Embed Size (px)
Citation preview
Excellent IT City Models
Yasuharu TanakaJapan Desk
Saudi Arabian General Investment Authority (SAGIA)
March 17,2002
Agenda
1. Most excellent model – Austin in USA
2. IT Parks in Asia (Singapore, HK, Taiwan, Malaysia, India and China)
3. First “Science Park” in Japan
4. Common success factors & Presence or absence of each factor in Riyadh
5. Conclusion…
Evaluation to Austin
Magazine(y/m) Ranking Category
Forbes (00/5) 1 Best City for Business Dun & Bradstreet/Business 1 The Top City for High- Startups Magazine (99/10) Tech Startup Money Magazine (99/10) 2 Best Place to Live Yahoo (99/2) 2 Most Wired City Inc. Magazine(99/12) 2 Best Small Metro for Startup Growing a Business Fortune (99/12) 3 Best City For Business Entrepreneur Magazine 5 Top City for Entrepreneur Activities
Outline of Austin
1. 20 years ago, Austin was an university town – only State Government and UT
2. Today, Austin is called as “Silicon Hills !
(Others) Silicon Forest (Portland, Seattle) Silicon Mountain (Colorado) Silicon Alley (NY), Silicon Dominion (Washington D.C.) etc.
Why? … IT Clustering
High-tech industries in Austin
Category No. of companies No. of employee
Computer 680 40,000 (32%) Mfg 95 34,000 (27%) Sales/Services 585 6,000 (5%)
Semiconductor 50 21,500 (17%) Other electronics 140 19,500 (16%) Software/Internet 750 27,500 (22%) Telecommunication 300 12,000 (10%) Mfg 60 3,500 (3%) Sales/Service 240 8,500
(7%)
Bio & Medical 80 4,500 (4%) TOTAL 2,000 125,000
(100%)
High-tech industries in Austin
1. No. of High-tech companies Approx. 2000
2. No. of employees in High-tech industry
125,000 20% of total employees in Austin
3. Prominent companies(No. of employees):
Dell Computer (23,000) --- Mr.Michel Dell (UT) Motorola (10,500) Applied Materials (3,200) Samsung (1,000) etc.
No. of Patent Pending in USA
City Population No. of Patent Pending B/A in 1998 A in 1998 B San Jose 1,639 3,571 2.2 Austin 1,100 1,740 1.6 Denver 2,369 1,369 0.6 Seattle 2,312 1,076 0.5 Portland 1,822 897 0.5 Salt Lake 1,272 503 0.4
It is noteworthy that Austin with relatively smaller population ranks No. 2 followed by San Jose in Silicon Valley.
History of Regional Development (1/3)
The 1970s Town of S.Gov. and Univ.
“IC2 Institute” in 1976 by Dr.Kozmetsky (BS-UT) Objective : “Think and Do” tank Combination of Technology and
Entrepreneurship Driving force for regional development
What is IC2 Institute at present ?
a globally interactive organization that uses modern telecommunication and multimedia to link research universities,businesses, other institutional and
individual resources in developed regions.
History of Regional Development (2/3)
The 1980s Expansion stage by inviting institutes
> Stimulated by Japan’s public-private consortium in Computer Ind. > US Comp. Ind. plans to establish MMC > Success to invite MMC by UT and GACC in 1982 ( Free building etc.) > Success to invite SEMATECH in 1988 > High reputation as Technology Center Driving force to invite
other high-tech companies
Industrial diversification : Oil High-tech “ Advantage Austin Project “ by GACC 1989~
1. Image-up campaign by a prominent PR company in NY
2. Target at IT companies in Silicon Valley (comparative marketing) Success to invite AMD (Advanced Micro Devices), Applied Materials, Cypress Semiconductor etc.
History of Regional Development (3/3)
The 1990s Vital venture businesses
Many engineers were laid off under recession in the late 1980s.
Need to keep them living in Austin Business Incubator
ATI (Austin Technology Incubator) by UT,GACC,City, Lawyers etc. in 1990 --- Under leadership of Dr.Kozmetsky (UT)
TCN (The Capital Network) to link VB and VC in 1991
ASC (Austin S/W Council) in 1999 for networking
In 1999 Over 200 venture businesses start-up
Many IPOs and success stories
What made Austin developed?
