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Regional Strategies > Book Reviews > IT Parks of the Asia-Pacific: Lessons for the Regional Digital Divide >

Information Technology Parks of the Asia-Pacific: Lessons for the Regional Digital Divide

Edited by Meheroo Jussawalla and Richard Taylor
2003 M.E. Sharpe Publications, New York
298 pages

Review by Madanmohan Rao

A number of developing nations, especially in the Asia-Pacific, have established industrial parks for information technology (IT) as a plank for promoting foreign investment, technology transfer, R&D, employment, local innovation and overall economic growth. Due to the high investments, long gestation periods and risks involved, the role and performance of IT parks seems worthy of a serious study for policymakers and planners.

Six chapters in this study compare the IT parks of China, India, Malaysia, Singapore, Taiwan and Hawaii. The case studies profile local economic histories, policy initiatives, investment patterns, outcomes and social impacts of each cluster of IT parks, but the chapters could have been structured more systematically and consistently. Three synthesis chapters provide an overall framework for the study and draw lessons from the case studies, but these chapters too could have been more incisive and inter-related.

The UN’s World Summits on the Information Society (2003 and 2005) provide a backdrop to the study, which was funded by the Ford Foundation, and conducted by the East-West Centre and Pennsylvania State University. Meheroo Jussawalla is an economist at the East-West Centre and faculty member at the University of Hawaii; Richard Taylor is chair of telecommunications studies at Pennsylvania State University. The contributing writers are generally academics or professionals from the respective Asian countries.

IT presents opportunities and challenges to developing nations, begins Jussawalla: they can leapfrog directly to state-of-the-art technologies, but they also need to overcome the digital divide and knowledge gaps. A number of high-level studies on global IT impacts have been conducted, ranging from the World Bank and UNDP to the WTO and the G7. She surveys comparative studies on IT capacity which feature metrics and indices, such as the UNDP’s Technology Achievement Index (TAI), with components including patents filed by each country, diffusion of recent and old innovations, and human skills.

This study joins a number of others on regional economics of the IT industry, but some of the notable studies in this field are surprisingly missing from the literature review in the book: such as Annalee Saxenian’s seminal works “Regional Advantage: Culture and Competition in Silicon Valley and Route 128,” Silicon Valley's New Immigrant Entrepreneurs” and “Local and Global Networks of Immigrant Professionals in Silicon Valley” – or even David Rosenberg’s “Cloning Silicon Valley: The Next Generation High-Tech Hotspots.”

In the case of Singapore, economic and geopolitical imperatives have led the country to proactively embrace globalisation and build the nation-state as a regional hub and “congenial host” for IT, R&D and business operations. The National Science Council established the Singapore Science Park in 1984, which has emerged as an R&D hub for many multinationals. Tenant companies receive tax incentives and access to excellent infrastructure. An Industrial Park was opened in 2000, to jumpstart local entrepreneurs. Active government agencies on this front include the Agency for Science, Technology and Research (or A*STAR).

Singapore has been involved in IT park initiatives in other countries like China, Vietnam, Philippines, and India. Twinning agreements have been signed with tech parks in other parts of the world like Europe. This case study is weak, however, in terms of analysis of impacts of Singapore’s IT parks, key lessons and recommendations.

India has a number of IT parks spawned by the agency Software Technology Parks of India, some in collaboration with local industry groups like the Tatas or with the government of Singapore. STPs have helped bootstrap and fuel the growth of the Indian IT industry into a global force. Government policy (eg. import duties, licenses) towards IT became more friendly in the 1990s as compared to the 1980s.

IT hubs like Bangalore have thrived, and have been helped by local academic institutes for management, science and IT. STPI has promoted IT parks not just in India but other developing countries like Algeria, Indonesia, Nepal, Mauritius and Sri Lanka. The chapter does not adequately address, however, some of the basic infrastructural challenges facing most Indian cities (eg. transportation and electricity supply), especially cities which themselves have IT parks. The impact analysis in this chapter is mostly in terms of software exports, and less on the domestic market or local digital divide.

