1. 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

2. IT Usage In East Asia ➢ Infrastructure Broadband: ADSL, Cable modem FTTH ➢ Platform PC, Mobile ➢ Application e-commerce, EDI, SCM Osaka School of International Public Policy

3. Growth of Japanese Broadband Osaka School of International Public Policy

4. Number of Internet Users and Coverage Osaka School of International Public Policy

5. Mobile Internet Access Rates Osaka School of International Public Policy

6. Ratio of Firms introduced PCs Osaka School of International Public Policy

7. Comparison of e-Commerce: B2B Osaka School of International Public Policy Korea Singapore

8. Comparison of e-Commerce: B2C Osaka School of International Public Policy

9. 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 Fabric 2.20 4.18 Osaka School of International Public Policy

10. 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 Osaka School of International Public Policy

11. Share of SMEs JapanKoreaChina Singapore ThailandVietnam 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 83.765.5 51 70.0 85

12. 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 Osaka School of International Public Policy

13. 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 ? Osaka School of International Public Policy

14. 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 Osaka School of International Public Policy

15. Analysis of Japan Team II Identify factors promoting IT usage by SME Y i = β 0 + β 1 X 1i + β 2 X 2i + … …+β n X ni + e i Y i : index of IT usage, X i : variables as characteristics of SMEs, amount of IT investment, human resources, managerial behavior, expectations for IT usage, etc., β i : coefficients to be estimated, e i : residual. Osaka School of International Public Policy

16. 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 Osaka School of International Public Policy

17. 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 Osaka School of International Public Policy

18. Toward Networking by SMEs Osaka School of International Public Policy SMEs Large firms MNCs Hierarchical structure Non-hierarchical structure

19. 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 Osaka School of International Public Policy

20. 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. Osaka School of International Public Policy

21. 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 Osaka School of International Public Policy

22. 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 a ll regional resources so as to nurture new networks of SMEs Osaka School of International Public Policy