Reproduced from Information Technology in Asia: New Development Paradigms edited by Chia Siow Yue and Jamus Jerome Lim (Singapore: Institute of Southeast Asian Studies, 2002). This version was obtained electronically direct from the publisher on condition that copyright is not infringed. No part of this publication may be reproduced without the prior permission of the Institute of Southeast Asian Studies. Contents Individual articles are available from < http://www.iseas.edu.sg/pub.html > i © 2002 Institute of Southeast Asian Studies, Singapore ii Contents The Institute of Southeast Asian Studies (ISEAS) was established as an autono- mous organization in 1968. It is a regional research centre for scholars and other specialists concerned with modern Southeast Asia, particularly the many-faceted issues and challenges of stability and security, economic development, and political and social change. The Institute’s research programmes are Regional Economic Studies (RES, including ASEAN and APEC), Regional Strategic and Political Studies (RSPS), and Regional Social and Cultural Studies (RSCS). The Institute is governed by a twenty-two-member Board of Trustees com- prising nominees from the Singapore Government, the National University of Sin- gapore, the various Chambers of Commerce, and professional and civic organiza- tions. An Executive Committee oversees day-to-day operations; it is chaired by the Director, the Institute’s chief academic and administrative officer. © 2002 Institute of Southeast Asian Studies, Singapore Contents iii INSTITUTE OF SOUTHEAST ASIAN STUDIES, Singapore © 2002 Institute of Southeast Asian Studies, Singapore iv Contents First published in Singapore in 2002 by Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace Pasir Panjang Singapore 119614 Internet e-mail: [email protected] World Wide Web: http://www.iseas.edu.sg/pub.html All rights reserved. No part of this publication may be reproduced, translated, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2002 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the editors and contributors and their interpretations do not necessarily reflect the views or the policy of the Institute or its supporters. ISEAS Library Cataloguing-in-Publication Data Information technology in Asia : new development paradigms / edited by Chia Siow Yue and Jamus Jerome Lim. Proceedings of the ASEAN Roundtable 2000 held in Singapore from 12 to 13 October 2000 and organized by the Institute of Southeast Asian Studies, Singapore and supported by Konrad Adenauer Stiftung. 1. Information technology—Economic aspects—Asia, Southeastern— Congresses. 2. Communication—Technological innovations—Asia, Southeastern— Congresses. 3. Electronic commerce—Asia, Southeastern—Congresses. I. Chia, Siow Yue. II. Lim, Jamus Jerome. III.Institute of Southeast Asian Studies. IV. Konrad-Adenauer-Stiftung. V. ASEAN Roundtable (2000 : Singapore) HC441 A843 2000 2002 sls2002045686 ISBN 981-230-146-1 (soft cover) Typeset by International Typesetters Pte. Ltd. Printed in Singapore by Seng Lee Press Pte. Ltd. © 2002 Institute of Southeast Asian Studies, Singapore Contents v List of Tables vii List of Figures x Acknowledgements xii Contributors xiii 1 The Challenges of Information Technology: Introduction 1 Jamus Jerome Lim 2 Information Technology in Southeast Asia: 22 Engine of Growth or Digital Divide? Kenneth L. Kraemer and Jason Dedrick 3 ICT Industry Development and Diffusion 48 in Southeast Asia Wong Poh-Kam and Annette Amy Singh 4 Social and Political Impacts of ICT: How Will They Affect 68 ASEAN’s Agenda? Hadi Soesastro 5 Human Capital and IT in Innovation 83 and Growth in ASEAN Rajah Rasiah 6 E-Commerce in Southeast Asia: A Review of 111 Developments, Challenges, and Issues Aniceto C. Orbeta, Jr. © 2002 Institute of Southeast Asian Studies, Singapore vi Contents 7 Singapore as a Regional Information Technology Hub 147 Toh Mun Heng 8 Multimedia Super Corridor: Introducing a New Economy 177 in Malaysia Paramjit Singh Tyndall 9 ICT in Thailand: Initial Steps towards the New Economy 195 Sakulrat Montreevat 10 Assessing Global E-Commerce Policies: 216 A Perspective from Thailand Somkiat Tangkitvanich 11 Leapfrogging into the ICT Revolution: 239 The Case of Vietnam and the Transitional Economies Le Dang Doanh 12 Knowledge-Based Economy and Information Technology: 269 The Taiwan Experience Shin-Horng Chen and Meng-Chun Liu 13 Bangalore: IT Cluster in India 295 R. Venkatesan and Samuel V. Malvea Index 321 The Editors 327 © 2002 Institute of Southeast Asian Studies, Singapore List of Tables vii 2.1 Internet and E-Commerce Readiness, in Asian and 32 Non-Asian Countries, 1998 2.2 Computer Industry Growth Rates, 1987–97 42 3.1 Production of Electronics Goods: ASEAN-5 and 52 Selected Asian Countries, 1985–98 3.2 Composition