Malaysia’s IT park drive has hinged on the MultiMedia Super Corridor (referred to as MSC or MMSC), the flagship of the Malaysia Vision 2020 blueprint for the information age which was unveiled in 1991. Successive five-year plans of Malaysia have moved the emphasis from commodities and rural economies to urban development and industry as well as IT. Vision 2020 added an emphasis on “moral society” and spiritual values in addition to information age imperatives.

The MMSC initiative includes a smart city for government services and another for industry players. One of the aims of the plan was to nurture local IT initiatives (as in the case of South Korea) and avoid phenomena like Singapore’s excessive dependence on MNCs. The advisory board features global luminaries of the IT world, but the IT park has faced skilled labour shortages. The overall strict media climate has also led some IT players to tread cautiously on the MMSC front. And while Malaysia may have performed well on the hardware front, software has been more of a challenge. Despite some of these setbacks and the impacts of global economic shocks, the MMSC has in general helped set the direction and tone of the country’s IT future.

Taiwan’s HsinChu-based science and industrial park hosts the world’s third largest high-tech industry concentration. In fact, Taiwan is sometimes referred to as the “Republic of Computers.” HsinChu is regarded as the hinterland of California’s Silicon Valley, and the new Tainan Park is intended to be modelled on the lines of Silicon Valley as well. Though there is strong government support, private sector now plays a dominant role in the IT park. The case study provides abundant data on industry performance of the IT parks in terms of product lines, R&D expenditures, foreign investment, and revenues. Social impacts like stress and urban problems like congestion are given much less attention in the material.

With the world’s second largest market for technology equipment and services, China has two major high-tech development centres near Beijing and Shanghai, established in the 1990s. Initiatives launched by the Chinese government include the Torch Program (to jumpstart the high-tech industry), Spark Program, 863 Program (launched in March 1986!).

The fifty-plus IT parks in China are regarded as windows to the outside world and sources to promote urban development. An incubator role is played by university-led national projects. An active role is also played by companies from the US, Hong Kong and Taiwan (despite frosty diplomatic relations). This case study features copious data on the IT parks, including core focus areas, revenue and profits, number of tenant companies and employees, share of ownerships, quality of labour force, and scale of investments.

For instance, in terms of impacts, an estimated 20 per cent of GDP for Beijing comes from its IT parks. Income levels have increased, greater social mobility has been created, and employment is tied more to performance than guarantees. Qualitative analysis also addresses social issues like interaction between different management cultures, the apparently lower value placed on human resource development by Chinese managers, the race to innovate rather than imitate, and the pressures and necessity of consistent quality. Challenges arise in moving on from basic assembly line work to cutting-edge research, lowering the risk levels for investors, and avoiding excessive duplication and competition between IT parks.

Hawaii has a couple of IT parks as well, but has not become a high-tech centre between the Americas and the Asia-Pacific region. Half of this case study is a rather long table, and there is very little qualitative discussion.

Two concluding chapters draw overall lessons from the IT park experience. IT parks serve important roles as bridge builders and classrooms, but partnerships are crucial in combining vision and action, aligning global and local imperatives. IT parks hold an important place in the “kit of institutional tools to bridge the digital divide.”

IT parks can create better standards of living in their immediate neighbourhoods, but challenges can arise in spreading the benefits to the rest of society. To be fair, however, other levers may be more important in bridging the digital divide, such as progressive policy initiatives from the governments in developing countries who often create “their own barriers to telecoms development.”

In sum, this is a useful and informative treatment of the role of IT parks in Asia, but the material seems to focus more on IT industry issues than on measures and dynamics of the digital divide in Asian countries. The lessons should be useful for IT park developers in other countries and regions as well, and this is where some additional material on IT parks in Africa or Latin America would have been most welcome in terms of comparing the progress of Asian IT parks with those in other parts of the world.

The quality of the material and analysis differs widely across the case study chapters, though the editors have done a good job of working around these limitations and the different writing styles of the contributors. This definitely belongs on the bookshelves of IT policymakers and researchers of regional economics, especially in Asia.

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Madanmohan Rao is research director at the Asian Media Information and Communication centre (AMIC) and editor of two book series, “The Asia-Pacific Internet Handbook” and “The Knowledge Management Chronicles”

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