Asia’s information revolution

The rise of IT and the Internet have been boons to Asia, but not everyone has benefited. There are challenges to overcome, not least in the area of governance.

The global information revolution is having profound effects on economies, societies and politics in Asia. This should not be a surprise. After all, improved access to information is of fundamental importance to development, as it can facilitate the necessary improvement in an economy’s knowledge base, as well as more transparent and accountable governance. And information and communications technologies (ICT) enhance integration into the global economy.

But why have so many once-poor Asian countries been able to take advantage of ICT, more than other developing countries? The main answers are history, timing and China. The impact of the information revolution has been greater in Asia than elsewhere because the region has always been both an important producer and user of IT products. Indeed, Asia has always been fertile ground for informationbased activities. China was at the heart of arguably the first information revolution when it invented paper making and the printing press in the 9th century, and propagated to its neighbours a Confucian culture which values education. The contemporary information revolution arrived at the same time as China’s economy was opening up again, and as Asian countries were experiencing the most dramatic period of economic development that humankind has known.

Rapid progress in IT and investments in the necessary infrastructure have been key drivers of the information revolution in Asia, which in turn has underpinned rising levels of prosperity and education across the region.

Asian economies like Japan, Korea, Malaysia, the Philippines, Singapore, Chinese Taipei and Thailand are now all important producers of hardware, while Korea’s Samsung is now a global leader in many product areas, including smartphones.

Korea is the world’s most advanced player in ICT, according to the International Telecommunication Union (ITU), a UN body, which says that it is overtaking many other economies like the US, Japan and Germany which have much higher GDPs per capita than Korea.

A number of other Asian economies were ranked by the ITU to be in the world’s top 20 for the “ICT Development Index”, notably Japan (8th), Hong Kong-China (11th) and Singapore (12th). Other Asian countries stretch way back in the overall list of 155 countries, with Malaysia ranking 58th, China 78th, the Philippines 94th, Indonesia 95th and India 119th.

Rising levels of education are in part due to better access to ICT, while at the same time the ability to absorb and use information are being enhanced. Many Asian economies are also global leaders in education. The OECD Programme for International Student Assessment (PISA) ranks Shanghai-China, Korea, Hong Kong-China, Singapore and Japan in its top 10. China is also becoming an important research centre (see Databank). However, both Thailand and Indonesia are much lower down the list, reflecting Asia’s “education divide”.

The ICT revolution has facilitated the development of East Asia’s manufacturing production networks, or value-chains, that have enabled many economies to jump on a fast track to development. A classic example of these production networks is Apple’s iPhone. Its branding, design and marketing are undertaken in the US. Most of its high-tech components are produced in Germany, Japan, Korea and Chinese Taipei. And finally, the lower value-added assembly stage is conducted in China.

Meanwhile, many advanced countries have off-shored many back office functions, as well as creative processes, such as 3D animation, video game development, and sound engineering, to less advanced economies, such as India and the Philippines, with their strong English language and IT capabilities.

A key factor in the Asian story is youth. Asia’s “tech-savvy” young generation is vastly more informed, connected and empowered than their parents (and leaders), thanks to the combination of technology and improved education.

The information revolution has helped change the relationships between citizens and government authorities too. As democracy has taken hold in some countries, and civil society has asserted itself, several countries such as Bangladesh, India, Indonesia, Mongolia, Chinese Taipei and Thailand now have laws enabling the public to request and receive governmentheld information.

For China and other countries with one-party dominant states, the Internet, overseas travel and more open economies and societies have also improved public access to information. Surveys such as those by Freedom House may well judge the Internet and the press in China not to be free. Yet China is estimated to have around 500 million Internet users–that’s more than the US and Europe combined. Its social media is very active with China’s own version of Twitter, “Weibo”.

The Communist Party of China follows public opinion very closely, notably about corruption, as witnessed by the recent demise of once-political frontrunner, Bo Xilai. The outgoing president, Hu Jintao, remarked that combating corruption and promoting political integrity are of great concern to the people and, if not handled well, they could even cause the collapse of the party and the fall of the state. China is well aware that social media has played a role in mobilising political movements like the Arab Spring and the second People Power Movement in the Philippines.

Asia has been the success story of the past 50 years, as a wave of knowledge, innovation and progress as swept through the continent, starting with Japan in the 1960s and 1970s, and continuing with China beating a new path forward. The challenges of education and digital divides remain, and reforms are needed in several countries to boost telecommunications and electricity services. Nevertheless, future headlines will surely record that this was Asia’s century.

*John West spent 22 years at the OECD during which time he worked in the secretary-general’s office, and was head of Public Affairs. He helped launch the OECD Forum in 2000. John has worked in Japan and has travelled extensively in China and elsewhere in Asia.

Visit www.asiancenturyinstitute.com and www.oecd.org/china/

©OECD Observer No 293 Q4 November 2012




Economic data

GDP : +0.5%, Q4 2014
Employment rate: 65.9%, Q4 2014
Annual inflation : 0.57% Feb 2015
Trade : -3.0% exp, -3.7 imp, Q4 2014
Unemployment : 7.022% Feb 2015
More moderate expansion ahead? Composite leading indicators
Updated: 23 Apr 2015

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