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Figure 10. Composition of Singapore™s IT revenues, 2002


35

30

25

20

15

10

5

0
Share of Each Category

Hardware Software Telecom Services
IT Services Content Activities

Source: Infocomm Development Authority (2003)




software also plays a big role in the IT industry, so there is a rough balance between
hardware and software. Creative Technology, which is a private sector company
specializing in the production of sound cards for PCs, is the best-known example of
Singaporean success in the software sector. In fact, Creative Technology has become
one of the world™s leading and most widely recognized brands in sound cards. This
success is all the more remarkable in view of the limited role of the private sector in the
Singaporean economy and points to a potentially greater role of the private sector in the
New Economy. The export market accounted for 53% of total revenues and the domestic
market accounted for 47%.
Hardware accounts for the lion™s share of the IT industry™s output in Japan, Korea and
Taiwan while in the case of Hong Kong, the IT industry, along with the rest of the
manufacturing sector, has largely shifted production to China. Japan, Korea and Taiwan
are all big-time players in the global IT industry. Japanese consumer electronics firms
have been and continue to be among the most efficient and most innovative firms in the
world, with internationally strong brand name recognition and consumer loyalty. Sony
in particular has become a world-class firm synonymous with superior quality and


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permission of Idea Group Inc. is prohibited.
Opportunities and Challenges of the New Economy for East Asia 333


constantly at the technological frontier in terms of introducing new and better products
for the consumer to enjoy at home. While Sony has been a global technological leader
for a long time in audio-visual hardware based on technologies such as magnetic
recording, optical devices, semiconductors and digital signal processing, the company
has been strategically and gradually shifting its focus toward establishing a presence
in the production of software that plays on its hardware. The acquisition of CBS Records
“ now Sony Music Entertainment (SME) “ and Columbia Pictures “ now Sony Pictures
Entertainment (SPE) “ in the late 1980s marked a giant step in that direction. The success
of Sony™s PlayStation videogames and digital cameras further illustrates the effective-
ness of Sony™s strategy of merging hardware and software in the New Economy.
Samsung Electronics of Korea is another company from the high-income part of East Asia
that is making waves in the global IT industry. In fact, with its electronics products
recognized around the world for their high quality and innovativeness, the company is
the flagship of Korea™s manufacturing sector and perhaps the country™s only truly world-
class brand. Samsung Electronics has become a global leader in semiconductor, telecom-
munication and digital convergence technologies, and the world™s largest manufacturer
of memory chips, TFT-LCDs, CDMA mobile phones, monitors and VCRs. The company™s
total sales reached a US$34.5 billion in 2002, and perhaps more tellingly in terms of
efficiency, its net income reached US$6 billion for the same year. Samsung has become
the world™s third largest maker of mobile phones, a product that accounts for a large share
of its profits. The company has been able to stay one step ahead of its competitors by
spending relentlessly on research and development, investing heavily in new facilities,
and keeping a blue-chip client base. For example, in the memory chip business, while its
three biggest competitors all recorded losses in 2002, Samsung was able to achieve US$2
billion in profits. The company was able to do this by focusing on specialty products
commanding higher profit prices and fatter margins such as graphic chips for game
consoles.
Among countries outside Japan and the NIEs, China is best positioned to become a
manufacturing hub for IT hardware products and indeed this process is already well
under way. The country™s computer hardware industry grew dramatically from non-
existence in the 1980s to the fourth largest in the world with sales of US$23 billion in 2000.
Exports have surged from a mere US$230 million in 1990 to more than US$10 billion in 1998.
Local PC makers such as Legend, Great Wall and Founder are dominating the fast-
growing Chinese market for PCs through a combination of stronger distribution net-
works, lower prices and better after-sales service, even though they were expected to be
no match for well-established, foreign brands. In fact, the market share of foreign brands
has fallen steadily over recent years and is forecast to fall further. The government has
actively promoted the development of the computer industry by high tariffs on imports
as well as requirements on foreign companies to transfer their technology in exchange
for market access. All major Chinese PC makers are involved in technologically beneficial
joint ventures with foreign partner firms.
A danger related to greater inter-country inequality inherent in the IT revolution for East
Asian economies is that it could exacerbate income inequality within a country. This is
especially a concern in countries outside Japan and the NIEs since there is a much closer
link between inequality and poverty in those countries. A digital divide, or inequality in
terms of access to and use of IT, can only put the less fortunate segments of the society


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permission of Idea Group Inc. is prohibited.
334 Park


at an even further disadvantage in an age when information and knowledge are becoming
ever more important determinants of success and advancement.20 The essence of the New
Economy is more information at lower cost, as we pointed out earlier. So, in principle, IT
can serve as a force for greater economic equality. However, in practice, this depends
on the extent to which access to IT is available to all. Therefore, once again we come back
to our point of departure for the IT revolution “ telecom liberalization supported by a
sound regulatory framework. The private sector tends to be more flexible and adaptable
than the government, yet another big reason why it makes sense to involve the private
sector to a greater degree in the telecom sector.
Affordable and reliable telecom services are a start, but only a start in the IT revolution.
Human resource development that equips the entire workforce with basic IT usage skills
is another indispensable ingredient for an IT revolution. 21 A PC and a telephone line will
not do an illiterate person a whole lot of good. Therefore, primary and secondary
education that creates a literate and numerate workforce will remain just as important in
the New Economy as ever. In addition, primary and secondary schools should introduce
computer education as part of their core curriculum. On the supply side, equipping IT
workers with the necessary technical skills as well as investing in tertiary education to
produce a steady stream of engineers is essential to develop a strong IT sector. Although
governments continue to play the leading role in education in East Asia, bringing the
private sector into IT human resource development is desirable. In fact, as the prolifera-
tion of private IT training institutes across the region shows, this is already happening
to some extent. Government regulation of such private sector education should focus on
quality control issues.
There is certainly a lot of merit to the widely heard argument that East Asian education
systems, with their emphasis on memorization and rote learning, will not serve the region
well in the New Economy. Thus the region-wide calls for revamping education systems
to allow for more creativity and independent thinking.22 However, there is also a lot that
the region™s schools, especially those in Japan and the NIEs, do right, such as emphasis
on and their students™ excellent performance in science and math. Encouraging greater
creativity is fine, but this must not mean wholesale imitation of the curricula of Western
countries. Furthermore, we must recognize that the region™s education systems, along
with the mindset and mentality they have engendered, have been in place for a long time
so that the emergence of a mindset and mentality more appropriate for the New Economy
will not take place overnight. Also, many talented East Asians still move to Silicon Valley
rather than contribute their skills to the region. In this case, the problem is not the
education system, but points instead to the lack of a favorable overall environment for
IT entrepreneurship.
In particular, Taiwanese have a highly visible presence among the technopreneurs “ i.e.,
technologically proficient entrepreneurs “ of Silicon Valley. Thousands of Taiwanese go
to U.S. universities each year to study and settle down in the Silicon Valley. In fact, the
Taiwanese, along with Indians, have probably been the most influential expatriate
community in terms of contributions to the emergence of the Silicon Valley as the
epicenter of the global IT industry. Many Taiwanese technopreneurs in Silicon Valley
have returned to their home country to play a catalyst role in its transformation into
Silicon Valley East or Silicon Island. While there have been several factors behind this
transformation, it is difficult to exaggerate Taiwan™s close links to America, in particular


