An online version of the agenda can be viewed here.

The presentation can be viewed here.

China’s productivity has been lifted by a massive expansion of private enterprise, and a shift of labour out of agricultural work and into more productive jobs in industry. China’s average return on physical capital is now well above the global average, according to Goldman Sachs. A decade ago it was less than half the world average.

Why have the Asian economies led the pack? The most important determinants of longer-term productivity growth are the rate of adoption of existing and new technologies, the pace of domestic scientific innovation and changes in the organisation of production. These, in turn, depend on factors such as the openness of an economy to foreign direct investment and trade, education and the flexibility of labour markets.

Using a composite index of technology penetration and innovation (including, for instance, computers and mobile phones per head), Mr Cates finds a strong link between the rate of increase in an economy’s technological progress and its productivity growth. China’s level of technology is still well behind that in America, but it has seen by far the fastest rate of improvement over the past decade. This is not just because China started from such a low base but also because it is more open to foreign investment than many other emerging economies, including Japan and South Korea when they were at similar stages of development. China’s TFP growth is almost twice as fast as that of Japan and South Korea during their periods of peak economic growth.

]]> http://lirneasia.net/2009/11/productivity-driving-growth-in-china-and-asia/feed/ 0 http://lirneasia.net/2009/02/sri-lanka-narayana-murthy-declined-to-be-it-advisor-to-president/ http://lirneasia.net/2009/02/sri-lanka-narayana-murthy-declined-to-be-it-advisor-to-president/#comments Wed, 18 Feb 2009 12:54:17 +0000 Chanuka Wattegama http://lirneasia.net/?p=3777

Infosys Technologies chairman and chief mentor N.R. Narayana Murthy has declined to be the IT advisor to the Sri Lankan government, the IT bellwether said Wednesday.

In a letter to Sri Lankan President Mahinda Rajapaksa, Murthy said he had decided to withdraw from being the advisor due to personal reasons.

“I thank you for the courtesy shown to me during my recent visit to Sri Lanka. I have decided to withdraw from being the advisor to your government due to personal reasons,” the company quoted Murthy’s letter to Rajapaksa.

Murthy was appointed Feb 13 as Rajapaksa’s international advisor on IT after he was invited to be the chief guest at the launch of “2009 – Year of English and Information Technology” at the presidential secretariat in Colombo.

The Sri Lanka government launched the IT initiative to meet the demands of the 21st century in skills and capacities, mainly in the rural sector.

Incidentally, Murthy told IANS Tuesday that the role of an advisor was to keep his mouth shut and open it only when asked for his views based on experience.

“I am advisor to president of South Korea, prime minister of Malaysia and have been made advisor to Rajapaksa,” Murthy said on the sidelines of a function at the Infosys campus in the electronics city, about 30 km from here.

A day later, Murthy declined the offer.

Read the full story here.

In an interview with BizIT, Jaikishan Rajaraman, GSMA director of product and service development, said the number of users in Asia subscribing to HSPA will swell from 26.5 million to 53.5 million over the next 12 months. Fuelling this trend are soaring demand from both businesses and consumers, coupled with falling prices of mobile broadband services, he said. This trend is expected to be mirrored in other parts of the world, including Europe and the US.

In August, GSMA – a global trade organisation comprising more than 750 mobile phone operators around the world – reported that the number of HSPA subscribers worldwide had exceeded 50 million, from 11 million a year ago. There are 197 HSPA commercial deployments in 92 countries, with Asia currently accounting for 46 per cent of the global HSPA subscriber base, according to GSMA.

‘Mobile broadband has truly made socio-economic impact, especially in emerging markets like Indonesia, Malaysia, Sri Lanka as well as developed markets like Australia, Japan and South Korea,’ said Mr Rajaraman.

Read the full story in Asiaone Business here.

As Taylor Reynolds, an OECD analyst, puts it, innovation usually comes in steps: newcomers first rent space on an existing network, to build up customers and income. Then they create new and better infrastructure, as and when they need it.

In France, for example, the regulator forced France Télécom to rent out its lines. One small start-up firm benefited from this opportunity and then installed technology that was much faster than any of its rivals’. It won so many customers that other operators had to follow suit. In Canada, too, the regulator mandated line-sharing, and provinces subsidised trunk lines from which smaller operators could lease capacity to provide service.

In South Korea, where half the population lives in flats, each block owns its own internal cabling and allows rival operators to put their equipment in the basement; each tenant then chooses which to use. In Japan, politicians put pressure on the dominant operator, NTT, to connect people’s homes by high-speed fibre lines. And this week the communications ministry indicated that it will make NTT open those fibre connections to rivals.

As broadband grows more popular, the political mood may change in many countries. At present, consumers are often misled by the speeds that operators promise to deliver. Soon regulators can expect to face pressure to ensure truth in advertising, as well as to promote easier access.

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The next highest was Singapore at a surprisingly low 23rd, and Malaysia at 34th. The top 35 countries are otherwise dominated by Europe, Australasia and North America. 

