Companies, Countries Woo Each Other By the Bay

Companies, Countries Woo Each Other By the Bay

By Neil Munro
Staff Writer

SAN FRANCISCO - U.S. industry leaders threatened Asian governments with everlasting poverty unless they buy more high-tech products, and in response, Asian politicians at a conference here promised ever more generous conditions for foreign investors.

"Investment in information technology is not a luxury in a world like this. It is nothing short of a competitive necessity," said Andy Grove, chairman and chief executive officer of chipmaker Intel Corp., Santa Clara, Calif.

"Regions that don't [invest will see] growing, growing, growing divergence" with higher-tech countries such as the United States, warned Grove, who was the first to speak to the audience of several hundred Asian government officials, industry executives and journalists attending the Nov. 19-21 Asia-Pacific Information Technology Summit.

Adequate investment levels, Grove said during a press conference at the Fairmont Hotel atop Nob Hill, would be anywhere between 1.5 percent and 2 percent of each nation's gross national product.

Grove built his blatant pitch around three giant video screens and three staged conversations with an online teacher, a keyboard vendor in Taiwan and a salesman offering a high-tech telemedicine kit.

The telemedicine kit, which includes a laptop and a wireless link, was used to show how doctors or nurses in developing countries could dial up an American doctor for advice on how to treat an injured ankle. To some observers, this may seem out of place for countries that are struggling to build up local phone networks or get their citizens into a local school. The estimated price of the telemedicine kit is at least $4,000, plus monthly wireless bills and annual maintenance costs.

Court Mast photo Larry Ellison, president of Oracle Corp.

However, Ellison declined to name the NC's greatest weakness: its dependence on a powerful and reliable communications network that does not even exist in the United States.

During their turn on the 100-foot stage, complete with wall-sized displays and music videos that sang "Things Are Getting Better," Asian politicians pitched their countries as great sites for U.S. high-tech investment.

"We will participate enthusiastically. ... We are anxious to form partnerships with leaders like you," said Cesar Bautista, secretary of trade and industry for the Philippines.

In Indonesia, "the government is giving high priority to the development of information technology," said Tunky Ariwibowo, Indonesia's minister for industry and trade.

To promote online commerce, "the private sector should enjoy freedoms to the maximum possible level," said Katsuhiro Nakagawa, a vice minister for Japan's Ministry of International Trade and Investment, which is spending $300 million over several years to test a variety of digital commerce technologies.

But government won't just be a customer, it also will help set standards for high-tech work throughout the region, said government and industry officials. "A consensus is developing that some mechanisms are needed for standards and security," said Taiwan's vice minister for economic affairs, Yi-Fu Lin. Moreover, Asian countries should jointly develop compatibility standards, argued Pak Chae-Ha, president of Kumbo Telecom, South Korea.

And some of that government regulation may be intended to shield Asian politics from foreign news reports or to protect Asian economies from the more advanced U.S. and Japanese counterparts, some industry and government officials said. Already, China, Singapore and Vietnam have imposed controls on Internet content, while China, Japan and other countries have established a thicket of formal and informal trade barriers - such as unique technology standards or restrictive sales regulations - that have tangled many U.S. firms.

Perhaps out of politeness, perhaps because the high-stakes issues won't be resolved over a cup of coffee or tea at the Fairmont Hotel, these and other sensitive issues were ignored by speakers at the conference.

However, any talk of regulation - even if it is intended to harmonize a multitude of rival technologies - raises a red flag for U.S. officials and executives, forever alert for signs of impending regulation.

"If there are countries that want to close their markets ... it is a mistake for them and their people," said Ira Magaziner, a senior adviser to President Clinton and informal ambassador-at-large to the high-tech set.

The threat is Balkanization, argued one U.S. executive, while Charlene Barshefsky, the United States' chief trade negotiator, promised to strangle regulatory proposals before they encrust the fast-growing information technology industry.