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permission of Idea Group Inc. is prohibited.
Opportunities and Challenges of the New Economy for East Asia 335


the role of Taiwanese returnees from Silicon Valley. Just as important as their innovative
technical skills have been the spirit of entrepreneurship and risk-taking that they have
brought back to their motherland.
Taiwan has a number of globally recognized IT companies, most notably Acer, which
ranks among the world™s top ten branded PC vendors with sales of US$13 billion in 2002.
Taiwan Semiconductor Manufacturing (TSMC) is the world™s largest contract chip
maker, commonly called a foundry, and its closest rival is another Taiwanese company
“ United Microelectronics (UMC). The two together accounted for over 60% of the global
foundry market in 2002. The prominence of TSM and UMC points to a more general
characteristic of the Taiwanese IT hardware industry. Most of the industry consists of
component suppliers that supply generic parts, even completely assembled machines,
at competitive prices to big foreign brand-name companies that concentrate on marketing
and sales. For example, Quanta Computer is the world™s biggest designer and manufac-
turer of notebook PCs, but sells its output to top brands such as Dell and Hewlett-
Packard. It was the Taiwanese in the Silicon Valley who first spotted the trend of a division
into two tiers “ manufacturing and marketing/sales “ within the global IT industry and
went home to set up many of the component suppliers that form an essential extension
of America™s IT industry. Again, the role of the returnees from the U.S. has been
indispensable to Taiwan™s efforts to successfully find a major IT niche for itself.
Central to a favorable overall environment for IT entrepreneurship is the availability of
capital for would-be IT entrepreneurs. One of Silicon Valley™s biggest advantages over
aspiring IT hubs is its large corps of venture capitalists who evaluate the viability of New
Economy start-ups and help them grow. Unfortunately for East Asia, the region lacks
venture capitalists, and for a good reason.23 Venture capitalists reflect the depth, width
and sophistication of U.S. financial markets. When East Asia™s banks and capital markets
did a poor job of evaluating risk and monitoring investments even in the Old Economy,
and this was one cause of the crisis, it is unrealistic to expect them to do a good job in
the much more complex and unstable New Economy. Venture capitalists, just like more
independent thinking, cannot be created overnight. However, East Asian countries can
make a start by opening up and liberalizing their financial systems so that scarce
resources will finally begin flowing to their most productive uses.




Inter-Regional Imbalances
Casual observation suggests there are significant inter-regional economic imbalances
within East Asian countries. Capitals and other major urban centers usually account for
a disproportionately large share of real output and income. This means that the residents
of those areas enjoy higher living standards in comparison with their fellow citizens in
other parts of the country.24 Even in relatively developed and industrialized countries
such as Korea, a noticeable economic gap exists among the various regions. Such
imbalances are not unique to East Asia and are quite common throughout the world, and
they tend to be more pronounced in developing countries.




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336 Park


Concentration of economic power often extends into other areas such as politics, culture,
education, medical care, and infrastructure. For example, an oft-cited reason for migration
into the major urban centers is the higher quality of education and hence greater
opportunities for children in the future. To cite another example, in poorer countries, the
lack of adequate basic infrastructure such as power, water supply, transportation and
communications practically forces companies to locate in main cities. Geographical
concentration of resources in virtually all aspects of national life inevitably interferes
with well-balanced economic growth and development.
Of course, we must also realistically acknowledge that the predominant role of Seoul in
Korea, Kuala Lumpur in Malaysia, Manila in the Philippines, and so forth are not
accidents but rather reflect the evolution and interaction of economical, political,
sociological, institutional, and historical forces. Be that as it may, it is equally clear that
the geographical concentration of resources entails serious negative consequences, not
only for the rest of the country but also for the main cities themselves as well.25
For example, the massive flow of labor into the capital and other major urban centers
creates congestion, pollution, and excessive strains on infrastructure and basic services.
Meanwhile, the rest of the country, especially the rural areas, suffers from brain drain,
graying of population, and general decay and loss of dynamism. Paradoxically, while the
main cities suffer from the negative consequences of over-population, at the same time
some parts of the country suffer from under-population. Narrowing of the inter-regional
economic gap is thus a win-win situation that benefits a Jakarta as much as a Kalimantan.
It is worth noting we are not just talking about the urban-rural divide here. The inter-urban
divide, in the sense of the contrast between fast-growing main cities versus slow-
growing or even declining regional cities, can be equally stark in some cases. The fact
that the so many migrants, especially the young and the ambitious, choose to migrate
to major cities, despite the unemployment, congestion, pollution, crime, and other
problems, attests to the enormous differences in opportunities between the main cities
and the rest of the country. Therefore, the key to achieving a well-balanced economic
development is to reduce such enormous differences in opportunities.




IT and Imbalances
It is precisely in this area, creating a more level playing field for the various cities and
regions of a country, that IT can make a solid contribution.26 As indicated earlier, the
essence of IT is that it reduces the cost of information and thus provides more equal
access to information. Physical presence is less important in the New Economy than in
the Old Economy due to the high and ever-improving quality of virtual presence. For
example, the Internet allows us to constantly stay in touch with other parties and enables
us to take care of many businesses that would have required traveling before. Therefore,
the physical concentration of institutions and facilities in the main city becomes less of
an advantage for the main city and equivalently, less of a disadvantage for the rest of
the country, in the New Economy.




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Opportunities and Challenges of the New Economy for East Asia 337


Underlying the physical concentration of institutions and facilities is a concentration of
information and knowledge. Information and knowledge are immensely valuable re-
sources in any economy, whether Old or New. One of the fundamental sources of the
inter-regional inequality of opportunity that is at the root of inter-regional economic
inequality has to be the asymmetric inter-regional distribution of information. Fortu-
nately, IT will substantially reduce this information gap and hence promote a more
geographically balanced pattern of economic development. We noted earlier that the IT
revolution will help to democratize information by spreading information from a privi-
leged elite to masses of ordinary people. By the same token, the IT revolution will devolve
information from main cities to other areas.
As noted previously, physical location loses at least some of its relevance in the New
Economy. Among other things, the Internet allows for remote or virtual access to a whole
new range of employment opportunities.27 The noticeable increase in the number of stay-
at-home workers is changing lifestyles in developed countries, and we have already
touched upon how IT has enabled India to become a major leader in back-office services.
IT will also bring the central government and bureaucracy closer to those living outside
the capital by providing them with improved and more convenient access to administra-
tive services. At the same time, IT will strengthen the local governments in regional cities
by enabling them to better serve surrounding rural areas. 28 IT-enabled educational
services can reduce inter-regional gaps in the quality of education. One example is online
distance education for remote areas. In short, IT holds out a whole lot of potential as a
tool for well-balanced development.
Just as we must be realistic about the potential economic benefits of the IT revolution,
we must also be realistic about what IT can do and cannot do for regional development.
IT will certainly not by itself enable regions and regional cities to leapfrog their way into
parity with the main city. To begin with, interactions through the Internet can never
completely substitute for face-to-face interactions.29 A click of the mouse will never feel
like a handshake. In this sense, even in the New Economy main cities still enjoy the
positive network effects associated with having the vast majority of important people.
In many countries, including relatively advanced ones such as Korea, chances are that
anybody who is “somebody” will live in the main city. In other words, although IT
reduces distances, there is clearly a limit to its ability to do so. To cite just one example,
while IT-enabled educational services hold a lot of promise, they can never completely
substitute for actual schools and teachers.
We saw earlier that countries have to fulfill certain pre-conditions before they can begin
to enjoy the economic benefits of the IT revolution. So it is with regional development.
That is, although the benefits of IT for regional development are potentially large, they
are neither automatic nor guaranteed. Above all, the realization of those benefits requires
the availability of reliable and affordable telecom services throughout the country.30 In
fact, concentration of telecom, IT education and other IT infrastructure in the main city
will widen rather than narrow the inter-regional economic gap by creating an inter-
regional digital divide.31 Equally importantly, the basic ingredients of regional develop-
ment in the Old Economy, such as transportation, education and strong local govern-
ment, remain as relevant as ever in the New Economy. In other words, IT is a complement
rather than a substitute for the fundamental ingredients of regional development.32



