Asia.com

Asia Encounters the Internet

K. C. Ho, Randy Kluver, C.C. Yang

• Publisher: Routledge
• Year: 2003
• Topic: Social Sciences
• eBook ISBN:
  9781134377473
• Subtopic: Computer Science General
• Index: Social Sciences

The internet is developing quicker in Asia than in any other region of the world. This book is the first comprehensive analysis of the information society in an Asian context, and the impact of these technologies in Asia. These impacts are inevitably uneven and conditioned by issues of telecommunications infrastructure, government policies, cultural and social values, and economic realities. The combination of original research, theoretical innovation and detailed case studies make this an important book for scholars and students in Asian studies, media studies, communication studies and sociology.

1: Asia encounters the Internet

K.C. Ho, Randolph Kluver, and Kenneth C.C. Yang

For some years, leaders in Asia have argued that Information Communications Technologies (ICTs) would play a significant role in economic, political, and social developments in Asia. There is some compelling evidence of the truth of this judgment, although the outcomes have frequently defied the hopes and dreams of planners. Of all the benefits promised by ICT proponents, the one which seemed to hold the greatest promise within Asia was that of economic development. These benefits may be viewed directly in terms of the creation of a booming market in information and communications equipment and networks, and indirectly in terms of the growing business applications that are linked to ICTs (e.g. online commerce, accounting, and communications). They may also be observed in the proliferation of Internet access, websites, and bulletin boards reaching millions of people, not only in the urban centers of Asia, but also in rural areas. Such developments have also led governments to see an efficient telecommunications infrastructure as a crucial element in the attraction of investments, becoming a priority investment alongside transportation and manpower in the basket of items essential to the building of a country’s economic competitiveness.

In order to gather a sort of “mid-term assessment” of the impact of these developments in Asia, the Internet Political Economy Forum and the Information and Communication Management Program at the National University of Singapore convened a conference of scholars and analysts on September 14 and 15, 2001 in Singapore. Dozens of papers were presented which examined a variety of issues associated with Asia’s encounter with the Internet, and the economic, political, and social consequences of this encounter. Although the events of September 11 grounded many of our North American participants, the conference was a success in helping us to understand the impact of the Internet in Asia. The goal of this book is to provide a representative sample of some of the issues with which individuals, businesses, and governments across Asia are grappling. The chapters presented in this book are broadly representative not just of the theoretical and policy-oriented issues that have come to the fore, but also of the very different regional and geographic diversity of Asia, and help to illustrate the very different ways in which Asians are encountering the Internet.

INTERNET AND DEVELOPMENT IN ASIA: A BRIEF SURVEY

The rapidly increasing global economic importance of the Internet is clearly demonstrated by the realization and application that the Internet can facilitate the discovery, publication, and dissemination of knowledge through its seamless global information infrastructure (OECD, 2000a). The Internet is particularly well suited to support and facilitate the creation and formation of a knowledge-based economy that emphasizes the acquisition, generalization, utilization, and diffusion of knowledge in all activities to create wealth (Latifah, 1999).

The economic promise of ICT has led many Asian countries to focus on information technology as a critical component of national development plans. Several statistical indicators may be used to represent and illustrate state-sponsored efforts at ICT developments (see Table 1.1). The share of GDP attributed to ICT has been on the rise in the past five years (between 1995 and 2000) for many Asian countries, most prominently in the developed economies in this region. For example, in Japan, the increase is from 5.3 percent in 1995 to 9.6 percent in 2000, while in China, the percentage increased from 2.9 percent to 5.7 percent during the same period. The relationship between economic development and the importance of ICT is clear, since most developed economies in this region show a high ratio of ICT to the overall GDP in 2000 (i.e. Hong Kong, SAR (8.7 percent), Japan (9.6 percent), Korea (7.4 percent), and Singapore (9.9 percent)). Even the lesser developed countries have seen some striking increase, such as in Vietnam, as the percentage has increased from 3.6 percent to 6.7 percent, and in the Philippines, where it increased from 2.6 percent to 4.2 percent.

As in the advanced economies of the West, the use of ICT has revolutionalized the modes of production and directions of economic development in Asia. In many cases, ICT has also dramatically changed Asian societies. In developed economies such as Hong Kong, Japan, Korea, Singapore, and Taiwan, the number of personal computers per 1000 persons doubled between 1995 and 2000. For developing economies such as China, Malaysia, Sri Lanka, and Vietnam, where the absolute number of personal computers has been much lower, the growth rate has been even more phenomenal. For example, in Vietnam, the number of personal computers almost doubled, from 4.6 percent in 1997 to 8.8 percent in 2000.

