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usiness leader of the month: Peter CohAnGermanyStrengthensBusiness Tieswith Asiaasia-pacificAeroIndia2011China Leadingthe Asian Pushinto GreenTechnologywww.biztechreport.comVol. 3, No. 4, 2011W6,000£7.00€8.50US$9.99CN$9.99India’sGrowingDefenseIndustryreportBuildingBroadbandfor a BetterMobile WorldIs AsiaReadyforM-Banking?OnlineShoppingMalls inKoreaPOSCO gets green light to operate in IndiaShanghai Airports: Serving Bustling, Dynamic CityHi-Tech Adds Glitz, Glamour to Movie ProductionAsian Mobile Cloud Services Emerging in 2011Peking Univ. to Become World Center of LearningW6,000 | £7.00 | €8.50US$9.99 | CN$9.99

asia-pacificreportContents Vol.3, No. 4, 2011Q a&Cover StoryBuilding Broadbandfor a Better Worldpage 8business l e a d e ro f t h e m o n t hpeter cohan — pa g e 12joseph baladi — pa g e 49development10 Millennium Development Goalsfor the Asia-Pacific Region— Combating HungerBy yashika dhingra29 Enterprise IT Spendingin Asia-Pacific to Grow in 2011By kevin liuCover Image courtesy of: Vkoletic | Dreamstime.com30 Riding the Asian Tablet BandwagonBy Ding dingPublisher: Lee Deuk Ho31 60& Growth in LaptopEditor-in-Chief: Lee Deuk HoDemand Seen in GujaratPublished by: Asia-Pacific BusinessBusinessBy reena saxena& Technology Report Co.14 Shanghai Airports:32 Is Asia Ready for M-Banking?Registration date: 2009.09.03Serving a Bustling and Dynamic CityBy reena saxenaRegistration number: 서올중. 라00307By kevin liu34 Asian Mobile Cloud ServicesPrice: W6,000, US$9.99, CN$9.99, £7.00, €8.50 15 Eastern Germany StrengthensEmerging in 2011Annual subscription fee: W110,000/US$110Business Ties with AsiaBy vijay asthanaBy anurag agnihotriManaging Editor:35 Nokia-Microsoft Deal:15 China’s Stranglehold on Rare EarthMr. Son-U Michael PaikInnovation in the OffingOres — The RepercussionsBy rajani baburajanChief Consultants:By rashmi gupta36 Mobile Apps HeatDr. Lakhvinder Singh16 Online Shopping Malls in Korea— A Rising Trend of TodayChief Business Development Officer:By nicolas leeBy jai c.s.Kim Cheol Ho17 Journey of Online Shopping37 Nvidia Says Chinese May Havein Asia-PacificFastest SupercomputerEditorial Advisory Board:By meenakshi krishanBy anuradha shuklaMr. Suresh P Prabhu18 Korea’s POSCO Gets Green LightFormer Union Cabinet Minister for Power,to Operate in Orissa, IndiahealthGovernment of IndiaBy anshu shrivastava38 Diagnostic Opportunities in HealthMr. N K GoyalSector, Growth Strategies for 2011-12President, Communications & ManufacturinggreenAssociation of India, CMAIBy priyanka sharma20 China Leading the Asian Push39 Chinese Herbal Cigarettes:Dr. Mezyad Alterkawiinto Green TechnologySame Tobacco in New Packaging?Associate Professor, King Saud UniversityBy lynette wuBy vinti vaidDr. Emanuel Yi Pastreich21 Electronic Trade Green EffectDirector, The Asia InstituteBy amanda min chung hantechnology22 The Greatest Challenge for theMr. Jungsoo Jang40 Aero India 2011:Pacific Islands — Climate ChangeA Grandiose Show of Air PowerPresident, Korea Future InstituteBy vinti vaidBy shamila janakiramanMr. Michael Breen42 India’s Growing Defense IndustryInsight Communications ConsultantsITBy anshu shrivastavaDr. donald kirk24 Holding Back the Ocean44 Growth of Home AutomationAuthor and JournalistBy matthew weigandIndustry in Asia-Pacific26 Indian IT Sector BackBy shamila janakiramanTo contact Asia Pacific Business andon Growth Path46 Hi-Tech Adds Glitz and GlamourTechnology Report for advertising,By vibhu saxenato Movie Productionsubmissions, subscriptions or27 Smart Grid: Challengesgeneral comments please email toBy shamila janakiramanand Opportunitiescontact@biztechreport.comBy rajani baburajaneducationThe views and opinions expressed in the articles are those28 Top Tech Spending48 Peking Univ. to Becomeof the author and do not in any way reflect the editorialPriorities in AsiaWorld Center of Learningpolicy of Asia Pacific Business and Technology ReportBy anuradha shuklaBy vinti vaidVol. 3, No. 4, 2011new & notable: shadows & trolls — pa g e 50PRINTED IN SOUTH KOREA