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Concluding Remarks and Implications
for FDI
I have limited the discussion to what I believe are the most important issues for the sake
of clarity and focus. This means I have omitted some relevant considerations. For
example, in addition to telecommunications infrastructure and human resource develop-
ment, the New Economy requires a well-functioning legal and regulatory environment
that covers areas such as contract enforcement and consumer protection. Those issues
are especially relevant for Japan and the NIEs since these economies by and large already
have the physical and human infrastructure in place. A key issue in the integration of
these economies into the New Economy is to encourage consumers and companies to
use IT more actively for e-commerce, and a sound legal and regulatory environment will
be conducive for making this connection.
Let me briefly repeat the main points of my discussion, in the hope that they may stimulate
discussion among East Asia™s policymakers and general public on how to best proceed
with the New Economy. First, the IT revolution presents many opportunities for East
Asian economies in terms of improving efficiency and thus promoting economic growth.
Those opportunities are especially inviting in the manufacturing sector, the region™s
economic mainstay, since the bulk of global growth in e-commerce is expected to come
from B2B. Thus the focus of the region™s IT investments must be on local applications
of existing technology.
Second, while East Asia stands to benefit significantly from the IT revolution, we should
be realistic about its limitations as well. In particular, while IT may allow countries to
leapfrog some technological barriers, IT will not enable countries to leapfrog sound
economic policies. The New Economy may have changed the world, but not by so much
as to change the key ingredients of successful economic performance. IT will help East
Asian countries achieve sustainable economic growth and development only insofar as
they maintain a sound overall policy environment.
Third, sitting back and waiting for the New Economy to arrive is a foolproof recipe for
making sure it will never arrive. The New Economy requires basic pre-conditions. Above
all, the poorer East Asian countries must liberalize their telecommunications sectors in
order to improve the quantity and quality of telecom services. They must also make the
necessary investments in human resource development. As for the region™s richer
countries, where the physical infrastructure is well developed and the quality of human
capital is higher, the greater challenge lies in creating socio-economic conditions that are
conducive for greater use of IT in economic activities.
Fourth, just as IT holds out a lot of promise for economic growth, it is also a potential
catalyst of regional development in East Asian countries. In particular, IT promotes inter-
regional equality of opportunity by breaking down the concentration of information and
knowledge, and disseminating those valuable resources more evenly throughout the
country. However, there are limits to what IT can do in terms of bringing about a more
balanced development pattern and, just as importantly, the benefits of IT for regional
development will not be realized unless East Asian countries fulfill certain key pre-
conditions.


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Opportunities and Challenges of the New Economy for East Asia 339


The dawn of the new millenium has thrust upon mankind a technological revolution that
is sharply reducing the cost of information. In combination with globalization, the IT
revolution is creating a world economy in which competitive pressures are as fierce and
relentless as never before. East Asian economies will survive and thrive in this highly
competitive New Economy only if they keep doing the things that they have done right,
such as saving and investing a lot, while improving the things that they need to improve,
such as the quality of corporate governance. If they do so, the New Economy will indeed
prove to be a boon for all East Asians.
With respect to FDI, our analysis entails some significant policy implications. Above all,
we have seen that affordable and reliable telecommunications services are probably the
single most critical enabling pre-condition for the IT revolution and the New Economy.
Again, this is especially relevant for the region™s poorer economies. What this means is
that governments throughout the region should seriously consider opening up their
telecom sectors to private sector investors, including big foreign telecom companies with
lots of capital and expertise. A big, practical obstacle for the governments of many
developing countries in this area is the loss of significant revenues associated with the
privatization of state-owned telecom monopolies. However, in light of the critical role of
telecommunications in the IT revolution, it would be myopic indeed for governments to
place too much weight on those revenue losses. In short, the IT revolution makes the case
for telecom liberalization, including opening up to foreign investors, stronger than ever
before. Governments of countries that are saddled with backward and under-developed
telecom sectors should even consider offering fiscal incentives to attract foreign
investors.
At the same time, the IT revolution significantly strengthens the incentive for FDI in the
telecom sector. We can expect the demand for telecom services to grow rapidly as the
IT revolution, including its commercial applications, takes root in an economy. Precisely
because affordable and reliable telecom services are the single most enabling pre-
condition for the IT revolution and the New Economy, the telecom industry is likely to
offer investors, including foreign ones, higher and more sustainable returns than in the
Old Economy. However, the extent to which FDI takes place will depend heavily on the
degree of telecom liberalization. Furthermore, telecom liberalization in and of itself will
not fully unleash the potential benefits of the IT revolution for economic growth, which,
in both the New and Old Economy, requires a sound overall policy environment and helps
to determine the returns to domestic and foreign investors, in telecom and beyond.
While FDI in the telecom sector can be a mutually rewarding experience for the host
country and well-established foreign telecom companies “ the former benefiting from the
capital, technology and skills of the latter in improving telecom services, and the latter
reaping attractive and sustainable returns on its investments ” the IT revolution offers
other mutually rewarding investment areas as well. For example, human resource
development, which represents another key enabling pre-condition for the IT revolution,
is one such area, as are complementary New Economy infrastructures such as logistics
and transportation. Computer hardware and software also represent investment areas
that can benefit both the host country and the foreign investor, although whether such
FDI improves the welfare of the host country depends on the competitiveness of the
resulting products vis-à-vis imports.



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From the host country™s viewpoint, the benefits of FDI into telecom and other IT-relevant
sectors are not limited to fostering the New Economy and ultimately faster economic
growth. As we have already seen, IT can play a significant role in reducing inter-regional
inequality within a country, although there are limits on how much IT in and of itself can
do so. To the extent that promoting a more balanced national development is a high-
priority objective, governments may offer additional fiscal incentives for foreign inves-
tors in less developed regions. Furthermore, FDI into such regions may very well be
commercially viable for the investors themselves. For example, stylized facts suggest that
there is a strong pent-up demand for telecom services, including satellite-based services,
in many backward regions of poor developing countries.
Finally, although the focus of this paper is on East Asia, all of the main lessons are
applicable to other parts of the world as well. Our lessons are particularly relevant for
developing countries where economic growth and well-balanced development are more
urgently needed. In conjunction with sound policies, IT will enable countries to grow
faster as well as grow in a more balanced way.