The biggest revelation was that most Asian countries are sliding down the rankings.
Singapore was the most prominent to fall from grace, falling to 22nd from seventh position in 2005. China fell to 65 from 57, India from 87 to 113, Thailand from 46 to 62, the Philippines from 41 to 66 and Indonesia from 96 to 106.  

Other countries to slide included Maldives, Sri Lanka, South Korea, Brunei and Myanmar while Japan, Malaysia, Vietnam and Cambodia improved their rankings. Sweden topped the rankings followed by Denmark, Norway and the United States. Read more.

South Korea boasts of being the most wired nation on earth. In fact, perhaps no other country has so fully embraced the Internet. Ninety percent of homes connect to cheap, high-speed broadband, online gaming is a professional sport, and social life for the young revolves around the “PC bang,” dim Internet parlors that sit on practically every street corner.

But such ready access to the Web has come at a price as legions of obsessed users find that they cannot tear themselves away from their computer screens.

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To get a clearer picture of where the US stands, the House Energy and Commerce Committee approved legislation that would develop an annual inventory of existing broadband services — including the types, advertised speeds and actual number of subscribers — available to households and businesses nationwide.

The bill, introduced by Rep. Ed Markey, D-Mass., is intended to provide policy makers with improved data so they can better use grants and subsidies to target areas lacking high-speed Internet access. He said in a statement last week that promoting broadband would help spur job growth, access to health care and education and promote innovation among other benefits.

The inventory wouldn’t cover other countries, but a cursory look shows the US lagging behind at least some of them. In South Korea, for instance, the average apartment can get an Internet connection that’s 15 times faster than a typical US connection. In Paris, a “triple play” of TV, phone and broadband service costs less than half of what it does in the USA. Read more.

THE number of mobile-phone subscribers in the 30 countries of the OECD reached nearly 933m in 2005, equivalent to around 80 for every 100 people. Tiny Luxembourg has the highest penetration rate, with 157.3 subscribers for every 100 people. Indeed, it is one of 14 countries in which there are more subscribers than people. This is partly because users increasingly have several SIM cards for use with the same phone. The rapid growth in pre-pay accounts—from 4% of total subscriptions in 1997 to 42% in 2005—is also a factor, as such accounts often lie inactive. South Korea and Japan are the only countries with more third-generation (3G) phone subscribers than 2G ones.

Source: http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=9537136

Rival Manufacturers Chasing the iPhone – New York Times

Analysts and executives in South Korea say that the iPhone, with its full-scale Internet browser and distinctive touch screen with colorful icons, is more than just another souped-up cellphone. They fear this Silicon Valley challenger could leap past Asian makers into the age of digital convergence by combining personal computing and mobile technologies as no device has before.

“Apple’s impact will be bigger than Asian handset makers think,” said Kim Yoon-ho, an analyst in Seoul at Prudential Securities. “The iPhone is different from previous mobile phones. It is the prototype of the future of mobile phones.”

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Zimbabwe, the country that leads all of South Asia according to the ITU, is not in the top- 70 that is provided. Nigeria, on the other hand, is just behind Sri Lanka, at 62. Unless some action is taken, next year, both Nigeria and Pakistan will be ahead of Sri Lanka.

PRESS RELEASE Asian Countries Advance in the Economist Intelligence Unit’s 2007 E-Readiness Rankings, as the Goalposts of Digital Leadership Shift

E-readiness continues to improve around the world in 2007, but achieving it is becoming more complex. To reflect this, the Economist Intelligence Unit has “raised the bar” of e-readiness by modifying its ranking methodology. This change in methodology, along with underlying improvements in individual countries, has led to changes in the league table. Several countries, particularly in Asia, have seen their positions improve, while others have experienced (mostly slight) declines. At the same time, the fundamental tenets of e-readiness remain unchanged, and the leaders in 2006 are still leaders today — nine of last year’s top ten countries remain in that bracket.Denmark and the US retain their number one and two spots in the rankings (with Sweden also tied for 2nd), but Hong Kong (4th), Singapore (6th), South Korea (16th), Taiwan (17th) and Japan (18th) have experienced a boost in 2007 in both scores and ranks. This is due in no small part to their governments’ vision and commitment in pushing digital development, and to continued progress in adoption of broadband and other advanced infrastructure.

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Bridging the Divide: Building Asia-Pacific Capacity for Effective Reforms

Samarajiva also chaired the two day conference held in Seoul, South Korea from 31 August – 01 September 2006.

The DOI measures the magnitude of the digital divide in a country, and uses the percentage of population covered by mobile cellular telephony, internet access tariffs and mobile cellular tariffs as a percentage of per capita income, proportion of households with fixed telephone, computer, internet access at home, etc to measure digital divide.

Measuring the DOI in Indonesia was carried out as part of the six-country study LIRNEasia is currently undertaking, and it was found that there is a significant variance from what was calculated by LIRNEasia and the figures calculated by the ITU.

