Is Asia the place to be in the 21st Century? Are Asian countries building up a lead by investing in the digital economy? Which are the Asian countries to watch the closest? How should Europe be responding in order to win the global race, or at least remain competitive within it? The importance of these questions in the light of the Global Race underway and how the UK should respond will be a major focus of this blog in the weeks ahead.
The European Internet Foundation (EIF) – of which I am a co-founder – begins preparation later this month of a report to be issued in March 2014 on the Digital World in 2030, challenging European policy-makers to put Europe’s place in the digital world at the centre of their priorities. In the wake of a successful visit to Silicon Valley last summer (see Blog 14 Sept 2012), it was agreed that it would be a good time to undertake a fact-finding study visit to Asia, entitled ‘Examining Asia’s dynamic digital development’.
The study visit was superbly organised by the EIF for 6 MEPs from diverse political groups, with the help of its business and Association members, in particular the GSMA (mobile operators). Within the space of 4 days, the visit focussed on 3 locations: Hong Kong, Shenzhen (China), and Seoul (South Korea). The meetings schedule fitted in experts of both Asian companies leading the way in IT and telecom developments, such as Hutchison Whampoa Ltd, Huawei and Samsung, and European companies such as BT, Alcatel Lucent, Ericsson and NokiaSiemens Networks that are successfully penetrating the Asia Pacific markets thanks to their technology and market leadership in key sectors.
Hong Kong is the quintessential example of a bridgehead between West and East. Impressive it was to see the operations of the HWL Terminal for container transport, one of the largest in the world, computerised to ensure the most effective operation. Operating under the “3″ brand, Hutchison has been leading the way in 3G development worldwide. With a turnover of just under £30 billion, employing a quarter of a million people in 52 countries, over one third of its business now in Europe. Interestingly, however, little of its business is currently done in the US. Cybersecurity is a matter of profound concern.
China, at least in the Shenzhen area, containing more than 4 times the population of Beijing, seems a rich, enlightened, tolerant, innovative and welcoming city. Huawei, a company founded in 1987 has its HQ there, not far from the HK frontier, with a global turnover of around $35 billion. The company employs around 150,000 people, of which about half are focussed on R and D. Their intention is to double their R and D staff in Europe over the next 3 years. A real concern was expressed for the need to protect Intellectual Property rights (IPR). “Only by strengthening IPR protection can innovation be promoted in society.” The same situation prevails, however, as for Hutchison’s above, with very little investment in the US, although growing in Western Europe.
Listening to the testimony of start-up entrepreneurs at 3W Coffee, with ambitions to expand to other major Chinese cities, there appears to be a real willingness to foster start-up companies to promote the Internet. Tellingly, their evidence showed the high priority given to investment in digital infrastructure by the Chinese authorities. One statistic illustrates the speed of change…the number of college graduates rose to 6.6 million, a 6x growth over 10 years…but having 600 million young people shows the extent of the problem on future employment.
These visits were then followed by a 2 day visit to South Korea. A real eye opener for those unaware that this country is the most connected country in the world. A densely populated country of around 50 million people, imbued with a high technology culture, with strong Government support for ICT, stemming from the financial setbacks in the late 1990s. The results are impressive by any standard, with 30 million subscribers expected for 4G by the end of the year. Also fixed broadband speed for all households is aimed to be at 1000mps.
More of the Korean example in my blog next week. But it is already crystal clear that the leadership that the West had in mobile technology through the GSM standard in the 1980′s has evaporated. The aim for ubiquitous access illustrates that this becomes a key factor to enable business to grow and compete. Being connected to reasonably fast broadband is a necessity, not a luxury. A solid physical infrastructure is a pre-requisite for expanding the wireless/mobile one, the area of growth for the future.