IT for Development of Small- and Medium-sized Exporters in East

Asia and Latin America

Regional Summary: Asia

Masatsugu Tsuji

OSIPP (Osaka School of International Public Policy)

Osaka University, Japan

Osaka School of International Public Policy

ECLAC, Chile November 2004

IT Usage In East Asia

➢ Infrastructure Broadband: ADSL, Cable modem FTTH

➢ Platform

PC, Mobile

➢ Application

e-commerce, EDI, SCM

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0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

Mar

. 01

June

01

Sept

. 01

Dec

. 01

Mar

. 02

June

02

Sept

. 02

Dec

. 02

Mar

. 03

June

03

Sept

. 03

Dem

. 03

Mar

. 04

June

. 04

DSLCATVFTTH

Growth of Japanese Broadband

Osaka School of International Public Policy

0

10

20

30

40

50

60

70

J apan Korea Chi na Si ngaporeThai l and Vi etnam

Numb

er o

f us

ers

(mil

lion

)

0

10

20

30

40

50

60

Cove

age

Number of InternetUsers (Millions)Internet Coverage

Number of Internet Users and Coverage

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Mobile Internet Access Rates

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Ratio of Firms introduced PCs

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0

5

10

15

20

25

2000 2001 2002 2003 2004 2005

EC r

atio

: B2B

J apanU.S.A.

Comparison of e-Commerce: B2B

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Korea

Singapore

Comparison of e- Commerce with the U.S.

0.69%

1.37%

2.16%

3.16%

4.25%

5.51%

6.99%

0.10% 0.25%0.56%

1.10%

1.90%

3.14%

4.50%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

1999 2000 2001 2002 2003 2004 2005

EC R

atio

U.S.J apan

Comparison of e-Commerce: B2C

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Market size of e-Commerce (B2B)

Industry 2001 2002

Chemical 0.80% 1.65%

General machines 1.80 5.58

Electronics 24.20 32.12

Automobile 30.50 39.46

Transportations and travel 2.10 2.20

Information and Software　 4.00 9.90

Food 1.30 0.40

Utilities 0.00 0.00

Fabric 2.20 4.18

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Market Size of e-Commerce (B2C)

2001 2002

PC and related products 12.2% 15.4%

Entertainment 0.92 1.63

Food 0.14 0.29

Automobile 2.80 4.78

Real estate 0.74 1.45

Finance 0.63 1.17

Cloths 0.34 0.79

Travel 0.86 1.87

Service 0.09 0.21

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Share of SMEs

Japan Korea China Singapore Thailand Vietnam

No. of SMEs

99.7 99.4 95.2 92 99.6

GDP 49.1 55 34 38.9 65

Export 20.2 42 61.2 38.2

Employ-ment 66.9 83.7 65.5 51 70.0 85

Purposes of IT Usage

➢ Providing and sharing information

e-mail, homepages, web pages

➢ Efficiency of internal works Groupware such as accounting, payroll, and inventory management

➢ Collaboration other firms through networking

B2B, B2C, EDI, SCM, ERP, CRM

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Obstacles of IT usage by East Asian SMEs

➢ Human resources General knowledge, IT specialists, and Managerial leadership

➢ Funds for IT investment

➢ Business environments of SMEs Traditional business practice, regulations, and relation with large firms or MNCs

➢ Consumers’ attitudes Offline or online shopping ?

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Analysis of Japan Team I

➢ Quantitative research by mail survey June 2004

Higashi-Osaka City Ohta Word, Metropolitan Tokyo

Two major SME clusters in Japan 6,000 SMEs, and 1,198 responses

➢ In-depth interviews

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Analysis of Japan Team II

Identify factors promoting IT usage by SME

Yi = β0 + β1X1i + β2X2i + … …+βnXni + ei

Yi : index of IT usage,

Xi : variables as characteristics of SMEs, amount of IT investment, human resources, managerial behavior, expectations for IT usage, etc.,

βi : coefficients to be estimated,

ei : residual.

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Results of Analysis of Japan Team

Extracted factors promoting IT usage by SMEs

(1) Managerial behavior of top management

Self-renovating type

Positive attitude toward transforming their

businesses by IT usage

(2) Size of SMEs

Number of employees

Amount of Capital

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Issues of SMEs’ Networking through IT

Industrial structure of East Asian economies

Hierarchal structure based on long-run contract

relationship, not on market mechanism.

Principals: large firms and MNCs

Subcontractors : SMEs

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Toward Networking by SMEs

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SMEs

Large firmsMNCs

Hierarchical structure Non-hierarchical structure

Examples of New Networks I

“Kentiku Itiba (Construction Market)”

SCM formed by local construction firms

CAD/CAM

selection of design by PC

Automated estimation system

Web camera

Reducing costs and speed up construction

Now covering Western part of Japan

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Examples of New Networks II

• “Sisaku Net (Prototype Network) ” Kyoto based high-tech group specialized in precision

machine industry. Respond quickly by the Internet.

• “Shoudan Jouzu (Better Marching)” Matching site located in Osaka, and 3,500 SMEs participate. Local SMEs can receive orders all over the world.

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Systems Supporting New Network

• Governments’ assistance programs

• NPOs

“IT Coordinator Association”

Groups of retired engineers and craftsmen

• Collaborations of industry, government and academia

TLO of university

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New Policy Implementations for Support East Asian SMEs

in the Age of Information

• East Asian success model:

Strong government leadership

• Public Private Partnership

Collaboration of all regional resources so as

to nurture new networks of SMEs

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