1. Success to invite prominent institutes, MCC and SEMATECH Clustering
2. Presence of MCC and SEMATECH Higher reputation of Austin as Techno-region Many IT companies moved from Silicon Valley
3. Many engineers and/or researchers became techno-seeds of venture businesses, and established many venture business in the 1990s.
4. Very strong leadership of Univ. of Texas
Other factors for success
1. Low living cost - No income tax of the state and city - Low housing cost (60% of Silicon Valley) - Low electricity cost and gas etc.
2. High educational level
% of students going on higher education in Austin 34% (Ref) San Nose 25%, NY 23%, Boston 30%, Portland 26%
3. Moderate climate and good nature
4. Low population density and short commuting time - Austin 2,260/mile2, San Nose 4,678, NY 23,621,
- Austin 19.1 minutes for one way, San Nose 25.5 m.
Most importantly (1/3)…
1. What did Austin do first ?
> They (IC2) made comprehensive case studies on Silicon Valley and Japan’s technology management.
> They made extremely attractive offer to invite high-tech institutes for IT clustering.
Most importantly (2/3)…
2. How did Austin succeed to have IT clusters relocate from Silicon Valley ?
> They created the best circumstance to attract high-tech human resources.
> Then, they established high reputation as a high-tech region.
> They targeted at Silicon Valley clusters.
Most importantly (3/3)…
What is “Creating a Techno-region” ?
It is, how ARTIFICIALLY you create “High-Tech Clustering” regionally.
Excellent IT Parks in Asia (1/2)Singapore “Science Park” > IT related R&D Strategy since the 1990s > Over 200 multinational IT institutes > Vital promotion for techno-entrepreneurship
Hong Kong “Cyber Port” > Joint project with PCCW and HK Special Adm. Gov.
> Multi-media oriented
> Planning to invite the world’s cut-edging IT companies
Taiwan “Green Silicon Island” > The world’s 4th largest producer of semiconductors > Over 270 IT-related companies > Entrepreneurship
Excellent IT Parks in Asia (2/2)
Malaysia “Multimedia Super Corridor” > National big project in line with “Vision 2020” > Multi-media clustering by inviting international IT companies > Excellent planning as an integrated package
India “Bangalore” > the World 2nd largest supplier of soft-wares > Historical background in industry-university collaboration > Abundant human resources in IT field
China “Zhongguancun Science Park” > National project to innovate to “China’s Silicon Valley” > Abundant science & technology human resources
> Strategic plan to invite multinational IT companies
Singapore “Science Park” (1/2)
Strategy > R&D oriented since early the 1990s as a national strategy
> National Science and Technology Bureau (NSTB) in 1991 for R&D > US$ 6 billion invested for R&D promotion since 1991 R&D Infrastructure : 13 institutes established Technopreneur program : US$ 1 bil. Fund to support in 1999 Subsidies : US$1.36 bil. To R&D project in private sector HR : HR development program to Singaporean Recruitment of scientists from overseas
Economic effects 1990 1999 R&D investment (P&P) US$ 570 mil US$ 2,800 mil R&D persons 4,300 13,600 High-tech product ratio NA 65.3%
Singapore “Science Park” (2/2)
How did Singapore succeed in raising awareness of entrepreneurship ? > NSTB (1991) Over 500 techno-venture businesses in 1999
( only 88 in 1996)
> Kent Ridge Digital Laboratory (KRDL) in 1998
Objective : Cut-edging IT technology and its VB R&D staff : 319 (250 are from 25 foreign countries) Spun-off VB : 18 VBs since 1998 Media Ring. (IPO)
What can we learn from Singapore’s R&D strategy ?
> Setting-up & Implementation of Clear R&D Strategy
two times of 5-year Plan in 1991 and 1996 > Practical use of HR from overseas
Hong Kong “Cyber Port”
Joint Project led by Public/Private Sectors(PCCW)
Started 2000 Summer - Completion 2007
Total investment cost US$ 2,000 million
Bldg. Cyber Port: Intelligent Office(93,000 ㎡） etc. Housing: skyrocketing flat bldg. (375,000 ㎡
Tenant: Plan mid to large IT companies - 30 small business - 100
Target: International and/or cut-edging IT companies (e-Learning, e-Trading, soft-wares, multimedia)
Anchor tenant: IBM, Microsoft,Oracle, HP, Cisco, etc.
