HIGHLIGHTS
e-Business – Asean
Piecing together a Chinese software giant
Hong Kong-based chinadotcom, considered a "pioneer of China’s Internet," is reinventing itself as a provider of enterprise software to Chinese manufacturers. The company rose to prominence as a major player in the Chinese Internet portal market, but has now embarked on a series of acquisitions and partnership agreements in the USA, Canada and India to beef up its presence in the enterprise software market. Also on tap: plans to turn the company into a "software outsourcing shop." While most tech analysts are bullish on the company’s prospects, the article points out that chinadotcom "will face plenty of competition" from enterprise software rivals in China such as SAP and Oracle.
Source; Business Week, May 2004
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Business – Technology
Sun Microsystems opens smart-tag plant
Sun Microsystems plans to open a 17,000-square-foot RFID test facility in Dallas as part of a strategy to help manufacturers meet a January 2005 deadline imposed by Wal-Mart for using RFID tags. According to Sun, Wal-Mart suppliers will be able to load pallets of actual products in their original packaging and "run them through mock-ups of loading docks," enabling them to test whether RFID-tagged products can be read by Wal-Mart systems. Three other tech firms - Nortel Networks, Texas Instruments and i2 - will join Sun Microsystems in the RFID initiative. If all goes according to plan, Sun will open a similar RFID facility in Scotland by the end of the summer.
Source; AP, May 2004
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Business – Corporate
SCO cuts jobs to reach product profit
In an effort to restore its core business to profitability by the end of July, the SCO Group has made an across-the-board reduction in its workforce. The company did disclose the exact size of the layoffs, noting only that less than 10% of the workforce would be affected. SCO also noted that the move to shore up financial performance was not the result of pressure applied by BayStar Capital, which earlier threatened to pull its $20 million investment. In its most recent quarter, SCO posted a net loss of $2.25 million on revenue of $11.4 million.
Source; News.com, May 2004
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Internet – Entertainment
Sony launches online music service
Sony Connect, the latest entrant in the increasingly crowded digital music market, will offer more than 500,000 songs from artists on major and independent labels at the standard price of 99 cents each. In addition, Sony Connect will offer full album downloads starting at $9.99. Sony - like its competitor Apple iTunes - hopes that its online music service will lead to additional sales of its audio devices. But, as critics point out, the company’s late start in the market may be difficult or impossible to overcome: "They're behind the curve already and they have to play catch-up on two fronts, on selling their audio players and getting people to use their music service. There's roughly three to four million people that have already placed that bet."
Source; AP, May 2004
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Internet – Business
E-biz strikes again!
The disruptive power of the Internet means, "big companies are again under assault" in a number of very different industries. As during the late 1990s, the Internet is "threatening to force down the prices charged by traditional players, squeeze their margins, and even put some out of business. New technology, new ways of doing business and new approaches to cutting out the middleman mean the old pricing power is collapsing in a series of industries…" Business Week trains its eye on six industries that are about to be disrupted: jewelry, bill payments, telecom, hotels, real estate, and software. While nobody is claiming that this is "1996 redux," the fact remains that the online players that survived the brutal Internet shakeout are stronger, savvier and leaner than their boomtown brethren.
Source; Business Week, May 2004
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e-Activities – Internet
Blogs counter political plottings
Political activists are embracing the power of the Web – especially online community networks and blogs - in order to "re-engage people" in grass-roots political movements, according to panelists at a recent journalism conference at UC-Berkeley. According to one social networking expert at the conference, the Howard Dean campaign has been a key catalyst: "We'll look back and see (the Howard Dean presidential campaign) as the beginning of the change." The key, say political activists, is to understand the "traditional ways campaign work" - and then use new Internet-based tools to counteract these tactics. Included: a few tips for motivating blog audiences and re-energizing social networks.
Source; Wired News, May 2004
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FOCUS
Telecommunications – Canada
Canada's phone giants face Internet threat
Examines the impact the emergence of VoIP service geared is having on the Canadian communications industry and the regulations that govern it. At issue is the same debate that rages in the U.S.: whether VoIP service will be taxed or regulated at all. The article notes that the Canadian Radio-Television and Telecommunications Commission (CRTC) recently began a review of existing regulations as well as relays the comments of some of Canada's fixed-line providers who say existing rules discriminate against them. The CEO of Bell Canada Enterprises, for instance, said in recent remarks that regulators must recognize that "once-separate industries have become one common industry, that needs common public policy treatment."
Source; New York Times, May 2004
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Government – India
Pension contest looms in India
Government plans to open up retirement-investment market
New Delhi - Sanjay Sachdev visited six Indian ministries over eight years to push for an overhaul of the country's pension system. He says it was time well spent.
"India has the potential to be one of the largest pension markets in the world," said Sachdev, managing director of Principal Mutual Fund, the Indian subsidiary of Principal Financial Group, the biggest provider of retirement plans to U.S. companies.
After more than a decade of debate, the Indian government this year plans to license private fund managers to invest the savings of India's 400 million public and private workers - about 90 percent of whom have no retirement security, according to a government-commissioned report.
Principal, ING Groep, Merrill Lynch, Aviva and about 20 other asset managers are vying for access to a market that India's Finance Ministry forecasts will be worth $100 billion within a decade. The number of licenses has not been decided.
"The pension business in India has the potential to grow up to $350 billion during the lifetime of a generation," said Yvo Metzelaar, managing director and chief executive of the Bangalore- based ING Vysya Life Insurance, a subsidiary of the largest Dutch financial services company. "Pensions have become a top priority for us."