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344 Mahajan, Umrani & Chaudhari




Chapter XVII



Digital
Engineering Campus:
Economics, Acceptance,
and Impact
Milind J. Mahajan
Mirash Infotech, India

Sunil S. Umrani
Sunind Systems, India

Narendra S. Chaudhari
Nanyang Technological University, Singapore




Abstract
In this chapter, we introduce two existing web-based, e-learning approaches, and
examine economic and social aspects of their usage in society. Specifically, we briefly
introduce an e-learning initiative in Singapore. Secondly, we give a detailed description
of a case study regarding the experiment called “Digital Engineering Campus,” which
is an NGO initiative to provide supplementary educational facilities for engineering
colleges in India. Considering the economic as well as social benefits, using our
detailed case-study of Digital Engineering Campus, we argue that developing countries
like India have tremendous growth potential in web-based education. Further, the
experiences of developed countries with web-based education will prove to be highly
beneficial for developing countries like India.



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Digital Engineering Campus 345


Education and the Web: Economic and
Social Aspects
Continued growth of the education sector is very important for improving the standard
of living. This sector becomes all the more important for developing countries. Motivated
by the International Finance Corporation (IFC) and World Bank (World Bank, 1994, 1996),
James Tooley reports factual data about 18 case studies of education projects in 12
countries (Tooley, 2001). A part of Tooley™s study also reports the use of Internet for
teaching in India (Tooley, 2001).
Professor Roger C. Shank, in his excellent book, “Designing World-class e-Learning,”
contrasts Internet-based learning with traditional, school-based learning (Shank, 2002).
Shank coined the term, “learning-by-doing” for e-learning, and has given seven criteria
for assessing the effectiveness of e-learning, specially focusing the freedom of learning.
He provides in-depth observations of the e-learning instructional design process,
delivery of resources, and accessing the utilization of e-learning resources. He has given
concrete illustrations of these points by including the case studies of e-learning
initiatives of IBM, GE, Harvard Business School, and Columbia University.
Computing and Web technology has caused widespread economic disruption, limiting
growth in productivity (Brown & Duguid, 2000). For example, for the U.S.A., the multi-
factor productivity growth rate (labor and capital taken into account) was 2.5% for 1984
to 1973, but it was only 0.7% for 1973 to 1990 (Brown & Duguid, 1996). To explain this
phenomenon, the inventor of mouse, Douglas Englebart, states that, “Real social danger
today is that the technology is erupting and moving so much faster than it ever has in
all of our historical experience ¦ time to start adapting society to this revolution in the
technology. There is a lot of potential danger ahead if we do not adapt to it successfully”
(Huges, 1986, p.599).
Business writers Downes & Mui (1998) define the “Law of Disruption” as, “social, political
and economic systems change incrementally, but technology changes exponentially.”
However, Brown & Duguid (2000, p.85) indicate the (future) emergence of new technol-
ogy to adapt this: “¦(e-) technology design has not taken adequate amount of work and
its demands ¦ (technology design) has aimed at an idealized image of individuals and
information.”
Indeed, we see a number of attempts to achieve this goal. Due to influential web-based
learning tools, we now witness emerging concepts of distributed intelligence, distributed
creation and sharing of knowledge, formation of the social nature of learning ecology,
and its social impact.
Singapore gives us a scenario of the fastest growth in the advanced world. In Singapore,
the e-learning initiative is largely due to the push of government, and we very briefly
comment on this scenario in Singapore, both at tertiary education, as well as primary and
secondary schools.
Developing countries like India have tremendous growth potential. In such countries,
the government-supported education system is slowly being supplemented by non-
governmental organizations (NGOs). To illustrate the interplay of government as well as


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346 Mahajan, Umrani & Chaudhari


NGOs in the evolution of the social fabric, we have chosen to detail a scenario in a
developing country like India. We give a scenario concerning India™s electronic and
educational infrastructure, university system, and attempts for quality assurance in
higher education in India. We focus on an engineering education scenario in one of the
states, Maharashtra State within India. We include the details about our case study,
called “Digital Engineering Campus,” a portal designed and maintained by an NGO,
Sunind Systems Pvt. Ltd. (SSPL), Pune. More technical details about this experiment are
given in Appendix A. We conclude this chapter by giving brief remarks.




E-Learning Initiative at Singapore
To induce its wider impact in Singapore™s highly dynamic society, Singapore™s govern-
ment has adopted e-learning initiatives. To increase awareness of e-learning, it organized
a month-long campaign during 2000 and 2001. In the past three years, the roots of e-
learning have enthusiastically been introduced in educational institutions in Singapore.
Nanyang Technological University (NTU) has adopted e-learning initiatives since 1999.
The main reason for giving so much importance to this initiative is the wider perception
that the traditional models of learning (e.g., classroom model of learning, participation
in training programs, conferences, etc.) are too costly, and many times they fail to deliver
improved performance.
A uniform web-based platform for delivery of e-learning resources to students was
introduced in NTU, Singapore in 2000. The delivery platform is a customized version of
Blackboard, and is called “edventure.” Within NTU, most of the web-based content is
used to supplement and enrich the face-to-face delivery. However, in 2002, many schools
in NTU took a major step by deciding to replace the classroom lectures with web-based
content.
Lecturers are encouraged to use “edventure” for posting suitable e-content for their
courses. It may be noted that security features of “edventure” provide suitable privacy,
which can be controlled by the instructor-in-charge for the course. The easiest alterna-
tive is to put textual content of PowerPoint presentations on the Web site. A few lecturers
have also used voice narration recorded with the PowerPoint slides. Evolution of a
complete package with video, voice, slides, and hyperlinks is a recent phenomenon. An
independent study relating the effectiveness of such contents has been carried out by
Bartsch & Cobern (2003). Teachers, students, as well as administrators have many
concerns regarding this initiative: Can the e-lectures be as effective as (or more effective
than) the face-to-face lectures? Some studies have been carried out for tackling this
problem. However, the discussion about these studies is not within the scope of our
discussion here.
Successful integration of Information and Communication Technologies (ICTs) in
schools has been studied in last decade (e.g., Sivin-Lachala, 1998). The main focus of the
application of ICTs in schools in Singapore is to develop higher-order thinking skills.
Ping and Hang (2003) give the study of effectiveness of ICTs within schools in Singapore
from the pedagogical and socio-cultural point of view.


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Digital Engineering Campus 347


India: Electronic & Educational
Infrastructure
The Internet is transforming the scenario of imparting education in the developing
countries like India at a very fast rate (some related information is available on the Web
site: http://www.educationinfoindia.com/onlinedu.htm). Many universities, like Indira
Gandhi Open National University, New Delhi (Web site: http://www.ignou.ac.in),
Jawaharlal Nehru Technological University, Hyderabad (Web site: http://www.jntu.ac.in/),
Punjab Technical University, Jalandhar (Web site: http://www.punjabtechnical
university.com/), etc., in India have an “online virtual campus.” Even states like Andhra
(Web site: http://www.andhraonline.com), and Kerala (Web site: http://www.kerala.gov.in/)
have good portals giving a lot of useful information. Many universities in India now have
distance education programs and the Internet is now widely used by these universities
for facilitating their activities (Web site: http://www.shiksha.com/infobin/corr/
corindex.htm).
Indeed, in a two-day conclave of the Confederation of Indian Industry (CII), Gautam
Kumra of McKinsey and Company, stated that the cost of education in India is 30 percent
of the cost in U.S., and there are several reasons why India can compete globally in the
higher education market. He further predicted that it is possible to attract more than
150,000 foreign students to study in Indian Institutions by 2010 (Indo-Asian News
Service, 2002). While India has the capability to maintain the quality of education, the
investment in maintaining this high quality using Internet resources needs effective co-
ordination of web-professionals as well as academic professionals.
At the national level, India has a highly developed satellite program, having launched
a wide range of satellites that are used for communications, television broadcasts and
remote sensing. In July 2002, the central government of India launched two new satellites
(Edusat and Gramsat) to give a boost to education and rural development.


