BG Lee Hsien Loong, Deputy Prime Minister - Speech CommunicAsia 2001/Broadcast Asia Opening, Singapore Expo
BG Lee Hsien Loong, Deputy Prime Minister - Speech
CommunicAsia 2001/Broadcast Asia Opening, Singapore Expo
Singapore, 19 June 2001
Distinguished guests,
Ladies and gentlemen
1 I am happy to join you this morning for CommunicAsia 2001 and Broadcast Asia. It is our pleasure to host these events in Singapore again this year.
2 This year's show is even larger than last year's, and remains the largest IT and communications show in Asia. But both CommunicAsia 2001 and Broadcast Asia are taking place against a difficult backdrop. The US economy is going through a long-postponed cyclical downturn. The situation is particularly bad for the high tech and telecom sectors, which are undergoing a major correction. Falling economic growth rates have brought home the realisation that many of the earlier projections of revenues were unrealistic. The April book-to-bill ratio for North America-based semiconductor-equipment makers was 0.4, the lowest the industry has posted in a decade. Many telecom and network equipment companies are also reeling from the burden of over-ambitious expansions. Even Nortel Networks recently announced an expected US$19 billion loss for the second quarter this year, with a massive US$12 billion write-down in goodwill on its recent acquisitions. There will be no V-shape recovery for the info-comm industry, though everyone hopes things will pick up in the industry by next year.
3 For the Asian economies too, this will be a difficult year. The Asian economies have been affected by the weak performance of the US economy as well as Europe. We are not helped by Japan where the economy unexpectedly shrank 0.2 per cent in the first quarter of 2001.
4 In many countries, the restructuring of individual economies, to remedy the weaknesses uncovered by the Asian financial crisis, is taking longer than expected. In some countries economic adjustments that are difficult enough at the best of times depend on a resolution of more fundamental political uncertainties. Indonesia is an example. Foreign direct investments into such countries have slowed down, as MNCs wait for the situation to clear, and focus their attention on more promising prospects elsewhere.
5 For Asia, the global decline in the electronics and telecommuni-cations industries comes on top of these broader problems. Electronics and telecom-munications are very important to many Asian countries, because their electronics exports, especially to the US, make up a large proportion of their total exports. Electronics related products, for example, make up more than half of Singapore's total exports. Many workers work in the electronics industry, and are feeling the pinch of the electronics downturn.
6 Notwithstanding these present problems globally and in Asia, from a longer term point of view, prospects for the info-comm industry are promising. The techno-logy is driving long-term, fundamental changes in commerce, industry and our daily lives. This is transforming the way business is done in every sector of the economy, altering lifestyles, and changing the way people work, communicate and entertain themselves. The changes have had profound impact. The dot-com frenzy has subsided, but these long term changes will continue for many years to come.
7 Businesses are tapping the Internet as a strategic asset, incorporating info-comm technology into their marketing, financial and corporate communication processes. Manufacturing companies are exploiting IT to dramatically increase efficiency and competitiveness through improved processes such as just-in-time production with zero inventory.
8 In more and more homes, PCs and the Internet have become an integral part of our lives, a trend which will only strengthen as broadband access becomes more affordable and widespread. Internet users today can not only access the wealth of information available on the Net, but can transfer funds, listen to the latest hit songs, buy books, airline tickets and even custom-made cars, and participate in auctions on the Net by simply pointing and clicking the mouse.
9 Even governments are striving to be net-savvy. Many governments, including Singapore's, are overhauling their processes to bring them up to date in the internet age, just like commercial companies. Governments are starting to use the internet to offer public services, transact business, and conduct e-commerce. They are using intranets to communicate and share information internally, and strive to be as efficient as any commercial firm.
10 They are also grappling with political implications of the Internet, which opens up societies and helps individuals link up with like minded souls anywhere in cyberspace, but may weaken the bonds of place and circumstance that have always tied citizens to their home and nation. They have had to find new ways to grab the attention of citizens who are constantly bombarded with multiple sources of information, entertainment and distraction, in order to build consensus on national issues and strengthen national identities. They also have to deal with the social and political repercussions of a "digital divide", where those who are IT savvy are poised to reap the benefits and rewards of the growth of the IT and telecomm sectors, while those who are not, risk being left behind.
11 The changes brought about by technology are far from over. Technology will continue to reshape the world, no doubt throwing up new challenges, but also opening up new avenues and opportunities for growth. The opportunities are especially promising in Asia because the economies are rapidly modernising, and eager to exploit technology to the full, so as to develop and progress. Asian societies are increasingly urbanised, so that it is relatively easy to put in place the physical infrastructure to exploit IT and the Internet. Their populations are also young, educated and numerate, and ready to fully embrace the digital age. Asian countries, therefore, have been early and serious adopters of information and communications technology.
12 Singapore's level of awareness, acceptance and adoption of IT among the general public, for example, is among the highest in the world. Our PC and Internet access penetration rates are on par with technology leaders like the US and Sweden. In telecommunications, we have a comprehensive, up-to-date network, providing high quality services to MNCs, financial institutions, and Singa-poreans. Other economies like Malaysia and Thailand, Taiwan, and major cities in China like Shanghai are similarly marching resolutely in this direction.
13 Asia is therefore experiencing a strong wave of growth in the technology and telecomm sectors. Indeed, Gartner Inc., in a recent study, predicted that the Asia-Pacific region, excluding Japan, will nearly double its IT market by 2004. Long term prospects for the technology and telecomm sectors are bright.
14 In Singapore, we are positioning ourselves to ride the wave and tap these opportunities. It will no longer be just a matter of proliferating PCs and wiring up everyone in Singapore. It is about introducing more innovative services and offering more attractive value propositions, to make Singapore a vibrant, competitive hub and an attractive destination for investments in leading-edge technology development.
15 Last year, we completely liberalised the telecomm industry to competition. IDA is also pushing for the development of more e-Government services and promoting new businesses like digital media and smart services in homes and communities. They are supporting new technologies like voice-related applications, location-based services and XML, and encouraging the development of new infrastructure like 3G mobile wireless and interactive TV. Singapore also recently issued a second TV broadcast license and new licenses to various broadcasters offering new services. Together with trials for digital TV, we expect these to lead to more innovation in the media industry. We are also encouraging entrepreneurship, particu-larly in technology, while opening our doors and making Singapore attractive to international talent, to reinforce our talent pool.
16 While I am confident that IT, telecomm and media will continue to grow, exactly which technologies and services will take off is extremely difficult to predict, as the example of 3G shows. For Singapore it is a never-ending process of work in progress, making sure that our regulatory framework and promotion efforts keep pace with the rapidly changing landscape. Technology is causing convergence of several industries. Telecomm overlaps with media. Telephone companies are starting to use handphones as a means of payment, and thus spill over into providing financial services. Power companies own ducts and rights of way which can be used to lay optical fibre networks. Our regulations and policies need to keep up with all these kaleidoscopic possibilities. Industry players too cannot afford to stay static, but need to keep abreast with the latest global developments and the most promising new opportunities.
17 In this context, CommunicAsia and Broadcast Asia play an important role, providing the stage for industry players from all over the world to get together, and efficiently over a few days connect, network and search for new opportunities. More than two thousand companies from around the world, including Singapore companies like CET Technologies, Aztech Systems and Systems@Work, are here to showcase their products and services over the next four days. I hope that all of you participating in CommunicAsia 2001 and Broadcast Asia will have a successful exhibition.
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