Some methodological issues with the DOI – no common methodology that operators follow with regard to population coverage. Population coverage claims by operators cannot be verified. There is also a need for a better indicator for mobile coverage. Another problem is that the OECD low user basket has little relevance for developing countries where use is generally have higher average use. Lastly, there is a need for a common definition of a mobile subscriber.

Data issues faced included lack of coordination between NRAs and NSOs and lack of household level data like ownership of fixed phones, PC and Internet access.

Looking at telecom growth of different infrastructure in Indonesia, tells that internet growth has been pretty flat. Fixed wireless has seen a slight growth with the entrance of XXX in Indonesia. The mobile market, on the other hand, has seen continuous significant growth.

Indonesia is very low on the DOI list - it is in the cusp of the low group.

Three ways in which Indonesia can improve its DOI rating is through opportunity (by extending mobile coverage using USF; lowering prices by stimulating competition, etc), infrastructure (introduce new entrants in the fixed sector) and utilization (unbundling local loop to stimulate broadband rollout, etc).

Discussion of the paper to be presented by Rohan Samarajiva at the Digital Opportunity Forum, South Korea on August 30, 2006.

Stunning difference between fixed and mobile phone densities in the two parts of Asia (developed – HK, China, Taiwan, Singapore Australia and Korea, developing – Nepal, Bhutan, Papua New Guinea, Afghanistan and Myanmar). Developed countries have large telephone densities, whereas the developing countries have minute densities in comparison.

Looking at Sri Lanka, the Norther province has come up fast, in terms of telecom access (19% have access to telephones in the NP).

So there is a divide, but do we really need to promote ICTs? If it comes to spending taxpayer money, promotion of ICTs is not necessary, because there are more important needs like water, etc. But if it is to remove barriers to participation, then yes there is a need to promote ICTs.

How to reduce constraints? Liberalization through explicit regulatory regime, relaxation of entry controls and internal reform of incumbent or major operator.

Expansion of telecom in USA after breaking up of Bell monopoly (1892-1900) is parallell to that in SL when telecom was liberalised (1991-1999).

DG – Need to look at fixed & mobile separately to see whether it is fixed or mobile that has contributed to to the growth (slide # 8 )

In the Western Province, each new connection that is purchased provides a supplementary connection (i.e. to those that already have access to a phone). Whereas in the North-east for example, each new connection may connect an entire household, which was previously unconnected.

Bottom line: liberalisation narrows the gaps.

Difference between big-bang reforms and continuing reforms
Big bang reforms include privatization, licensing a second operator, etc; Continuing reforms include enforcing interconnection, etc.

Big bang reforms and continuing reforms both require in-situ expertise, latter more than former. Need the capacity to maintain the momentum of reforms. Some countries (eg Bahrain, UK) advertise internationally for the top job. Advantage is credibility and independence, because the individual is not part of the local ‘networks’.

Narrow conception – Expertise in government and national regulatory agency
Broad conception – Expertise in government and NRA + with all stakeholders, including consumer and civil society groups

Why in-situ expertise?
These people have tacit knowledge, enjoy a legitimacy that external consultants do not, are able to participate in the policy process betterthan external consultants, etc.

So how do we produce new experts?
Scholars without visibility and reinforcement (other scholars interested in the same issues in their country, or simple someone to bounce ideas off) alone cannot catalyze change.

CPRsouth, LIRNEasia’s capacity initiative, aims to identify scholars with likelihood of becoming in-situ experts, assists them to raise their Internet profiles, etc.

Ismail: Some of the problems the FCC has had with academics, is the time frames that they work with.

CPRsouth will carry out a knowledge mapping using ISI journals, citations, Scholar.Google, interviews, etc in order to identify young scholars interested in policy and regulation.

A conference will be held early next year, in addition to the development of a digital repository for archiving communication policy research, to promote CPR research.

Qualities of in-situ expertise
Just-in-time learning and Open-source research

JIT learning involves broad expertise with boundaries defined. With a knowledge of underlying theoretical issues, a network of research relationships, and the internet, JIT learning is a effective concept.

Open-source research follows the open-source software premise, which means that anyone has access to the source and can make changes, etc. Where policy research is concerned, speed is crucial. LIRNEasia puts research on the web in draft form and asks people to look at it, comment on it,and make suggestions, all in order to improve these drafts and work towards a final document. This ensures better output at the end of the day.

So the whole CPRsouth exercise is about narrowing the digital divide through the development of capacity. The gap can be bridged by removing policy-regulatory constraints and what better way to do this than building local, in-situ expertise.

DG – There’s a big gap between the divide that exists within the sector and the gap in capacity. The link between the two is not persuasive enough.
RS – Yes there is a gap, but the point is, that throwing money at it won’t work. You have to knock down the barriers and create a conducive environment to allow the sector to grow.

DG - In the Indonesian leased line case, they didn’t even know what other people in other countries were paying for this service.
RS – How is that different to each other? Private sector is relatively underdeveloped, in the Indonesian case, so it is a case of lack of expertise (capacity gap).