Global Education Market and India

As observed in the Indo-Asian News Service in July of 2002, “Australia was able to
increase the number of foreign students studying there from 20,000 in 1990 to 100,000 in
2000 and earned revenue of $800 million.” With the economic slow-down, countries like
Singapore as well as India and China, are exploring the possibility of tapping the global
education market.
India is particularly attractive for foreign students, as it has advantages such as: (i) high
fluency of English language amongst its academicia, (ii) low cost of living, and (iii) very
high educational standards. In addition to the already existing seven IITs in metros,
central government is planning to have five more IITs at relatively smaller places. High
educational standards in Indian Institutes of Technologies (IITs) are now spread in
relatively smaller places using web-based education. For example, lectures in the K.R.
Information Techology School of IIT Mumbai are now available online during the
classrooms in institutes located thousands of kilometers away in places like Nagpur,


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348 Mahajan, Umrani & Chaudhari


Indore, Latur, and Pune (Web site: http://www.dep.iitb.ac.in/rc.html). Further, many
institutes have been identified as “National Institutes of Technology” (NITs), and they
have been given substantial funding for spreading Internet-based education.


Role of Universities in Higher Education in India

Within the field of higher education, India has 259 universities having more than 10,750
colleges affiliated to them, eight million students, and 400,000 teachers. Thus, it has one
of the world™s largest higher education systems, monitored at the national level by
University Grants Commission (UGC), Government of India. With the demonstration of
success with experiments like the one in IIT Bombay, their adaptation at wider level has
become feasible. Within India, the growth in the field of higher education has resulted
in the participation of the private sector in education. The market size of management
education alone in India is estimated to be around US$300 million, while the Information
Technology (IT) education and training is estimated to be around US$150 million, with
an annual growth of 25 percent.
For quality assurance of educational standards, India has the National Association and
Accreditation Council (NAAC).
Universities are primarily responsible of maintaining the quality in education. They have
direct control over the examination system. Many universities have already established
e-learning sites for their students. In our specific experiment of engineeringcampus.com,
we are yet to associate it with all universities. However, with a directive from the state
government, all the universities will contribute course content to this site.




Engineering Education in Maharashtra
State
The infrastructure cost for establishing connectivity facilities are far less important, and
the major cost component is in the form of “soft” costs that have to be incurred in the
effective usage of Internet facilities. Continuous maintenance as well as updating of
information on the web is especially important in fields like education. Many educational
institutes in India are realizing this issue in a “hard” way. In the state of Maharashtra,
the government is convinced about this problem, and has entrusted this responsibility
to professional organizations. We focus on this initiative to support engineering
education.
Maharashtra State in India has more than 150 engineering colleges, and has more than
50,000 students studying in them for their engineering degree. Further, the state has more
than 110 polytechnic-level institutions, which provide diploma-level engineering educa-
tion to more than 70,000 students. The state has some of the most prominent universities
like University of Poona, Bombay University, who maintain very high standards of
engineering education for tens of thousands their students. While the state has well-



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Digital Engineering Campus 349


developed industrial belts like Pune-Bombay, majority of the engineering colleges in the
state are located in rural areas, and have significant percentage (more than 50 percent)
of students studying in them.
The Government of Maharashtra is concerned about uniformity in the quality of
engineering education, especially in remotely located engineering colleges within the
state. Techno-savvy solutions like digital course contents, online quizzes, and online
evaluation and interactivity with experts using the Internet, have still social resistance
in other branches of education. However, in the area of engineering education, this
alternative has received a very welcome response widely. While the Government of
Maharashtra does not want to commit any financial resources for this activity, it has
entrusted the responsibility to Non-Government Organizations (NGOs).
In the remaining part of this chapter, we discuss the socio-economic aspects of one such
experiment called “Digital Engineering Campus” (also referred to as
engineeringcampus.com). This web-based solution targets a few tens of thousands of
engineering students as users. Furthermore, it makes provision for a few hundreds of
engineering teachers to interact with these students for imparting a quality education.
In the context of Digital Engineering Campus, in the next section, we also address the
following issues:
1. Socio-economic details about the engineering education within the state,
2. Cost-effectiveness of digital solutions,
3. Social acceptance of online as well as off-line materials, especially related to
effective questions, and cost-effectiveness of the existing Internet-based system,
4. Future expansions of this system, as well as expected costs involved,
5. Socio-economic impact and challenges in the immediate future.




A Case Study: Digital Engineering
Campus
Engineering colleges in Maharashtra state are spread all over the state and most of them
are in the rural areas. The students studying in these colleges face the following
difficulties:
a. Unavailability of expert staff for teaching,
b. Less number of industries available for summer training, and project work,
c. No career guidance centers,
d. Unavailability of renowned publications, books,
e. Lack of access to expert professors and students of urban engineering colleges.


As the Apex body at the central Government level, All India Council for Technical
Education (AICTE) has a responsibility of maintaining the quality of engineering


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350 Mahajan, Umrani & Chaudhari


education at the national level. The AICTE act, passed by the parliament, empowers
AICTE to provide as well as revoke the accreditation for each college depending upon
facilities provided by that college to students.
As the Apex body in state, the Higher and Technical education department of the
Government of Maharashtra state is responsible for providing all the necessary facilities
to engineering students and overcoming the difficulties stated above. Also it is
responsible for improving the quality of education in the state. Though very few colleges
in the state are Government run or Government funded, this department has a respon-
sibility for maintaining uniformity in education by controlling the admission process all
over the state.
The availability of Internet access in remotely located engineering colleges is still a real
problem. Here, AICTE has taken an initiative to provide all Engineering colleges with
financial support for establishing Internet facilities in their colleges. Also AICTE has
been forcing all colleges to set up a dedicated computer lab only for Internet browsing.
Thus, both state government, as well as AICTE (at national level) is helping technical
educational institutes in pursuing Digital E-learning tools to a large extent. Surely these
positive steps from government and the participation of NGOs are making an impact on
the digital solutions, and e-learning concepts.
As an initiative in this direction, while the Government of Maharashtra does not want to
commit any financial resources for this activity, it has supported an NGO, with one of the
authors (Mr. Sunil Umrani) as CEO (Sunind Systems Pvt. Ltd.), to pursue these activities.
This organization now has a functional “Digital Engineering Campus” (Web site: http:/
/www.engineeringcampus.com/) with hundreds of thousands of engineering students as
users, and hundreds of engineering teachers who interact with these students for
imparting a quality education.


