Perspectives for the Development of Information Technology in Macau
Chen Wei ji and Guo Zhensheng (Faculty of Science and Technology University of Macau)
Science and technology have made great progress throughout the twentieth century, and this has had a profound influence on the development of national economies and societies.
Among many high-technology areas, that of information technology plays a dominant role in economic development. Information technology consists of hardware technology, software technology and information services. Personal computers are the most important and popular hardware products of the in-formation industry. The importance of software technology and information services has increased greatly. The proportion of software and service sales in worldwide information industry sales as a whole increased to 55 percent in 1992.
Both Singapore and Taiwan have been very successful in developing an information industry. Both have taken it as a strategic policy to strengthen their economies. Singapore's information industry products occupied the sixth place globally by sales quantity in 1990. Such products make up the third largest export sector in Taiwan.
The Macau economy has developed very fast in the past twenty years. Macau has also been experiencing a transition from a labor-intensive to a knowledge-intensive industry. The current economic status of Macau is simi-lar to the situation in Singapore and Taiwan ten years ago. Learning from the experience of Singapore and Taiwan, and paying great attention to high-tech-nology development, in particular to the information industry, will speed up the process of Macau's economic transition.
High Technology, World Economic Development, and Social Progress
Science and technology have made great progress throughout the twentieth cen-tury. The world gross national product has increased nearly 20 times over the past 90 years. The rapid development in science and technology has had a profound influence on the development of national economies. In developed countries, the ratio of science and technology's contribution to gross national product growth was 5 percent to 20percent at the beginning of this century, increasing to 60 - 80 percent by the 1980s. The above figures imply that science and technology have become the most important ar-eas of productivity.
It is known that comprehensive national strength relies on the economy, and that science and technology are the leading factors in such strength. The success-ful economic development of Singapore, Hong Kong, Taiwan and South Korea --"Four Little Dragons of Asia" -- provide good evidence. The economy in these countries and regions has greatly improved. The Four Little Dragons have become the economic mainstay of Asia in a short time, although they are not rich in re-sources. In 1991, the per capita GNP in Hong Kong was US$ 14,102, which occu-pied eleventh place in the world, in Singapore it was US$ 13,600 (twelfth place), and in Taiwan it was US$ 8,600 (15th place). One of the important common expe-riences in these countries is that their governments have given strong support to the development of high technology.
Among many high technology areas, information technology plays a domi-nant role in economic development. Scientists predict that human society will evolve from an industrial to an information society as high technology is de-veloped. Great changes will take place in social economy in an information society, which will rely closely on high technology and in particular on infor-mation technology to produce wealth, while industrial society relied heavily on capital and machines. Labor-intensive industries will be transformed into knowledge-intensive industries with rapid development and high added value. Economic activities will be transferred from goods-producing-oriented to ser-vice-oriented. The proportion of the work force will change. The proportion of white-collar to blue-collar workers will increase. In particular, scientific and technical professionals will occupy an extremely important place. Informa-tion and knowledge will become the strategic resources of the information society.
Development of the World Information Industry
The information industry occupies a very important position in the process of national economic development, and it is a powerful weapon in economic com-petition between countries. Good use of information technology could improve the utilisation factor of resources in developing countries.
The information industry consists of hardware technology, software technol-ogy and information services. Personal computers are the most important and popular of the many hardware products in the information industry. The total global sales of computer hardware were US$ 85 billion in 1986 with PC sales ac-counting for 36 percent. Total global sales of computer hardware products were US$ 199 billion in 1991, the percentage of PC sales increasing to 52 percent. A study has predicted that PC sales will go up to US$ 172.9 billion and occupy 59 percent of the total hardware product sales of US$ 293 billion in 1996. Table 1 shows the figures obtained from the INFOCORP company.
The importance of software technology and information services has increased. An analysis of the world information technology market from 1990 to 1992 is given in Table 2, which indicates a tendency for software technology to become more and more important. The profit will mainly come from software rather than hard-ware products. The proportion of information software product sales (ISPS) to all information industry products sales increased from 49.6 percent in 1990 to 55 per-cent in 1992.
Many significant changes have taken place and will continue to take place as the information industry develops. The performance-to-cost ratio of computer hardware will continue to increase. Market competition is becoming more globalthan regional. Information technology markets have been greatly developed in the Asia-Pacific region, and the component production centre is moving towards this region, which will gradually become.the most important market and produc-tion base of information industry products. The world information products mar-ket distribution is shown in Table 3.
