All over Asia, governments are trying to replicate California’s Silicon Valley. Each of the projects, so far, is a failure. The main reason for the failure is that Asian leaders have not yet realized that it takes more than a plot of land, an impressive budget, a graduating class of computer engineers and a lot of fanfare to make another Silicon Valley.
What it does take are two phenomena: a concentration of great universities, and a society with sufficient freedom, including lack of cumbersome regulations, to encourage entrepreneurship.
Robert Myers, Hoover Institution scholar and Korean affairs specialist, put his finger on the problem in a recent Tokyo speech:
“They are trying to build something called Media Valley in the port city of Inchon, South Korea. When President Kim Dae Jung came to Stanford in June last year, he talked about having a South Korean Silicon Valley, but what he and his advisers have not yet completely understood is that you don’t get a Silicon Valley artificially, you have to have large research universities.
“There are no world-class schools in Inchon. These things come about in time, so the South Koreans like everybody else, are out of step. Developing entrepreneurs is going to take a cultural transition rather than simply demanding you’re going to start a small business.”
It is rather like the days just after the announcement in the early 1980s that Hong Kong would revert to Chinese rule in 1997. Everyone wanted to create “another Hong Kong” in Guam, Okinawa, Taiwan, the Philippines, Timor and Penang.
What was overlooked were the unique factors — an enormous hinterland producing low-cost basic goods and a highly developed port with good human resources operating in a climate of relative freedom — that allowed places like Hong Kong and Singapore to prosper and to define the word “entrepot.”
The would-be Silicon Valleys in Asia are struggling. Besides Media Valley at Inchon, South Korea, there are these:
Japan’s Tsukuba Science City has never taken off, and the country’s use of computers by individuals is relatively low. Japan needs to refocus its stunning technological capability.
Hong Kong’s new Cyberport project at $1.7 billion is a commercial property project in disguise. Microsoft, IBM, Oracale and Hewlett-Packard are listed as tenants, but their facilities will be mostly assembly, marketing and regional sales, with very little if any pure research. Hong Kong’s closest thing to Silicon Valley is the ingenious network of literally thousands of technological pirates, who forge everything from CDs to counterfeit laptops and software, including computer games.
Taiwan’s Hsinchu Science Industrial Park shows aggressive Asia enterprise at its best. There are some 240 local and foreign firms. Japanese funding is behind many projects in Taiwan, Singapore and Malaysia. Taiwan’s brains and budgets are involved in many of China’s Internet startup projects.
Singapore’s government is actively inviting foreigners with skills to come and work in its Science Hub. I was impressed by improved technological facilities at Singapore’s universities during a recent visit. Regulations still inhibit free-wheeling entrepreneurship.
Malaysia’s Multimedia Super Corridor had advice from Japanese management guru Kenichi Ohmae before he had a falling out with Prime Minister Mohamad Mahathir. Ohmae originally planned the concept for the Tokyo waterfront when he ran unsuccessfully for governor four years ago. Japan’s NTT will be a player, along with Lucent Technology and Microsoft. With a completion date of 2020 and a budget of $20 billion, this is Asia’s most ambitious cyber project — on paper.
Two key elements — budgets and planning for better universities and more attention to small-business startup incentives — are still missing from these high-tech schemes.
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