companies covered in this IssuecompanyAccentureAegis Infoware Pvt LtdAlcatel-LucentAmbient CorporationAppleAT&TChaori SolarCJ EntertainmentFiOS• Is Asia Ready for M-Banking?article(S)• 60% Growth in Laptop Demand Seen in Gujarat• Building Broadband for a Better World• Smart Grid: Challenges and Opportunities• Nokia-Microsoft Deal: Innovation in the Offing• Smart Grid: Challenges and Opportunities• China Leading the Asian Push into Green Technology• Hi-Tech Adds Glitz and Glamour to Movie Production• Smart Grid: Challenges and OpportunitiesGartner • Enterprise IT Spending in Asia Pacific to Grow in 2011GEGoogleGSMA• Smart Grid: Challenges and Opportunities• Nokia-Microsoft Deal: Innovation in the Offing• Building Broadband for a Better WorldIBM • Asian Mobile Cloud Services Emerging in 2011Intel CorporationKPMGInfosys Technologies LtdLGNasscom• Nvidia Says Chinese May Have Fastest Supercomputer• Is Asia Ready for M-Banking?• Indian IT Sector Back on Growth Path• Building Broadband for a Better World• Indian IT Sector Back on Growth PathOzone Media • Asian Mobile Cloud Services Emerging in 2011QualcommRIMSamsungT-Joy CinemasVerizonYahoo• Building Broadband for a Better World• Nokia-Microsoft Deal: Innovation in the Offing• Building Broadband for a Better World• Hi-Tech Adds Glitz and Glamour to Movie Production• Building Broadband for a Better World;• Smart Grid: Challenges and Opportunities• Nokia-Microsoft Deal: Innovation in the Offingasia-pacificreport

coverstoryBuildingBroadbandfor a BetterMobile Worldby Rajani BaburajanThe recently concluded Mobile WorldCongress in Barcelona gave strongindications about the future of thetelecom sector.In the coming years, telecom focus will be shifted towards theapplication side and operators will be deploying mobile broadbandtechnologies to offer innovative services. Consumers will be enjoyingmobile advertising, in banking, in health, publishing and television,among other things. The trend indicates the future will be theworld of tablets. However, the success of tablets will depend on theavailability of high-end video content.Long term evolution (LTE) / 4GThe new mobile trend, as evident from the Mobile World Congress,indicates that LTE / 4G investments will go up in the comingyears. Mobile broadband will fuel the growth of applications anddevices, while LTE / 4G consumers will be attracted by multi-playergaming and live video.2011 is also set to be the tipping point for LTE, with networkdeployments in 24 countries and the commercial availability of thefirst LTE-based smartphones and tablets driving more than four millionconnections.Verizon Wireless and Alcatel-LucentBig equipment vendors and operators are fine-tuning their strategiesto offer innovative services to consumers. Verizon Wirelessand Alcatel-Lucent demonstrated a new development in this linewith their interactive multi-player gaming and live video conferencingbetween Barcelona and a moving 4G LTE-enabled vehicle in theUnited States.According to Brian Higgins, executive director at LTE EcosystemDevelopment at Verizon Wireless, “LTE is here, and Verizon Wirelessis delivering end-user experiences that are changing the way welive, play and work.”The figure tells it allHSPA Mobile Broadband connections grew by 100% year-on-year,crossing 400 million globally. The industry adds 17 million HSPAconnections each month, compared to nearly 9 million a month inthe same period last year, according to GSMA.LTE will grow from 4.2 million in 24 countries by the end of 2011,to 300 million connections in 55 countries by 2015. LTE will experiencesignificant growth from 2012, when operators start launchingtheir Voice over LTE (VoLTE) services.Over the past 12 months, operators have invested more than $70billion in mobile broadband infrastructure and network upgrades,driving momentum for HSPA and paving the way for LTE.8 | A-P BUSINESS & TECHNOLOGY REPORTLiuliming Liu | Dreamstime.comWhat srives the semand?According to GSMA, the mobile broadband growth is fuelled bydemand for new devices, applications and services. Mobile broadbandwill offer socio-economic benefits, especially in countrieslacking fixed-line broadband infrastructure. The huge investmentsin developing nations will empower education, improve health services,increase trade and drive innovation.LTE is expected to out-perform fixed-line broadband networksby delivering fast, highly responsive connectivity with peak ratespeeds of up to 100Mbps. However, the industry is still debatingwhether consumers in developing countries need such speeds forbroadband connectivity. Most of the developing nations are focusingon achieving 100% mobile penetration, and broadband may notbe a priority for them.Spectrum debacleLack of spectrum is a major roadblock affecting developing nationsin their path towards LTE. GSMA warned that governmentsshould ensure that suitable spectrum is made available for LTE rollouts.If the governments can release LTE spectrum now, it will allowLTE to generate economies of scale, bringing down the cost ofequipment and handsets. This will help consumers gain access tobetter broadband connectivity.The spectrum best suited for LTE includes the 2.5-2.6 GHz band,which has been identified globally by the ITU as the ‘3G extensionband’, and ‘digital dividend’ spectrum in the 700-800 MHz band,which has been freed up from the switchover to digital television,according to GSMA.Since LTE spectrum is not available, many operators will useHSPA as their primary mobile broadband technology. 