Many governments in this region have seen the adoption of ICT as a central part of strategic planning in the informationalization of their societies. The Internet is especially emphasized, since as it has relatively low

Table 1.1 ICT development in Asia

Sources: Data are compiled from ITU (2000), Yearbook of Statistics: Telecommunications Service 1990–1999, Geneva: International Telecommunications Union, and World Bank, Development Data Group [online]. Available: http://www.worldbank.org/data/countrydata/countrydata.html

technical and economic requirements and is thus suited for rapid deployment, allowing Asian countries to leap-frog into the Information Age. Most countries in this region have employed a combination of telecommunications policy deregulation, market liberalization, private and foreign investment, and government initiatives to expedite the diffusion of the Internet among their countries, with the result that within five years, the growth of the Internet population has grown dramatically across the region. For example, in China, the number of Internet users increased 325- fold in the years from 1995 to 2000. Japan and Korea have also witnessed rapid growth in the number of Internet users, with Hong Kong and a number of Southeast Asian countries (Singapore, Malaysia, Thailand, and Indonesia) experiencing more modest but nevertheless significant increases. The most dramatic improvements, however, have been in poorer countries, which started at very low levels. Thus the number of users in Japan increased by a ratio of 20, whereas in the Philippines the rate increased by 100 times and in Sri Lanka 122 times.

There are a number of governmental plans and policies in various countries that demonstrate how IT expenditures are justified by those advocating them. For example, the Chinese government identified the growth of ICTs as a sector in which the nation could potentially become internationally competitive, and by the late 1990s the government was clearly focused on enhancing the infrastructure so as to prepare the way for greater economic expansion (Kraemer and Dedrick, 2001). Likewise in Japan, where the government promises that it remains committed to the growth of this sector, in spite of criticisms that it has fallen behind in this sector (Kuroda, 2000). In Southeast Asia, Malaysia’s commitment to ICTs is integrated into a broader national development master plan called Vision 2020, which is designed to transform Malaysia into a “fully developed nation” by 2020 (Huff, 2001), a goal remarkable in its aspirations, and where formidable hurdles will have to be overcome if the status is to be achieved within the time frame. In Singapore, a plan called InfoComm 21 also aims to harness information communication technologies for national competitiveness and “improving the quality of life,” and moving Singapore into “the ranks of ‘first world economies’ of the Net age” (IDA, 2000). These policies, although selective, demonstrate the ways in which governments across Asia aspire to participate in the digital revolution. In fact, as in so many instances in the past, national goals were expected to be accomplished by the private sector. For example, a number of national telecommunications incumbents rushed to take advantage of the commercial potential of the Internet either by setting up a separate Internet service provider entity or strengthening existing communication infrastructure for leasing to private information service providers (Valingra, 1997).

The importance of the Internet, as well as other ICTs, in assisting developing countries has also been articulated by the development community for over twenty years. In some ways this is an article of faith and there are a number of practical difficulties in assessing whether or not it is attainable. In 1980, the UNESCO General Conference initiated the International Programme for Development of Communications, and in 1982, the International Telecommunications Union’s Plenipotentiary Conference established an independent commission to investigate the relationship between telecommunications and development. In 1994, then US Vice President Al Gore laid out his vision of the Global Information Infrastructure (GII) as “an essential prerequisite to sustainable development for all members of the human family” (Cukor and McKnight, 2000). Largely as a result of these expectations and the policies that have issued forth from them, the Internet has diffused at a far faster speed than past generations of communications technologies. In less than a decade, the Internet has reached fifty million users worldwide, a level which took the telephone seventy-four years, the radio thirty-eight years, the personal computer sixteen years, and television thirteen years to reach (Goldstein and O’Connor, 2000).

The promise of ICTs is enticing, not only for national governments, but also for regional groupings. For example, an e-ASEAN Task Force was established in late 1999 “to develop a broad and comprehensive action plan for an ASEAN e-space and to develop competencies within ASEAN to compete in the global information economy” (E-ASEAN, 2000). Many within the region argue that human development, through narrowing the digital divide, is a critical issue for ASEAN nations (Karnjanatawe, 2001). One critical argument is that income disparity and inequality lead to greater political instability; thus it becomes urgent for regional and international bodies to cooperate to promote ICTs, so as to guarantee that all nations and people share in the digital dividends, an approach affirmed in the 2001 United Nations Development Program Report (UNDP, 2001a and 2001b).

Besides the economic, political, and geopolitical considerations, personal interaction with information technologies is seen as critical for facilitating national integration into an information society. For example, China mapped out plans to establish a nationwide network linking every urban family and rural village (Wu, 1996). Likewise, the Malaysian government has adopted the PCFAIR Fund and USP Fund measures to boost computer and Internet literacy (Yang, 2001). The government of Singapore launched a National IT Literacy Programme (NITLP) to promote 350,000 Singaporeans’ IT skills in the workforce (IDA, 2001). IT literacy within the nation is also closely monitored and published annually as the InfoComm Literacy Report (IDA, 2001). Taiwan’s National Information Infrastructure Task Force also aggressively promotes computer and Internet literacy to increase the Internet population (Taiwan NII Task Force).

