It is almost as if the high-tech bubble had never burst in East Asia. While much of the industrial world rediscovers the Old Economy, here it’s still dot-com-this, e-that and tech-anything, particularly among the southern economies once known as tigers. In 2002 Hong Kong and Thailand both created new government posts that are essentially ministers of the New Economy. After Thailand’s prime minister made a big deal of ordering his cabinet to acquire Internet skills, one fiftysomething official excitedly announced that he’d learned how to send e-mail. Would-be Silicon Valleys are springing up throughout the region, from the $1.7 billion Cyberport in Hong Kong to the $5 million Greater Phuket Digital Paradise in Thailand, several mini-valleys in Vietnam, Indonesia’s Bandung High-Technology Valley and, of course, the $20 billion Malaysian mother of all these clones, the Multimedia Super Corridor. Unfortunately, all these projects are, at best, hollow replicas of the real Silicon Valley–mere real-estate developments or what one Asian analyst calls “high-technology-related sweatshops,” where cheap local labor does simple programming for foreigners. But there’s no sign that any Asian country is rethinking. A top official of Malaysia’s Super Corridor says its “greatest disappointment would be continuous skepticism and criticism from the foreign media.”
From the perspective of Asian officialdom, copying Silicon Valley is based on a clear logic of survival. True, the California original evolved by accident, centered around Stanford. It became a 40-mile-long motor of the late-’90s American “miracle economy.” The Asians acknowledged the difficulty of replicating this entrepreneurial hothouse by government fiat, but they felt they had to try. They feared falling behind not just the United States but China, which is developing so fast as an export power that it attracts an overwhelming share of all foreign investment in Asia. So vast sums were poured into high tech. “These governments have to stay with their information-technology plans if only because of all the money that’s already been spent,” says Ruben Mondejar, East Asia specialist at the City University of Hong Kong.
They also had positive models farther north in Asia. The earliest Asian Silicon Valleys emerged not long after the California original, but with much government midwifing. South Korea’s Daedeok Science Town was launched in 1973 with $4 billion, and now has 116 research centers employing 15,000 people. Daedeok helped to popularize a mobile-phone standard (CDMA), and it’s one reason Samsung is emerging as a global technology leader. In 1980 Taiwan opened the Hsinchu Science-Based Industrial Park with $600 million in funding.
The southern variants came later, and have come up way short. Malaysia launched the Multimedia Super Corridor in 1996. Japanese management guru Kenichi Ohmae originally drafted the “digital-economy master plan” for Tokyo, where he ran for governor. After he lost, Mahathir persuaded him to adapt it for Malaysia. The state-of-the-art showcase, Cyberjaya, was carved out of rubber and palm plantations. Talent was expected to graduate from the new Multimedia University, conceived as the local Stanford. Today even top Mahathir advisers like Acer’s Stan Shih worry that Malaysia’s tech talent is inadequate to fill Cyberjaya. Signs advertise future tenants like data and IT operations of HSBC bank. But these don’t represent the kind of innovation that will achieve Mahathir’s vision of “building an information society by 2020.” The projects “attract mostly assembly, manufacturing or call centers,” says Robert Broadfoot of Hong Kong’s Political and Economic Risk Consulting.
It’s very hard to carve an island of California-style entrepreneurship out of paternalistic Asian societies. The Malaysian Technopreneurs Association complains that the government has done little to advance local research and development. Association vice president Christopher Chan, CEO of the Media Shoppe, a software firm, got $500,000 from the government so easily, he worries the money is being frittered away. Some Malaysian companies are opening front offices in Cyberjaya simply to qualify for government perks.
The Asian financial crisis of 1997 drove home to many other nations the urgency of “moving up the tech ladder.” The tiger economies, from South Korea to Thailand, had been growing at a remarkable pace largely by putting more people to work at low wages manufacturing relatively simple goods–a model they could not sustain in competition with even lower wages in China. “After the crisis, there was a realization that old models were dead,” says Mondejar. Thailand began drafting its Silicon vision as the crisis peaked in 1998, calling it Phuket IT City. The next year, after Hong Kong launched Cyberport, Thailand renamed it the Phuket Cyberport and International City. Then it was called Silicon Beach, before the Greater Phuket Digital Paradise (or PhD) was settled on in 2000. So far, the project has received only $5 million and has little to show for it, other than a small program teaching teens basic computer skills.
The year after Thailand took the plunge, Vietnam did, too, opening the first of several little “Silicon Valleys.” The largest is the $100 million Hoa Lac Hi-Tech Park outside Hanoi, which was designed for industrial manufacturing and then repackaged during construction for electronics assembly and low-end programming. Its main selling point is cheap labor, but offering lower wages than even China has not been enough to endear it to investors.
None of Asia’s cloning schemes rose more sharply than Hong Kong’s Cyberport. Hatched in 1999, the development was called a “pocket-size Silicon Valley.” By clustering multinationals in one place, Cyberport would build a creative environment that would rub off on all Hong Kong. “There has been a lot of emphasis on real-estate development in the name of clustering,” says Ian Cook of the School of Politics at Australia’s Murdoch University. But “just having technology companies living in the same neighborhood” isn’t enough.
The Hong Kong government says 80 percent of Cyberport’s office space is spoken for. But many tenants are front-office operations, which do little to change Hong Kong’s identity as an office base for sales to the rest of China. Microsoft is a key tenant, but most of its Cyberport operations are in marketing, sales and administration. In the quiet Pokfulam district, where the 59-acre project lights up the skies till late evening, many residents say they wish it would just go away. But Asia has too much riding on these projects for that to happen.