Socio-Economic Details “ Some Observations

Engineering colleges in the state are divided in different categories as follows:
1. Government colleges “ Owned by government,
2. Semi-Government colleges “ Partially funded by government, and,
3. Private colleges “ Privately run colleges (self supporting “ financially).


State Government controls the admission process. The main reason for this control is to
ensure justice to a large number of candidates desiring the admission to limited seats.
A directive of the Supreme Court of India allows the private colleges to choose their own
fee structure (justifying it on the basis of their expenses). Subsequently, Government of
Maharashtra gave the freedom to private colleges to decide the amount of fees. However,
in September 2003, this led to the situation in which a majority of meritorious students
were forced to pay a huge amount of fees for their education, which they could not afford.
This effectively denied admission to a large number of such students belonging to the
families having average, and lower-income levels. Maharashtra state witnessed huge



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Digital Engineering Campus 351


social unrest disrupting the admission process. While the matter has now been referred
to special commissions, and courts, by and large, the existing fee structure in private
colleges is as follows:
(a) Free seats “ fee charged is same that of Government college,
(b) Paid seat “ fee charged is pretty high and is approximately eight to 10 times that
of free seat. (To control the social unrest, the state legislative assembly is in the
process of imposing directives about the fees for these seats.)


Cost-Effectiveness of Digital Solution

There is a scarcity of experienced professors in rural areas. Students in the colleges in
rural areas are bound to opt for private coaching classes or search for class notes of
renowned professors. They travel to different colleges in urban areas. They spend their
valuable time as well as money for this purpose. With a digital solution, they can get the
access to these professors at any given time from their computer system.
As a second example, engineering students have to undergo a summer internship
program and complete project work in industries in their final academic year. Due to
limited industries in many parts of the state, the students of colleges located in the remote
and underdeveloped areas have to travel to the industrially progressive belts where
industries are in ample numbers. For this they again spend thousands of rupees and
valuable time. In spite of spending a lot of money and time, it is not guaranteed that all
the students will get projects or summer training. Many of the students fall in traps and
buy dummy certificates and ready-made projects from small industries. This not only puts
students in monetary losses, but also hampers the quality of graduating engineers.
With Digital Engineering Campus, this situation is overcome by virtually bringing the
industries to every student, via the Internet. This site acts as a bridge between the
students and the industries. It is a give-and-take policy with a win-win situation, where
industries get a centralized database of all the students in the state, and the students get
access to the information about the industries. The industries select or search the
students™ list as per their criteria and inform the colleges through the Internet. Industries
also put up their requirements regarding the available projects and training on the web
portal. Students can view the list and then interact with the short-listed industries, and
personally call upon them or visit them.


Socio-Economic Acceptance of Digital Solution

In 2001, the acceptance of such a new, innovative idea was slow. However, the response
is improving very fast. Support of the government in these activities facilitates the
expansion of this digital Internet-based, e-learning system. Government recognition
plays a very important role in the initial phase, until the time the users of the site are well
aware of the usefulness of the contents.
In the study material section, discipline-wise courseware notes designed by subject
experts will be provided. Last minute revision is an added advantage. This is to help the


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352 Mahajan, Umrani & Chaudhari


students save valuable time, by doing away with referring many books for each and every
topic. Subject experts have designed the study material, after extracting information from
various books, so as to give the students the best possible course material.
University Question papers of previous years are available to the students. Viva and the
Oral Exams section help the students in preparing for the examinations through the Online
Oral Exams. In the Forum section, students can place their queries related to their
discipline, which are answered by the Subject Experts. This is especially useful for
students located in remote areas who can interact with the subject experts at any given
time and get their problems tackled on a one-to-one basis. Also, there is the facility to
browse the Question Archives and a few more features are included. Students have
already reported saving of their precious time and money.


Details and Future Expansion

The facilities provided on the Web site “EngineeringCampus.com” are listed separately
(in Appendix A). As a future expansion, a video-conferencing facility will be added to
the web portal. This is an innovative module being incorporated into the web-based e-
learning program. As the name suggests, the students can not only listen to the lectures
(Video Streaming), but also get in touch and interact with (Video Conferencing) eminent
lecturers, professors, distinguished persons from within the state or other parts of the
country by prior arrangements. Students are informed about the upcoming lectures and
seminars by group messages.


Socio-Economic Impact and Challenges in the
Immediate Future

Socio-economic impact involves far-reaching positive consequences. It is a gradual and
ongoing process where students, especially those from rural areas will benefit im-
mensely. Due to a tie-up with various industries for projects and placements, opportu-
nities for jobs will greatly increase. These trends will motivate the students to excel in
academics and at the same time gradually elevate the economic status.
The implementation of this web-based, e-learning portal incorporates distance learning,
advanced teaching models, development, visualization, delivery mechanisms of
courseware, video-conferencing, use of web browsing and e-mail facilities, facilities
which generate employment opportunities, etc.
Acceptance of this innovative e-learning concept as a supplement to the traditional
education system is a challenge. Interacting with thousands of students, colleges,
universities, faculties, and industries and bringing them all together on a single platform
poses an exciting prospect and a challenge. Penetrating rural areas with this latest
technology and its implementation is also a formidable task.




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Digital Engineering Campus 353


Benefits to the Student Community

We briefly give a list of some of the benefits of this initiative to students:
1. Study material, compiled by the highly qualified and experienced faculty, inter-
views and discussions involving eminent persons and constant contact with these
faculties for getting problems and queries solved,
2. Students can send solved answer papers and the experts will evaluate and suggest
changes and provide tips, etc.,
3. Students can put forth their views and interact with the elite panel,
4. Students can gain confidence of attending the much-dreaded “Vivas” by going
through a question bank of subjective and objective questions with model
answers,
5. Placements, summer training, and projects can be selected by interacting with the
various industries online, thus saving valuable time,
6. Guidance on the methods of preparation, handy hints and schedules of Post
Graduation and other competitive examinations (GATE, TOFFEL / GRE / CAT / CET,
etc.) and venues and other relevant details are easily available,
7. Being in touch with the latest developments in the field of science and technology
is possible, through publishing of white papers,
8. Placing orders and subsequent door delivery of engineering books (including
those which are difficult to procure), as well as CBT kits is done online,
9. Interaction with fellow students of different colleges, for exchange of information
like college festivals, picnics, and resale of engineering tools and instruments,
hostels, etc., is possible,
10. E-mail and chat facilities are provided,
11. Experts, college authorities and other people from the education department can
be contacted easily throughout the year for queries.


More details of digital solutions provided on engineeringcampus.com are given sepa-
rately in an Appendix A.




Concluding Remarks
Many facets of the web-based model of education have evolved in the last decade, and
advanced countries already have tools for implementing many of such important facets.
Some of the most important features of web-based education are: (i) learning by doing,
(ii) learning through discussion (boards), with the ability to review discussion threads,
(iii) quick self-evaluation, and (iv) guided feedback. Companies like Blackboard have
already well-established tools for implementing such features. Evaluation of effective-



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permission of Idea Group Inc. is prohibited.
354 Mahajan, Umrani & Chaudhari


ness of these technologies is frequently carried out in advanced countries. The results
of such studies lead to continuous improvements in tools for developing web-based
education.
Developing countries like India have tremendous growth potential in web-based educa-
tion. NGO™s have been supplementing such efforts in India. A lot remains to be done
about systematic evaluation of the effectiveness of these efforts. However, in general
the advantages derived by experiments like “Digital Engineering Campus” are highly
useful from socio-economic considerations.




