Digital Business and Sustainable Development

Asian Perspectives

Yongrok Choi

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351779524
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The Internet has ushered in a new era in the economies of networking. With the increasing need for optimization based on these network economies, the IT-based e-business has become a platform for study as well as daily practice. In a similar vein, global warming has raised many issues which come into conflict with traditional research and policies. The Internet revolution has also shifted our society from a government- and company-led economy to a 'netizen'- and consumer-led business world.

This book enlightens us on why a harmonized participation of traditional network members or interested groups is necessary and how we can create values from diverse fields of interests and objectives, including the corporate social responsibility (CSR) and eco-friendly productivity.

Digital Business and Sustainable Development integrates the platforms from these two fields of study based on the comparative analysis of Asian and other developing countries.

Part I
Sustainable governance

Overview

The most outstanding challenges in the twenty-first century may come from the strong effect of global warming and Internet revolution. It is quite striking that the former may bring a very complicated and complex, yet unsustainable, disaster to humankind, while the latter proposes the new frontier to solve these disasters with a cooperative network. As we know, environment has always been changing, and this environmental change brings the opportunities and threats simultaneously as history has shown. It is noteworthy that the optimistic, proactive leaders have changed the history, and this is the right time for the leaders like you, the readers of this book, to understand and overcome these challenges for the sustainable development.

The first part of the book will give an overview of the historical background of sustainable development and propose the most important governance factor of governance-oriented intermediaries. We live in the interdependent society, and thus each one of us belongs to these interdependent networks, such as human network, information network, cooperative social network, business network, etc. Unfortunately, some networks are not working properly due to the missing links among the activities of partners. To promote sustainable performance of all these networks, therefore, we desperately need to find out the governance factors for the interoperable mechanism among the participants. This performance-oriented governance is the paradigm of the digital business or web business as “the value creation based on the harmonized networking management”. The traditional studies have always focused on the competitive efficiency, while the two extreme challenges of global warming and the Internet revolution require harmonized procedural approaches to create the relation, maintain the relation, and finally to share the created values based on the collaborative relationship. Therefore, the role of network manager is the key concept for this book to analyze all the governance factors and to promote their role for the successful performance.

This part of the book will give an overview of the historical background of sustainable development and propose the most important governance factor for governance-oriented intermediaries. It shows how the relatively new paradigm of sustainable development has evolved through international consensus and how the relatively new paradigm of public–private partnerships, or the harmonized third sector, could be the optimal solution from the perspective of intermediation. Most of all, this study emphasizes governance, resulting in the following proposition of the intermediary role of public–private partnerships in a strength–weakness–opportunity–threat matrix: facilitator, collaborator, network manager, and service provider.

1
Overview of sustainable development

1. Background of the green wave advent

The most outstanding challenges in the twenty-first century may come from the strong effect of global warming and Internet revolution. It is quite striking that the former may bring a very complicated and complex, yet unsustainable, disaster to humankind, while the latter proposes the new frontier to solve these disasters with a cooperative network. As we know, environment has always been changing, and this environmental change brings the opportunities and threats simultaneously as history has shown. It is noteworthy that the optimistic, proactive leaders have changed the history, and this is the right time for the leaders like you, the readers of this book, to understand and overcome these challenges for the sustainable development.

Environmental issues are one of the most challenging cases of traditional market failures, because a decision unit can use up all environmental resources, with resulting deterioration for other decision units. If any economic entity, such as manufacturing companies or household consumers, disposes its waste, dirty water, and greenhouse gases (GHGs) during the production and/or consumption process, it does not need to pay for these undesirable outputs of its action unless the resulting environmental deterioration affects this economic entity directly. Unfortunately, most of the company’s undesirable outputs such as GHGs affect other companies and the public, even in other countries, as there are no time and space limits. Environmental harm can occur in a specific area during a specific time, but can have global effects for a much longer period. Therefore, it is extremely difficult to deal with this kind of traditional market failure.