Development of the Information Industry in Singapore and Taiwan
1. Singapore
Singapore is one of the most successful countries in developing its informa-tion industry. It is a small country of 620.5 square kilometers with a dense popula-tion and few resources. The per capita GNP was US$ 7,000 in 1986 and reached US $13,600 in 1991. The annual growth rate of total production value in the national economy was 13.7 percent from 1960 to 1986. It has one of the highest annual growth rates in the world.
The Singapore government has chosen development of the information in-dustry as a strategic policy to strengthen the national economy. The government has provided strong support to develop the industry, an attractive environment for foreign merchants to invest in, improved communication and transport facili-ties to speed up industrial development. The government has also taken steps to promote scientific and technical development in general, such as establishing sci-entific and industrial parks, and training technical talent in various ways. The government has made a long-term plan to develop the information industry, di-vided into three phases. Phase one ran from 1980 to 1985, when the goal was to enhance the capability of government service by using information technology. Phase two ran from 1985 to 1990, when the goal was to spread the use of computer technology. Phase three runs from 1990 to 2000, and the ultimate goal will be to establish an information society in Singapore. A nation-wide computer network will be completed, and information applications in middle- and small-scale busi-ness organizations will be greatly enhanced. Singapore will be developed into an intelligent island and become one of the developed countries. National income, educational level, fundamental facilities, and the quality of life will reach advanced world levels.
Singapore achieved a great step forward after completion of the two phases in 1990. Computer and information technology were widely used in the country by about 70 percent of companies. Singapore's information industry has reached an advanced world level; its products occupied sixth place globally by sales in 1990. Peripheral hardware products are an important part of the information indus-try, and disk production in Singapore occupied first place in the world in 1990. Sin-gapore is now one of the Asian countries with an advanced information industry.
2. Taiwan
Taiwan's economy has developed very fast over the past forty years, with an annual growth rate of 8.9 percent. The per capita GNP reached US$ 8,600 in 1990, and will reach US$ 14,000 and twentieth place in the world by 1996. In order to realize these goals, the government made plans to develop technology in eight areas, including computer software technology. It also plans to develop ten high technology areas, including information technology.
The first ten years' planning for the information industry ran from 1981 to 1990. The industry had been taken as a key strategic industry. The government promoted the development of the information industry and pushed business or-ganisations and all government departments to use computers. Information ap-plication software packages and service products were developed very fast. The production value of software and services reached US$ 0.62 billion in 1990, about 3 percent of global information products.
The second ten-year plan runs from 1991 to 2000, and will enhance informa-tion applications. The final goal will be to make the information industry Taiwan's largest, occuping fifth place in the world.
According to predictions made in 1993, gross products of the information in-dustry will increase to US$ 10.6 billion. The annual growth rate will be about 12.4 percent. Hardware products will reach US$ 8.9 billion and the annual growth rate will be 11.1 percent. Information service sales will reach US$ 1.25 billion and the annual growth rate will be 11.1 percent. Related communication products will reach US$ 0.45 billion and the annual growth rate will be 15 percent.
Perspectives for Developing High Technology in Macau
Macau's economy has developed very fast in the past twenty years. The an-nual economic growth rate reached 16.7 percent from 1971 to 1981, according to OECD statistics. The per capita GNP was US$ 9,683 in 1989, increased to US$ 11,336 (14th place in the world) in 1991, and was US$ 13,527 in 1992.
The technology and social progress contribution factor to the industry growth factors was 48 percent in Macau in the 1980s according to the analysis. Macau has also been facing a transition from labour-intensive to knowledge-intensive indus-try. The current economic status is similar to the situation in Singapore and Tai-wan ten years ago. Learning from the experience of Singapore and Taiwan and paying great attention to the development of high technology, in particular the information industry, will speed up the process of Macau's economic transition.
Macau has many advantages in developing its information industry:
1. A good investment environment: Macau is included in the favoured re-gions for investment partnerships by the European Community. Macau-made ex-ports to Europe will receive preference, which is not possible for Hong Kong. Macau can obtain interest-free loans and financial support for joint investments with EC countries in the local high-technology industry.
Macau is a low tax area, where the maximum rate is 15 percent of net profit. Low interest loans (4 percent) may be provided by the government for invest-ments in high technology. Import of materials is tax-free, and there is no profit tax for five years.