of Electronics Production: ASEAN-5, 54 1985, 1998 3.3 Estimated Market Size for Electronics Goods: 57 ASEAN-5 and Selected Asian Countries, 1988–98 3.4 Market Composition of Electronics Goods: ASEAN-5, 59 1988, 1998 3.5 Estimated Composition of IT Market in ASEAN and 60 Selected Asian Countries, 1995 3.6 Information Society Index: Rankings for Asian 61 Countries, 2001 3.7 ICT Penetration Indicators: ASEAN and Selected 62 Asian Countries 4.1 ICT Infrastructure and Access in ASEAN and East Asia 75 4.2 Comparison of the Costs of a Local Call and an 76 International Call 5.1 High-Tech Human Capital Indicators of Selected 93 Economies 5.2 IT and Telecommunication Indicators of Selected 98 Economies © 2002 Institute of Southeast Asian Studies, Singapore viii List of Tables 5.3 High-Tech Endowments of Selected Economies 100 5.4 PC Penetration and GNP per Capita in ASEAN, 1998 105 6.1 E-Commerce Matrix 114 6.2 World-Wide E-Commerce Growth 116 6.3 Estimates of E-Commerce Sales Compared with 116 Various Benchmarks 6.4 E-Commerce Revenues by Activity, of Selected Firms 118 6.5 Distribution by Top-Level Domain by Host Count, 120 January 1995 to January 2000 6.6 Internet Hosts, Users, and Personal Computers 121 6.7 SSL Server Survey, July 1998 122 6.8 Estimated Number of People Who Are Online 123 6.9 Internet Dial-Up Accounts Forecast 124 6.10 Telephone Lines and Cellular Subscribers 125 6.11 Television Households 126 6.12 Households in Asia with Cable, 1998 126 6.13 E-Commerce Impact on Various Distribution Costs 135 7.1 R&D Expenditure and Manpower in Singapore, 1999 163 7.2 ASEAN-10: Basic Statistics on Social and 165 Economic Variables, 1999 7.3 International Digital Divide: Individuals with PC 171 Internet Access (excluding wireless access) 8.1 MSC Milestones and Targets 180 8.2 Seven Flagship Applications of the MSC 182 8.3 MSC Statistics on Companies, Jobs, and Investments 186 8.4 Malaysian Demand for ICT Workers, 1998–2005 189 9.1 Thailand: Sectoral Shares and Growth of GDP 196 9.2 Thailand: IT Market Growth Profile 198 9.3 Thailand: IT Market by Industry Segment 199 9.4 Thailand: Exports and Imports of Computers and 199 Computer Parts 9.5 ASEAN-5: Internet Indicators 201 9.6 ASEAN-5: Telecommunication Indicators 203 9.7 ASEAN-6: E-Commerce Readiness Assessment 208 10.1 WTO Work Programme on Electronic Commerce 225 10.2 Examples of Thailand’s Commitments to Liberalize 228 the Service Sectors © 2002 Institute of Southeast Asian Studies, Singapore List of Tables ix 10.3 Examples of U.S. Business Method Patents 232 11.1 Size of the Economy: Southeast Asia, 1999 247 11.2 Communications, Information, and Science and 249 Technology: Southeast Asia 11.3 Education: Southeast Asia, 1980 and 1997 250 11.4 Selected Economic Indicators of Vietnam, 1991–2000 252 12.1 Taiwan’s Integrated Circuit Industry Statistics 281 12.2 R&D Intensity and Capital Expenditure Intensity 282 of the Integrated Circuit Industry: USA, Japan, South Korea, and Taiwan 12.3 Geographical Breakdown of Taiwan’s Foundry Services 283 Clients 12.4 Indicators of Information Application for Selected 287 Countries, 1999 12.5 Determinants of Labour Productivity, 1996 288 13.1 IT Industry in India 298 13.2 Indian Software Industry by Type of Activity 300 13.3 Indian Software Exports by Type of Services 300 13.4 Indian Software Companies by Segment of Software 300 Development 13.5 Indian Software Companies by Software Development 301 Application 13.6 Location of Software Companies in Major Urban Areas 302 13.7 Location of IT Firms in Major Urban Areas 303 13.8 Start-Up of Firms by Location in India 303 13.9 Exports from Bangalore Software Technology Park 304 13.10 Comparison between Silicon Valley and Bangalore 309 © 2002 Institute of Southeast Asian Studies, Singapore x List of Figures 1.1 Conceptual Pillars of E-ASEAN 12 2.1 The Productivity Paradox of IT: Annual Change in 26 Computing Investment and Productivity for the United States, 1965–94 2.2 Growth in IT Spending and Productivity 29 2.3 Payoffs from Non-IT Investments, in Asian and 30 Non-Asian Countries 2.4 Payoffs from IT Investments, in Asian and Non-Asian 30 Countries 2.5 Gap in Internet Readiness between Asian and 33 Non-Asian Countries 2.6 PC Diffusion and GDP per Capita, in Asian and 35 Non-Asian Countries 2.7 Information Services as Link between Production 43 and Use 3.1 Conceptual Framework of the Information Economy 50 5.1 Human Capital, IT, Innovations, and per Capita 86 Incomes: A Systemic Model 5.2 Primary School Enrolment in ASEAN, 1980 and 1996 89 5.3 Secondary School Enrolment in ASEAN, 1980 and 1996 90 5.4 Tertiary Education Enrolment in ASEAN, 1980 and 1996 91 5.5 Scientists and Engineers in R&D in ASEAN-5, 1985–95 94 5.6 Internet Penetration in ASEAN-5, 1998–2003 95 © 2002 Institute of Southeast Asian Studies, Singapore