Taiwan : Green Silicon Island
“ Hsinchu Science-based Industrial Park”
Mfg. 15 % of Compaq’s desktop computer 40 % of IBM’s 60 % of Dell Computer’s
Mfg. In products wise 91 % of scanner 68 % of key boards 66 % of LAN cards 58 % of monitor etc.
Taiwan : Techno-development
High-tech oriented strategy initiated by Government Started in the 1980s
1986 1995 R & D Investment US$ 800 Mil. US$ 4,600 Mil. - Ratio to GDP 1.0 % 1.8%
Ratio of High-tech inIndustrial Production 24 % 37.5 %
No. of Researcher >B.S. 22,000 45,000
R&D Academic Report 26th 11th
Ranking in the world
Outline of “Hsinchu Science Industrial Park”
Foundation : 1980
Location : Hsinchu City - 70km from Taipei
Area : 580 ha
No. of companies : Approx. 300
No. of employees : 72,000
Total sales : US$ 13,700 Mil
Cumulative amount : US$ 15,300 Mil
For investment by the companies
Taiwan : Strategic IT Planning
Infra : Hsinchu Science Industrial Park started in 1980 Promotion for R&D : - Science & Technology Institute (1973)
HR Development : - University-Industry Collaboration - Entrepreneur supporting programs - Relocation of Taiwanese brains from overseas
Incentive to High-tech companies : - Free Income Tax for 5 years - Low cost infrastructures (office etc.) - Private VCs with incentives in taxation
Malaysia “Multimedia Super Corridor”(1/3)
Phase I (1996 ~ 2003 )
> To attract a core group of world-class companies (50 companies)
> To launch seven Flagship Application > To put in place a world-leading framework of cyberlaws > To establish CYBERJAYA and PUTRAJAYA
Malaysia “Multimedia Super Corridor”(2/3)
Phase II (2004 ~ 2010)
> To link MSC to other cybercities in the world > To establish a second cluster of world-class companies (250 companies)
> To set global standards in flagship applications
> To champion cyberlaws with global society
Malaysia “Multimedia Super Corridor”(3/3)
Phase III (2011 ~ 2020)
> Malaysia will be transformed into a knowledge- based society – being a global test bed for new multimedia and IT applications
> To establish a third cluster of world-class companies (500 companies)
> To achieve a luster of intelligent cities (12 cities) linked to the global information super highway
> To become the platform for the international Cybercourt of Justice
Malaysia : Outline of MSC
Length of “corridor” – 15 km wide & 50 km long from KLCC to KLIA Total area - 750 k ㎡ * Ref. Singapore 650 k ㎡
Perfect Global Multimedia Climate
Fibre-optic backbone with 2.5-10 gigabits per second capacity to support virtual boardrooms, remote CAD/CAM operation, live multimedia internet broadcasting etc.
Linking the new MSC cities of Putrajaya and Cyberjaya with KL and KLIA
World’s First Smart Cities in MSC
“Cyberjaya”
> Intelligent city with multimedia industries
> Area 2,820 ha (Phase I – 1,460 ha, Phase II – 1,360 ha)
> Planned population 240,000
> R&D centers, Multimedia Univ. HQT of MDC etc,
“Putrajaya”
> New seat of gov. and administrative capital
> e-Government
> planned population 250,000
> By 2005, all ministries will move
“Multimedia Development” Flagship Applications
1. Multi-Purpose Card
2. Smart Schools
3. Electronic Government
4. Telemedicine
5. R&D Cluster
6. Worldwide Manufacturing Webs
7. Borderless Marketing
India “Bangalore”
Historical background:
Accumulation of defense industries and academic institutes - National Aerospace Laboratories, Indian Space Research etc. - Indian Institute of Science (IISc) 1909 by TATA - other science & technology universities (26)
Historical process for IT clustering:
- TI for R&D of software(SW) in 1986 - Then, Motorola, IBM, Intel, HP, Siemens through the 1990s - Infosys Technologies in 1981 NASDAQ 1993 - International Technology Park in 1994 w/ Singapore - National Task Force on IT and SW Development - At present, SW R&D related persons over 130,000
India – S/W Clustering Policy
Software Technology Parks of India (STPI) > 7 parks over India
> Telecommunication infra to foreign IT companies > Incubators to local VBs > Incentives
International Technology Park > Intelligent buildings for foreign IT R&D