Metzelaar has concerns, too.
India has no social benefits system and most workers earn less than $1,000 a year, meaning they will struggle to build pension assets.
"The presence of a social security system in India is very important for a thriving pension system," Metzelaar said. "A social security system provided by the government will cover the basic minimum level of pensions these people need."
The pension process is unlikely to be straightforward in any case. Last year, the Indian government set up an interim Pension Fund Regulatory and Development Authority to frame rules that will be enforced by a new, independent authority. Parliament must still approve that new watchdog - a move that is on hold until after a five-phase general election ends on Monday.
License applicants may face further delays because the current pension plan does not provide any government guarantee, said Mukesh Anand, an economist at the New Delhi-based National Institute of Public Finance and Policy.
The Finance Ministry says details about the number of pension licenses, the method by which they will be awarded and rules governing both funds and contributors will be published by the end of the year.
License holders then must overcome the challenges of distribution in a country with 1 billion people.
Uncertainties have not cooled the enthusiasm of companies. Indians, about half of whom are under 25, deposit $78 billion a year into fixed and savings accounts in commercial banks, according to a government survey. Their savings make up 14 percent of the economy.
"The challenge is to channel these savings into long-term investments to finance infrastructure that India needs," said Sachdev at Principal. "That's where pension fund companies come in."
HSBC Holdings, ABN AMRO Holding and Deutsche Bank are among banks to set up asset management companies during the past three years in anticipation of pension reform.
Insurers such as American International Group, the Munich-based Allianz and Standard Life Assurance, based in Edinburgh, Scotland, have established joint ventures with Indian partners in line with a rule limiting foreign investment for insurers to 26 percent.
"When we entered the insurance business in India, the understanding was that the pensions market would also be opened up," said Stuart Purdy, chief executive of the New Delhi-based Aviva Life Insurance, a subsidiary of Aviva, Britain's largest insurer by premiums.
Aviva, which started selling Indians life insurance in 2002, will apply for a pension license. "It's such an under-provisioned market and the savings rate is huge," Purdy said.
The prize license will cover India's 3.2 million federal government workers. Since Jan. 1, about 50,000 new employees a year have had to contribute 10 percent of their wages to a fund still to be set up.
The government is matching that contribution, with all funds held by India's controller-general of accounts until licenses are awarded.
Previously, the government paid all contributions for its current workers and 7 million retirees, or their surviving dependents, from its revenue. Its pension bill quadrupled to $3.5 billion in the decade to March 31, 2003, Finance Ministry figures show, or 3.2 percent of total spending.
"Reforms are overdue - people are living longer and they need security," said K. C. Mishra, director of the National Insurance Institute. "The government's own pensions bill is becoming unmanageable."
Whoever wins the government-fund license also will have access to voluntary contributions by about 350 million self-employed workers and seasonal contractors, from rickshaw drivers to doctors.
Workers in India's 28 state governments and its state-run companies, such as Indian Railways, the world's biggest employer with 1.5 million workers, are expected to join as well.
"The numbers will grow," said Mukul Asher, a public policy professor at the National University of Singapore who advised the Indian government on pension changes. "Overseas investors are right to get excited."
Source; Bloomberg News, May 2004
Write; Cherian Thomas
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POLICY NEWS
e-Democracy – Political
Electronic voting still in infancy, critics say
The Election Assistance Commission established by Congress to guide the transition to electronic voting is having its first meeting today. With only six months until the presidential election, no policy is in place to govern the development and supervision of e-voting machines, reports the piece, and "the federal research intended as the basis of the standards has not been financed, much less begun." Most pressing is the widespread desire for e-voting machines to leave a paper trail due to security concerns. Doug Chapin of www.electionline.org: "If you think of election problems as being like a forest fire, the woods aren't any drier than they were in 2000, but more people have matches."
Source; Washington Post. May 2004
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Internet – Intellectual propriety
Report: Other nations doing more to combat piracy
The Office of the U.S. Trade Representative (USTR) Monday released the Special 301 report, its annual report on intellectual property rights, praising countries like Poland and the Phillipines for passing anti-piracy legislation. The article reports that the European Union made USTR's "Priority Watch List" for countries or unions slacking on intellectual property protection or enforcement. According to the International Intellectual Property Alliance, the U.S. economy lost ""about $10 billion to intellectual property theft in the 52 nations listed in the report in 2003, not including Internet piracy."
Source; InfoWorld, May 2004
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BioTech – Research
Sea of dreams
A good overview of the growing field of industrial biotechnology with discussion of the efforts of Craig Venter's Institute for Biological Energy Alternatives and companies such as Diversa that are prospecting for genes that could be used in chemical and industrial processes. The article says the industry's in its "infant" stage but is "rapidly developing" as researchers search for ways in which to make "useful chemicals via genetically modified organisms." As an example the piece presents the case of Diversa and its search for genes that can be exploited for such purposes in locales such as hot springs, ocean beds, and the Arctic tundra. A prediction worth noting: McKinsey says that about 5% (by value) of the world's chemical output is bioetch-based, a number that's expected to grow to 10% over the next six years.
Source; The Economist, May 2004
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DIGITAL DIVIDE
Humanitarian - Korea
Korea crash stirs South's hearts, hopes
South Korea, Seoul - The images of the burned faces of semiconscious children have tugged at South Koreans' deepest sensitivities, as well as their purse strings, following the North Korean train explosion that killed at least 169 people and injured more than 1,300 others.
Source; The Christian Science Monitor, May 2004
Write; by Donald Kirk
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