Nonetheless, such a company and/or its country may be blamed around the world, and its reputation may suffer. Thus, companies and governments should give greater consideration to these environmental issues, because if they fail to do so, there is no guarantee of the sustainable performance or sustainable management. Therefore, all economic entities should harmonize the short-term objectives of profit maximization and long-term sustainable performance. Thus, this harmonization is crucial in overcoming the ever-increasing, complex challenges of our environment and society.

How can we establish this harmonized value in our daily lives? Fortunately, we have the strong impulse of the Internet, which gives us new hope to analyze, monitor, measure, and compensate for undesirable outputs of all our daily life. For example, a person can buy a coke and drink it, after which, he or she should dispose of the empty can smartly enough to receive his or her environmental protection deposit back. Following the same logic, if a company produces more dirty water by increased production and/or deteriorating technologies, it should pay more to compensate for its waste (or consumption) of precious environmental resources, such as clean water and clean air, resulting in higher loyalties from potential customers in the long term. All these decisions and activities require fair and precise evaluation of the market failure of the individual or company. Moreover, there should be substantial cooperative networking to enhance better technologies and eco-friendly productivity, and to create the values based on a value-sharing system. The Internet revolution could bring these green information technology (IT) solutions.

Since the two issues are the most outstanding challenges of the contemporary global economy, it is important to understand the foundations of their connection and their role in establishing an optimal control path for the new frontier of sustainable development or green growth.

From this perspective, Korea, China, and Japan, the northeast Asian countries, are in a unique position, since the region is the most economically dynamic in the world, especially in terms of its IT success. Moreover, Korea hosts the Green Climate Fund, so-called second International Monetary Fund in the field of green growth, and China has experienced serious environmental problems of particulate matter (PM) resulting from its rapidly growing economy. Beijing has PM smog for more than one-third of the year, directly and indirectly resulting in deaths of thousands of people. This industrial disaster is transferred to the Korean peninsula and Japan, and thus, international cooperation is not an option in the region, but a necessary survival tool to overcome environmental problems in Northeast Asia. This study deals with this region as the most outstanding dynamic area in the world with many insightful field-oriented case studies. In the following chapters, we first deal with the historical background of sustainable development, then, with the conceptual characteristics of sustainable development, and finally, with the paradigm shift from traditional business and economics toward green business and green economics.

2. The green wave in Northeast Asia

Since the turn of the twenty-first century, humankind has been experiencing rapidly changing environmental conditions, resulting in turmoil and a paradigm shift. Global warming and a worldwide environmental crisis are the phenomena behind the fourth revolution of the green wave [1]. For example, China faces huge environmental challenges and costs, especially to clean up air pollution, which it is trying to do on its own. China estimates that pollution cost is roughly 3.5 per cent of gross domestic product (GDP) in 2010, while life expectancy in the northern provinces of China has decreased by about 5.5 years due to air pollution [2]. Almost 75 per cent of Chinese biggest cities failed to meet the country’s environmental protection standards, and only 19 out of 74 larger cities met the standards. It is very common for air pollution in most parts of China to breach levels considered by some experts to be hazardous. This has drawn much public rage and became a worry for the government, which fears any discontent that might challenge stability. Therefore, China declared “war against pollution” at the opening of the annual meeting of parliament in March 2014. The government unveiled detailed measures to tackle what has become a pressing social issue. Curbing pollution has become a key part of efforts to upgrade the economy, shift the focus away from heavy industry, and tackle the perennial problem of overcapacity, with smog described as “nature’s red-light warning against inefficient and blind development” [3]. China should turn its back on being the so-called global factory, and instead, take a new step toward qualitative policies to curb its growth potential. China will cut outdated steel production capacity by a total of 27 million ton in 2015, reduce cement production by 42 million ton, and shut down 50,000 small coal-fired furnaces across the country. This could constrain its growth potential significantly, but at the same time, it will provide new approaches to playing a leading role in the green growth of global economy.

Korea and Japan have experienced similar challenging issues of environmental disasters, and th...