341 live HSPAnetworks across 132 countries have more than 2,900 devices from200 suppliers worldwide.The Asian shiftIt seems the global recession did not affect many telecom serviceproviders in Asia. Most of them have continued to expand theirgeographical reach during the slowdown. The appetite was evidentwhen SK Telecom, the number one mobile operator in Korea, announcedthat it will triple its broadband capacity and offer fivetimes faster data download and seven times faster upload speedsfrom July 2011.The Korean operator has partnered with Nokia Siemens Networksto provide LTE infrastructure. SK Telecom will use Nokia Siemens’Flexi Multiradio Base Stations and the NetAct network managementsystem as well as implementation and care services.LTE is making inroads into several Asian countries following itsearlier trials in Europe. Speed is one of the major demands of users.SK Telecom will introduce LTE services in Seoul in July 2011. SKTelecom will expand its LTE network coverage to other metropolitanareas by the end of 2012. Nationwide coverage is expected bythe end of 2013.Mobile broadband will offersocio-economic benefits, especiallyin countries lacking fixed-linebroadband infrastructure. The hugeinvestments in developing nationswill empower education, improvehealth services, increase tradeand drive innovation.Asia is also becoming a major destinationfor operators’ subscriber additions. TheTelenor Group announced that it has passedmore than 100 million subscribers in Asia.This milestone marks another significantachievement in Telenor Group’s successfulhistory in the region.“With more than 100 million subscribersin Asia, Telenor Group continues to developand reinforce its position as a leading pan-Asian provider of telecommunication services.This position is based on a long-termindustrial commitment, a strong customerfocus and a fundamental belief that the mobilephone would benefit emerging economiesas a vital tool in improving quality oflife in the region,” said Sigve Brekke, executivevice president of Telenor Group, andhead of Telenor Group’s Asian Operations.With the two fastest-growing telecommarkets in the world – India and China– the Asian continent is attracting big operatorsworldwide. Telenor Group enteredAsia in 1996, and has since emerged as aleading regional mobile operator. At theend of 2010, Telenor Group’s five Asianoperations were generating 39% of thegroup’s total revenues and obtained anoperating cash flow above NOK 10 billion.In subscriber growth Telenor Group addedmore than 23 million subscribers in Asiain 2010.Today Telenor Group controls mobile operationsin 5 Asian markets with Grameenphonein Bangladesh, Uninor in India, dtacin Thailand, DiGi in Malaysia and Telenorin Pakistan. For almost 15 years Telenor hasbeen driving service innovation and customerexperience in the mobile sector inAsia. Telenor Group’s unique segmentationand distribution platforms have become acompetitive advantage, enabling its localoperations to connect millions of previouslyunconnected people with basic mobilephone services.Innovation thrustInnovation was at its peak at the MobileWorld Congress. The event provided a platformfor leading vendors to come out withinnovative technologies. Semiconductormajor Freescale unveiled the QorIQ Converge,which is a highly integrated basestation-on-chip portfolio built on advancedheterogeneous multicore technology,which can support all wireless telecom services.QorIQ Converge is the first ComprehensivePortfolio of Multimode Solutions, whichwill support voice centric to data telecomservices (including 4G). QorIQ Converge willenable higher performance, lower cost, andimproved power efficiency.As a result of QorIQ Converge, small cellsites will help bolster the mobile broadbandnetwork. These sites will feature equipmentsmall enough to be deployed anywhere easily.Freescale’s system-on-chip (SoC) supportsanywhere between 8 and 64 multimode(WCDMA, LTE) users depending on theconfiguration, while innovative QorIQ Qonvergeplatform provides integration, performance,energy efficiency and unmatchedscalability.Alcatel-Lucent’s small cellsAlcatel-Lucent introduced its 3G smallcells approach for indoor and outdoorhigh-traffic areas such as shopping malls,airports and railway