslyvania September 30, 1999 Inn at Penn Philadelphia Y Y Wong Founder & Chairman The Wywy Group Singapore I have been given 7 minutes to share my views on the impact of the changes in the global digital world from an entrepreneurial East Asian perspective. The economies and level of technological development of East Asia are not uniform. By way of example, 40% of Singapore household owns at least one PC, as compared with 48% in the US. Like the US, 85% of all Singapore schools not only use computers but have access to internet. On the other hand many countries do not even have reliable telecommunication services. Goldman Sachs recently reported that Internet users in the Asia Pacific are forecast to grow at 40% a year, twice as fast as the US to reach 64 million by 2003. Sales are projected to hit US$32 billion by 2003 from just US$700 million last year and online advertising may be worth up to US$1.5 billion by 2001. But as an informed optimist I wonder if the euphoric enthusiasm is justified. Although the forecasts are impressive Asia has a long way to go when we consider the forecast of US$32 billion against US$1 trillion. Not counting Japan, today Asia has only 13 million cybershoppers compared to 70 million in the US. My hesitation stems from the fact that many developing economies in Asia lack reliable telecommunications. Vague and unpredictable legal framework. Taxation issues governing e-commerce are uncertain. High import duties across the region. Informal business practices are rampant. Proportion of the population who uses the Net is far from critical mass. Although English is becoming popular, the extensive use of local languages and the use of different currencies are formidable obstacles. Besides the use of credit cards and electronic payments are still in its embryonic stage. Only a week earlier, the official Xinhua news agency in China reported that a Beijing experiment by volunteers to pay for online purchases with electronic money or credit cards was a failure. The volunteers had to pay cash for everything. Although Internet growth rates are among the highest in the world, Asians outside Japan still accounts for only about 8% of the total wired population. A poll of Asian executives on Internet usage shows that 56% are using it for e-mail, 42% for research and 46% for news. East Asia is still struggling to recover from the economic crisis. It will take 4 to 10 years for the affected economies to regain their prosperity. The financial crisis had destroyed corporations, banks, damaged economies and reduced the standards of living of millions of Asians. For more than 3 decades, influence dealers created enormous wealth. Influence dealers operated on "know-who," rather than "know-how." Many of the companies affected by the economic crisis built their wealth by using influence to create privileged franchises not by creating value. They benefit from governments prepared to create monopolies, grant exclusive licenses, or protect domestic companies through tariffs and other means. They are the dealmakers, adept at exploiting business and political connections. When the economy was riding high even chickens can fly. Now, we have a generation of dizzy, dispirited and disheartened chickens with zero value-creating capabilities looking to technology for resuscitation. It is noteworthy that In spite of the severe economic downturn, there was no gush of assets for sale or were there the fire sales and bargains to be had. This is simply because the most affected countries lacked well-enforced bankruptcy laws to free insolvent assets from the owners. In Indonesia and Thailand new bankruptcy laws were introduced in mid-1998 but the procedure under the new law in Thailand may take up to 7 years while in Indonesia complaints of form without content and bribe taking are widespread. Globalisation and entrepreneurship are inseparable from technology. Much has been written on the entrepreneurial spirit of the overseas Chinese, but I beg to disagree. Although the overseas Chinese are enterprising they are not necessarily entrepreneurial. Unlike Japan, most of the wealth created by overseas Chinese was created from sociological disequilibrium, not technological revolutions. It is therefore not surprising that there are very few global brand names or revolutionary products from East Asia. In e-retailing East Asia is a buyer not a seller. While East Asia has invested heavily into technical education and leaders in the region see technology as the gateway to economic development their aspirations are often driven by the mistaken notion that superior qualifications rather than lifelong learning and entrepreneurship are the key determinant for success. It is painful is to see the large number of East Asian engineers, masquerading marketers and entrepreneurs. The important question for East Asia and the world to ask is why is America the beacon of entrepreneurship and the mother of all wealth creation. The answer is simple. The physical expression of entrepreneurship is salesmanship. While it is disdained in many countries, salesmanship is respected, esteemed and admired in the US more than anywhere in the world. This is particularly so in East Asia as the dominant culture is shame. Unlike the West where the dominant culture is guilt, the East Asians are hurt even when they receive a "no" for an answer. Rejection is inseparable from selling and getting it wrong is part of getting it right. For those reason, the favoured traditional profession were those that do not require going to the people. The most popular professions were those that require people going to them like government officials, military officers, professors and doctors. There is no more argument if digital technology will have a major impact on East Asia. The only remaining question is how fast? East Asia know why they must embrace technology, but they do not know how and what to do. The opportunities are therefore immense for those who know the unknowable, as that allows them to form strategic alliances with East Asian companies to do the undoable.
Current thread:
- IP: The Impact of the changes in the global digital world: An entrepreneurial East Asian perspective. David Farber (Oct 04)