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Asia's Digital Challenge

For much of the late twentieth century, the twenty-first was anticipated as the coming ‘Asian Century’. Japan’s economic woes and the broader financial crisis of 1997–98 put a dent in those expectations. The information revolution adds another complication; because of it, Asian economic development in this new century is likely to resemble a disorganised game of leapfrog. The information revolution makes ‘leapfrogging’ possible because it alters the conventional categories of ‘developed’, ‘developing’, and ‘underdeveloped’ nations. Rapid technological change can push yesterday’s losers forward, and burden some more ‘advanced’ economies with the weight of yesterday’s technological infrastructure. Bill Gates, the CEO of Microsoft, has noted that the lack of telephone infrastructure can actually be an advantage for developing countries, as they can use directly mobile radio stations.1 For instance, Lebanon, Cambodia, and Rwanda now rank alongside Italy and Finland among the countries where mobile phones outnumber fixed lines. IT enthusiasts, such as former US President Bill Clinton, note that India, for example, has 25% of the world’s malnourished but also 30% of its software engineers. Thus India should be in a good position to demonstrate how new technologies can be used to improve health care and education across the vast nation’s villages.2 Given the basic elements – well-developed communications infrastructure; a large pool of skilled workers; an environment that encourages new business formation; workers fluent in English, which is the language of roughly 80% of all web pages – leapfrogging and the replication of California’s Silicon Valley success in other parts of the world becomes possible.3 One such example is Bangalore, India, which has become an established source of software and engineers globally, especially North America. Indians make up about 38% of the Silicon Valley workforce.4 Furthermore, in 1999 approximately 50% of US visas given to software professionals were given to Indians, a total of 55,047 compared to 6,665 to Chinese and 5,779 to Japanese.5 According to India’s National Association of Software and Service Companies, India’s software exports totalled some $6.24 billion in fiscal year (FY) 2000, making it a software export powerhouse in Asia.6 Of the Fortune 500 companies, 203 outsource their software needs to Indian companies.