> 20 minutes by car from Bangalore City > High-level living infra for foreign residents > Developer : ITPL (JV with TATA, State of Karnataka, S’pore)
India - IT Ind. Development Target
“IT Super Power” National Policy to 2008
Currency : USD 1999 2008 200/1999
HW Production 6,100 mil 10,000 mil 1.6 times
SW Production 5,300 mil 87,000 mil 16
SW Export 3,700 mil 50,000 mil 14
China “Zhongguancun Science Park”
Abundant scientists&engineers - Tsinghua Univ. (40,000 students) - Peking Univ. (30,000 students) - 66 other universities - 230 Governmental R&D institutes - No. of scientists > 300,000 ( Japan Approx. 200,000 )
No. of IT related companies > 4,500
China: Historical Background
Historically academic center
Electronics/electrical parts shopping center since the 1980s
Designated by Gov. as “High-tech Region” in 1988
Since 1999, IT infrastructure in progress
Gov. goal 50 R&D institutes of multinational firms by 2005 Total sales of high-tech US$78 billion by 2010
First “Science Park” in Japan
Name - Kanagawa Science Park (KSP)
Foundation - 1989 Total Investment Amount – Approx. US$ 650 mil
Initiators - Kanagawa Pref.& Kawasaki City
Cooperators - Government & Private Sec.
No. of companies - 122 (as of Jan.2001)
No. of Scientists & Engineers - Approx. 4,000
Area - 5.6 ha (Intelligent Buildings) Total floor area 14.5 ha
Japan : Outline of KSP
Kanagawa Academy of Science Technology (KAST)
Supply of R&D Needs R&D Reports Techno-seeds & Inf.
Kanagawa Science Park Company Limited
SME technology Supply of Corporate Needs Laboratory service
Kanagawa High Technology Foundation (KTF)
Coordinator of KSP
Kanagawa Science Park Company Ltd.
Capital : US$ 45 mil Municipality US$ 10 mil Development Bank US$ 5 mil Private companies US$ 30 mil
Function : Coordination of KSP Business incubator for start-up business Linking VB with VC etc.
Occupancy : Tenant Bldg and Incubation Bldg Both full
Job creation by KSP : 4,000 as a whole of KSP
Fostering of venture business : 146 graduated (max. 7 y)
Japan-US Comparison on Venture Businesses
Generally speaking…
In USA… Approx. 800,000 start-up annually. Approx. 700,000 discontinue annually.
As 100,000 companies survives, jobs opportunities have been increasing.
In Japan… Approx. 140,000 start-up annually. Approx. 170,000 discontinue annually.
As 30,000 companies decrease annually, job opportunities have been decreasing.
Common Success Factors 1/3 (Riyadh?)
Strong leadership & Competitive Strategy
Yes. But, strong financial supports are essential. In addition, strategic planning for Cyber Riyadh City in cooperation with Riyadh State, authorities concerned, academic institutes etc. are essential. Excellent IT infrastructure
Unknown. Intensive IT infrastructure is required urgently to attract multinational IT companies. More importantly, attractive information service at low cost is must.
Common Success Factors 2/3 (Riyadh?)
Incentives to IT clusters
Not yet. Special incentives, among all, to multi- national IT institutes are must to invite. For example, free intelligent office, free corporate tax, free duty on IT hardware, excellent living compound,government/municipality sponsored R&D, IT Human Resources for R&D
Unclear. IT university or R&D institutes might be necessary to foster Saudi IT clusters for economic development. Strategic alliances with overseas institute/universities with incentives are essential.
Common Success Factors 3/3 (Riyadh?)
Venture Business Promotion In progress, but not enough.
Not only VC but also intensive services such as marketing supports, financial consultation, management advises/consultation, networking with institutional investors/angels in KSA and overseas
etc. are essential.
University - Industry Collaboration Unclear in Riyadh.
Conclusion…
Excellent IT City in Riyadh can be created artificially through IT clustering.
Excellent IT City in Riyadh should be ORIGINAL, not be the same models of others.
Nothing ventured, nothing gained !!!
Thank you very much.
Yasuharu TanakaJapan Desk
Saudi Arabian General Investment Authority