2. Advanced infrastructure facilities: Macau will have advanced facilities in power systems, in communications, and in transport systems to support the de-velopment of high technology. The international airport, the oil terminal, the Ka-Ho container port, the new bridge between Macau and Taipa, the Macau world trade centre, the railway to Guangzhou and many other facilities will be com-pleted in the near future.
3. Developed information industry: Computers and information technologies have been widely used in Macau. There were more than 30 computer companies in Macau in 1990. They sell computer hardware made in Hong Kong, Taiwan, Brit-ain, the USA and Japan. In recent years, some computer companies have begun to transfer their business towards developing the software market for government departments, industry and commerce.
4. Good international cooperation: A Macau European information centre was set up in 1992 and is the only centre in the region to provide information from the European Community.
5. Growing information talent: The University of Macau and Macau Polytechnic Institute offer several majors related to information technology. About 80 students graduate in computer software and information management each year. There will also be some MSc degree students graduating from UM each year. Developing the information industry for local and export needs is a valuable resource for Macau. Talent in the information industry is also trained by the Software Institute of the United Nations University, and by the Asia International Open University.
6. Cooperation with China: Such cooperation, especially with neighbouring areas of the mainland, will help the development of high technology in Macau. Zhuhai, Zhongshan and many other areas are considering making investments in Macau. China can provide some technical support to high technology develop-ment, and also has many experienced and qualified professionals in the area whose costs are only 1/3 to 1/5 of those in Taiwan.
7. Macau is planning to establish high technology parks and a transfer centrefor productivity and technology to promote the industrial transition. The first park will occupy an area of 33 hectares, and will be in operation before 1995. The second will occupy 6.67 hectares, and its purpose will be to attract investment, talent and high technology from China. The transfer centre for productivity and technology will be established by the government to promote Macau's industrial transfer.
Macau has some advantages but still needs to develop its information indus-try. To promote information applications in organisations, in government depart-ments and manufacturing concerns will greatly improve service quality. Adapt-ing information technology to control production lines and production manage-ment will increase productivity, improve product quality, and increase competi-tive ability in the international market. Such development will speed up indus-trial transition and social progress.
The contribution of science and technology in Macau is not high compared with developed countries, though the GNP is. Macau is small and not rich in re-sources, and local market requirements are limited. The information industry is a high-technology area suitable for Macau to develop. The investment needed to develop an information industry is smaller than some large-scale manufacturing industries, and the pay-back period will be shorter. It is also easier to develop an export market in the information industry. There is a great demand for software engineering professionals to develop software applications, and the human re-source costs in software engineering are very high in some developed countries. There are many centres in Asia that can develop software for export purposes. There is also a great demand for hardware products in developing countries. So establishing joint ventures to manufacture hardware products and to develop ap-plication software products for export might be realistic options in developing high technology in Macau.
In order to speed up and finally complete industrial transition in Macau, many important issues must be faced. We must realize the importance and the urgency of developing the information industry. A general plan for developing the indus-try must be set up first. Among many key issues, the most important one is strong support for high technology provided by the government. It is suggested that the government should increase investment in economic development, especially in high technology; that the government should take steps to improve the invest-ment environment to encourage local and foreign investment as soon as possible; that the government should seek to improve the general educational standard of the population; and that the government should accord the development of high technology and information industry parks the highest priority.
In this way, we believe the information industry in Macau can look forward to a brilliant future.
Referemces
Chen，Wei ji.“The Effect of High Technology on Economic Development-The Perspective on Exchange of Macau and Taiwan.”Paper presented to theconference on Taiwan -- Macau Relationship: Future Prospects, Taipei, July.
Huang, Tai Yang. 1993. "Development Trend of Information Industry in the World." Information and Computer Journal (Taipei).
Huang, Han Qiang. 1991. "Macau Economy: Today's Development and Fu-ture," unpublished manuscript.
Li, Wei. 1991. "Transfer to Information Society." Information and Computer Journal.
Liao, Ru Long. 1991. "Information and Technology Applications -- Study of Singapore's Competition Dominant." Information and Computer Journal.
Yeung, Eric. 1992. "Macau's Industrial Sector -- Is There a Future?" paper presented to the International Conference on Cooperation and Regional Develop-ment in the Pearl River Delta, Macau.
Zhang, Qiren. 1992. "Developing Situation for Worldwide High-New Technology." System Engineering, (China), vol. 11, no. 1.