In the US and OECD nations, the Internet, along with other ICTs, has increased productivity, efficiency, and individual wealth as documented in numerous empirical reports (US Department of Commerce, 2000; Goldstein and O’Connor, 2000). Six major economic studies published in the US have concluded that the production and application of information technologies contributed to more than 50 percent of US productivity growth in the second half of the 1990s (US Department of Commerce, 2000). It was with this promise that many argued that the Internet and other information technologies will give poorer nations expanded access to markets, information, and other resources that were previously inaccessible, due to geographic and linguistic barriers, the lack of efficient logistics, and poor infrastructure.

It is clear, however, that the ability of the Internet to create new jobs, new business models, new industry sectors, and indeed, to quickly metamorphize the entire nation is often exaggerated. Hollywood movies, novels, and advertisements envision a world where consumers can sit in front of the computer and order whatever they want without leaving their “electronic cottage” linked by broadband fiber-optic networks. At this point, it is still too early to tell what the ultimate economic impact of the Internet will be, but it has become clear that the easy developmental models which accompanied the marketing of ICTs are hampered by a number of factors in the region, including excessive or inadequate policies, other infrastructural issues, bureaucratic morass, and the all too real digital divide. Along with these issues, the economic downturn of 2000 to 2002 also deflated many of the hopes of ICT promoters. For example, Goldstein and O’Connor (2000) point out that many governments in Asia will need to undergo massive regulatory and institutional changes if they are to eliminate market inefficiencies in their countries and take full advantage of ICT; at the same time, in this view, these steps are essential to make their local businesses competitive to survive fierce foreign competition.

Moreover, since the Internet offers this potential for economic expansion, inevitable political pressures arise. For example, in order to allow entrepreneurs to take full advantage of the flexibility and dynamism promised by the Internet, telecommunications markets must be liberalized, but this in itself can endanger national industries. Likewise, rebuilding telecommunications infrastructures to meet the capacity requirements and price developments for electronic commerce can divert shrinking national revenues from other critical tasks, such as education, healthcare, and other infrastructural investment. Moreover, laws and regulations pertaining to trade and competition, taxation, and consumer protection are often revised to create a friction-free environment for electronic commerce, which can endanger local tax revenues. How these issues are addressed will inevitably have an impact on the existing political systems, regulatory regimes, and social developments within Asian nations.

Due to their economic dependence on the US economy, and what seemed to be a compelling model in the US economy, many Asian countries also attempted to follow the “New Economy” development model that so many saw as the standard for achieving “higher, sustainable economic growth and higher, sustainable productivity gains” in the past decade (US Department of Commerce, 2000). With the global economic slowdown and the technology collapse, which for Asia lasted from 1997 until at least 2002, many of these hopes have been dashed. However, it remains an open question whether ICT can be an effective tool of economic development for Asian countries, including the deployment of upto- date information infrastructure, the penetration of consumer premise equipment for Internet access, computer and network literacy programs, and narrowing the digital divide (OECD, 1999).

At the time of writing, many parts of Asia have indeed been able to harness effectively the information technologies for commercial and social reasons, while other parts remain almost hopelessly left behind. Singapore, South Korea, China, Taiwan, and Japan are at the forefront of the devel-opment of new technologies, including mobile technologies, while at the other end of the spectrum, Laos, North Korea, and Burma, and Vietnam remain virtually isolated from the World Wide Web. Some Asian nations have become significant manufacturers of digital technologies and leading producers of software, and several Asian companies have become global competitors in the new economy. However, penetration rates for information technologies vary widely across Asia. While Singapore and South Korea have very high penetration rates, even within these nations there are significant pockets, often defined by ethnicity, social class, and rural–urban differences, where few of the benefits of the Internet have appeared.

In fact, contrary to the earlier promises of the equalizing effects of ICTs, and in line with the impact of all new technologies, the Internet has reinforced certain existing income and wealth inequalities with and between countries, and within different strata of a given society, a phenomenon fashionably termed as the “digital divide.” Hargittai (1998), in a study of the “international stratification” caused by the Internet, argued that the “Internet connectivity of a country depends on its overall position in the world system, thus on its development level, its financial and technical resources, and its culture.” Studies found that the Internet may yield smaller benefits in more rigidly regulated economies with tight labor and product markets and inefficient capital markets (Cohen et al., 2000; OECD, 2000b). In addition, nations with high-development-level status have the highest level of network connectivity while nations with lowdevelopment- level status have the lowest level of connectivity (Hargittai, 1998). In Cambodia and Vietnam, fewer than two in 10,000 people have access to the Internet (Romulo, 2000). On the contrary, more developed nations have Internet penetration rates comparable to Western Europe, the USA, and Canada. For example, 47 percent of Singaporeans use the Internet (IDA, 2001). In Taiwan, the Internet penetration rate is 32.8 percent as of November, 2001 (FIND, 2001). The inequalities within the Asian region both in economic terms as well as Internet development betw...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• ILLUSTRATIONS
• TABLES
• ASIA.COM
• CONTRIBUTORS
• PREFACE
• 1: ASIA ENCOUNTERS THE INTERNET
• PART I: PERSPECTIVES ON INTERNET AND DEVELOPMENT IN ASIA
• PART II: ISSUES AND IMPACTS