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World Bank. (1994). Higher Education: The Lessons of Experience. Washington, D.C.:
World Bank.
World Bank. (1996). From Plan to Market: World Development Report 1996. Washing-
ton, D.C.: World Bank.




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Digital Engineering Campus 355


Appendix

Brief Overview of “Digital Engineering Campus”

The students get registered on the Web site and are provided unique user names and
passwords for logging onto the Web site and making use of the facilities provided. A joint
committee, comprising of company employees and officials from the education depart-
ment co-ordinates and monitors the progress and oversees the implementation.
The examples of Digital Engineering Campus (www.engineeringcampus.com) implemen-
tation in Maharashtra and Assam states of India are highly encouraging. Maharashtra
has nearly 150,000 students pursuing various engineering courses. Here, the project has
been successfully implemented at some colleges. Similarly, it is in the process of being
implemented in the northeastern state of Assam, which is remotely located and has a hilly
terrain. Thus, Digital Engineering Campus is a boon to the engineering students of
Assam, who can interact with the best academicians and gain the knowledge in spite of
being remotely located. Industries in the country are accessible for summer training,
projects and placements.
In Assam, an implementation of a pilot project for the students and faculty of the
Government College of Engineering “ Guwahati pursuing Bachelor™s degree and Post
Graduation various disciplines of Engineering has been done. The contents displayed
on the web-based, e-learning program are made available to all the students and faculty
of the concerned disciplines, separately. Staff and students of the Government College
of Engineering “ Guwahati are able to access the data pertaining to their disciplines, by
use of unique user names and passwords, provided by the company Sunind Systems Pvt.
Ltd. (SSPL).


Details of Implementation in Maharashtra State

More than 18 facilities offered to the students are broadly classified under five headings,
namely:
1. Academics
2. Industry
3. General
4. User
5. Others


1. The Academics section deals with all the academic requirements of the students
and provides guidance in the form of study material/question papers/forum to
interact with experts/video streaming/video-conferencing, etc. Highly qualified
and experienced (10 years+) Experts™ panel is responsible for handling the respec-
tive disciplines.


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356 Mahajan, Umrani & Chaudhari


2. Industry as the name suggests, provides unlimited opportunities to the students
to explore avenues for projects, summer training and jobs. This innovative facility
for the first time brings the students and the industry together on a common
platform.
3. Facilities like Online Bookstore, post-graduation (PG) “ higher education oppor-
tunities, contacts, News from Directorate of Technical Education, etc., are provided
in the General section.
4. In the User section, information about self (academic/medical/personal), enhanc-
ing general knowledge, tests and quiz, being in touch with classmates and other
fun-filled activities, etc., are possible.
5. Others section provides information of the college (disciplines/number of seats/
staff strength/facilities, etc.) and also helps the parents keep track of their wards™
progress in the college.


A brief description of each of the sections is given in the following:


Academics

Study Material: As the name suggests, discipline wise courseware notes designed by
subject experts, conforming to the university syllabi, is provided in this section. Last
minute revision is an added advantage. This is to help the students save valuable time,
by doing away with referring to many books for each and every topic. Subject experts
have designed the study material, after extracting information from various books/
journals/ papers, etc., so as to give the students the best possible course material.
Graphical representations, animations, 3-D models, etc., of theories, mathematical calcu-
lations, structural and functional aspects of different systems, are incorporated for better
understanding of the subjects. Procedures encouraged by the Dept. of IT “ Government
of India, like development of courseware, various teaching models, distance learning,
etc., have been incorporated here.
Oral Exams: Students face problems during Vivas. This section helps the students in
preparing for the oral examinations through the provision of subjective and objective
question bank. Students can assess their knowledge by undertaking practice and online
tests, where they can attempt to answer a set of questions. At the end, their performance
analysis (based on the topics / number of wrong answers, list of wrong answers) is given.
This facility can also help the students for competitive exam preparations.
Question Papers: University Question papers of the previous five years are available to
the students. Moreover, Model Answer Sets prepared by the Subject Experts can also
be obtained. A question bank is also maintained, which can be used by the students for
self-assessment. Solved question papers can be sent to respective subject experts
(through us) for assessment and valuable tips can be gained.
Emerging Technology: Students are kept abreast of the global emerging trends and
technologies, through this section. White papers on these latest technologies are
provided to the students. Details of projects successfully implemented by the ex-



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permission of Idea Group Inc. is prohibited.
Digital Engineering Campus 357


students at the industry level are published so as to encourage the thought processes
and motivate the students.
Video Streaming & Conferencing: These are two innovative modules being incorpo-
rated into the web-based, e-learning program. As the names suggest, the students can
not only listen to the lectures (Video Streaming), but also get in touch and interact with
(Video Conferencing) eminent lecturers, professors, distinguished persons from within
the state / other parts of the country by prior arrangements. Students are informed about
the upcoming lectures and seminars by group messages.
Forum: In this section, students place their queries related to their discipline / career,
which are answered by the Subject Experts. This is especially useful for students who
are shy and feel hesitant to get their problems tackled on a one-to-one basis. Facility to
browse the Question Archives for questions that have been asked by fellow students
and few more features are also included.


Industry

This facility offers a common meeting ground for the student community and the
industry. Here, the academic performances and other details of all the students are made
available to the industries from all over the country. Industries put up details of their
profiles for the benefit of the student community. Industries can easily tap the right
students for projects / recruitment, etc., by avoiding tedious campus interviews, placing
advertisements, etc.
Projects/summer training: In this section, companies from different disciplines display
information related to projects and summer training available in their organizations.
Students seeking Final Year Projects, Workshops and Summer Training can select the
appropriate industries and mail their resumes accordingly. This saves precious time,
which can be utilized for academics.
Placement: Various options are provided to the students, so as to help them view the
different requirements of the Industries. This facility is also an incentive for the students
to fare well and concentrate on academics. Students also do not have to run around in
search of placements and their precious time is saved. Industries also save time and
money by the omission of screening of candidates and subsequent interviews.


General

Online book store: Here the idea is to make books and Computer-Based Training (CBT)
kits available to colleges and students, not only at their doorsteps, but also at discounted
rates directly from publishers. Books required by engineering students are listed on our
portal and orders can be placed with us “ Online. Our company makes sure that the books
are door delivered at the desired address. Specific information about each book like
Subject, Title, Author, Publisher, Price, Edition, Index, etc., is made available on the web
portal. This would help the students and college librarians to select suitable books of
desired subjects. Books that are difficult to procure and those, which may not be listed
with us, can also be made available.

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permission of Idea Group Inc. is prohibited.
358 Mahajan, Umrani & Chaudhari


PG opportunities: Details of universities/colleges/disciplines/number of seats, etc.,
offering post graduation opportunities are provided here. Brief guidance is provided to
students opting for Post Graduation competitive / entrance exams as well.
News from DTE: This section provides information from the Director of Technical
Education (DTE) about the List of Universities and Colleges under them, total seats,
revisions in DTE guidelines, etc.
Contact: Through this section, students can directly contact University authorities,
College Departmental Heads, Directorate of Technical Education (DTE) or any educa-
tional officials regarding their queries related to studies or education system.


User

User Portfolio: Here the students maintain their Personal Diary, store their Medical
Profile, record Contacts in the Address Book, store their Academic Profile and Company
Profile, etc. The academic profile includes: (i) Details of the total marks sheet for all
semesters, (ii) Projects and summer training undertaken, (iii) any other relevant informa-
tion. The medical and academic profiles of all the students are made available to the
industry in a specific format.
College Katta: This is a classified section for students trying to avail and provide
information about the day-to-day happenings like Hostel accommodations, engineering
materials and tools, college activities like cultural programs, seminars, treks and picnics,
etc. It is concerned with the day-to-day happenings, where students can share informa-
tion under five different headings, namely, Travel, Classified, General, Humor and Sports.
Quiz & Contests: This section contains General / I.Q. / Aptitude tests. The quizzes have
different levels that will help students to evaluate themselves.
E-mail and Chat: Students can get in touch with their teachers, batch mates through e-
mail and chat facilities, when not in regular contact.


Others

Engineering colleges: A platform has been provided for the college to put up relevant
information. Students and their parents can procure detailed information about colleges,
with the aim of securing admissions to desired B.E. disciplines. The aim of the whole
exercise is to present authentic information about the college for the benefit of all users,
especially students and industries. Moreover, the college can reach out to students
worldwide and indirectly advertise its salient features like disciplines offered, number of
seats, hostel and laboratory facilities, staff strength, etc.
Parents: Here the parents / guardians of all students can keep a check on their wards™
performance from anywhere. Academic performance (Report Card), attendance records,
performance in extracurricular activities, etc., can be regularly monitored and remedial
action if required can be taken at the earliest. Parents/ guardians are provided unique user
names and passwords so as to access their wards™ details.



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Corporate Strategies in a Digital World 359




Chapter XVIII



Corporate Strategies
in a Digital World:
Supply Chain Management
and Customer Relationship
Management “
Development and
Integration - Focus
Purva Kansal
Panjab University, India

Keshni Anand Arora
Indian Administrative Services, India



Abstract
These days, the majority of management literature stresses the concept of “learning
organizations”, i.e., an organization™s capacity to change. However, it is not easy for
people to accept this fundamental aspect especially when it comes to the Internet and
technologies™ growing importance in business operations. They claim it™s a temporary
trend that will leave little visible change in the way business is conducted. For these
businessmen, the philosophy seems to be “keep making better products and offering
new services, and the customers will keep buying”. They ignore changes occurring in
the buying habits of customers and impact of technology. There are some businesses
who are happy to follow the leader and adopt tools like supply chain management.


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permission of Idea Group Inc. is prohibited.
360 Kansal & Arora


Supply chain management is a recognized discipline to shorten cycle times, reduce
inventories, decrease logistics costs and streamline communication process across the
business network. On the other hand are the businessmen who understand the learning
organization concept and develop a forward orientation. They are prepared to ride the
technology wave to new heights and accomplishments by using technology as a
defining element in business operations. This chapter suggests a new approach to this
new breed of entrepreneurs. In this chapter, we are trying to give supply chain
management a customer orientation and to study its results. We highlight the synergistic
advantage of linking supply chain management with customer relationship management
into a tightly knit network using technology. The main focus is on finding a solution
to deal with Internet empowered customers and to learn how to apply technologies
demanded in the new digital economy.




Introduction
The corporate strategies drawn by companies in today™s digital world have forced them
to inculcate technology in all spheres of their operations. Satisfaction in a consumer
emanates from the feeling of pleasure or disappointment resulting from comparing the
products perceived performance in relation to his/her expectations (Kotler, 1998).
Conceptually, if performance falls short of expectation, the customer is dissatisfied. If
it matches his expectations, the customer is satisfied and if it exceeds his expectations
the customer is delighted.
As put forth best by Sam Walton, this concept can be simply stated, “There is only one
boss, the customer. And he can fire everybody from the chairman on down, simply by
spending his money somewhere else” (Your Customer “ Your Boss, 2003). This has led
to the development of customer-oriented markets, i.e., “Buyers Markets.” Therefore,
successful companies these days are targeting customer delight as a tool for retaining
customers and ensuring success. The increasing use of technology in the development
and marketing of products has forced companies to turn toward customer retention as
an essential ingredient of corporate success.
Moreover, researchers have pointed out that these days retaining customers is a smart
strategy. Their work has proven that it is more economical to retain customers than to
acquire new ones. The Forum Company estimated as early as 1989 that the cost of winning
the new customer is five times as much as that of pleasing an old customer (Sellers, 1989).
On similar lines, Dr. Jason Chen (2002) stated that:
• A 60-100% company profit boost can be achieved by only 5% customer retention
efforts
• One dissatisfied customer tells eight to ten people about his experience
• Odds of selling a product to a new customer is 15 % while selling to a existing
customer is 50%
• Up to 98% of promotion coupons are thrown away


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Corporate Strategies in a Digital World 361


• Referred customers generally stay, use more products and become profitable
customers.


Quantitative analyses like these have motivated companies to understand “customer
expectations” and to find tools which would help them achieve customer delight
(Gattorna and Walters, 1996). In this paper we discuss two such tools, Customer
Relationship Management (CRM) and Supply Chain Management (SCM). The use of
technology to integrate these tools has become a focal point in many firms to gain
competitive ground.
Many companies have been using these tools profitably however in others the approach
has been centered around adopting them individually. In this paper we establish how the
singular approach managed to change the expectation set of the customers permanently.
However, with the proliferation of these technologies and tools, gaining competitive
advantage has become increasingly difficult. Thereby, it is essential for companies to
search for new tools to gain a competitive edge in the market.
We explore the feasibility of one such tool, i.e., an interactivity approach between SCM
and CRM vis-a-vis India.
India is one of the most rapidly growing economies with a distinct set of customer logics
and supply chain. Indian customers have been introduced to the concept of “customer
power” only recently with the proliferation of existing and emerging technologies and
they are coming to terms with it progressively. This rapid development has made their
expectation set very volatile. Meanwhile, there exists a three-tier distribution channel.
This leads to sharing of control between manufacturers and channel members. However,
this makes the job of offerers, i.e., targeting customer satisfaction, difficult.
In this chapter we explore the option of applying this interactivity tool to the Indian
economy.




Customer Relationship Marketing &
Supply Chain Management: Tools Used
to Satisfy Customers
Customers usually have an intuitive sense of what they want. However, these expecta-
tions are continuously influenced by variables like personal needs, past experiences,
alternatives available, promises made by manufacturers, etc. (Ziethmal and Bitner, 2003).
Companies, in an attempt to win over customers, promise them product and service
variables vis-a-vis other products. Thereby, molding the expectations of a customer.
According to the Levitt, “The new competition is not between what companies produce
in their factories, but between what they add to their factory output in form of packaging,
services, advertising, customer advice, financing, delivery arrangements, warehousing
and other things that people value” (Levitt, 1969).



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362 Kansal & Arora


Figure 1. Product variables and CRM and SCM: Relationship

DIG 1: Product Variables and CRM and SCM: Relationship.




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