stations, and the secondgeneration of its 9362 Enterprise Cell.Alcatel-Lucent also unveiled its concept forthe 9361 Home Cell X-Series. As per the newconcept, the compact range of USB-poweredsmall cells will deliver high-capacity dataand crystal-clear voice for up to eight userssimultaneously.The company’s ongoing small cells innovationsare crucial to the creation of thisnew, more powerful mobile network architecture– bringing major coverage, capacityand services benefits to service providersand subscribers alike.Alcatel-Lucent’s 9363 and 9364 MetroCells extend 3G wireless coverage and capacityto high-traffic public spaces, indoorsand outdoors. These Metro Cells will functionin shopping malls, hotel lobbies orairports, and open up the networking possibilitiesin remote locations.The plug-and-play and self-organizingnetworks (SON) capabilities combine withmacro-like, real-time management enableoperators for easy deployment and control.Operational expenses for operators will beunder control. Service providers can usethese Metro Cells to offer outstanding performancein public spaces, at a lower operationalexpense.coverstoryQualcomm’s FlashLinqQualcomm, one of the major telecominnovators in the world, demonstrated itslatest advancement in peer-to-peer wirelesstechnology. Qualcomm’s technologyinnovation – FlashLinq – will allow devicesto discover each other automatically. Theinnovation enables mobile devices to communicate,peer-to-peer, at high broadbandspeeds and without any intermediary infrastructure.FlashLinq advances proximal communications.The enhancement allows mobileconsumers to connect, disconnect andcommunicate directly with other mobileusers at broadband speeds. The innovativetechnology is expected to complement traditionalcellular-based services and serve asa scalable platform for new types of applications.“By expanding the operator model ofmanaged services to the frontier of proximalcommunications, Qualcomm continuesto demonstrate its leadership in wirelesstechnology and innovation,” said Ed Knapp,senior vice president of business developmentand engineering for Qualcomm.VoLTE from EricssonWith the Voice over LTE (VoLTE), networkoperators will have the ability tooffer enhanced voice services on LTE networksaround the globe. VoLTE enablescustomers to enjoy additional mobileservices such as presence, video and chat.The new benefits can be available fromany device, location or service providerin both mobile and fixed broadband datanetworks.At Barcelona, Verizon Wireless and Samsungmade one of the world’s first LTE voicecalls over a smartphone with an IMS clientfor Voice over LTE (VoLTE) according to GSMAspecifications. The companies accomplishedthis over Ericsson’s LTE demonstration networkbased on commercial products and usingSamsung’s 4G LTE smartphone, whichwill be available through Verizon Wirelessin the United States later this year.“Verizon Wireless has always been aninnovator in the technology industry, andVoLTE is the most recent example,” saidTony Melone, chief technology officer, Verizon.“We expect to have commercial VoLTEservices available in 2012.”“Samsung is proud to have played a keyrole in today’s successful trial and demonstrationof the power, speed and connectivityof voice over LTE communications,” saidTom Jasny, vice president of 4G and mobilebroadband for Samsung Mobile.LG Optimus 3DOffering the world’s first full mobile3D experience, LG presented the LG Optimus3D smartphone, featuring innovativetechnology, to be rolled out globally startingin Europe in the second quarter. Thepresentation speaks to the industry’s newesthot ticket—3D. Several exhibitors demonstratedcool 3D technology for wireless,Continued on Page 15Vkoletic | Dreamstime.comA-P BUSINESS & TECHNOLOGY REPORT | 9

developmentProbably the most effectiveand easiest approach is for localgovernments to prioritize andscale up domestic priorities,focusing on poverty and hungereradication as the first step toachieve economic growth.ment, while one in three are underweight.The figures become skewed in South Asiaand Southeast Asia. In all probability, thegoal of eradicating child hunger is notlikely to be achieved. Even successfully addressingthe problem of undernourishmentmight prove an unachievable goal.Millennium Development Goalsfor the Asia-Pacific Region- Combating HungerHow to Minimize Hunger in the APAC RegionBy Yashika DhingraTheAsia Pacific regionis today a region oftwo extremes.At one end are rich countries with abundantresources or the resourcefulness to becomerich (a glaring example being Japan).At the other end are poor land-locked countriesthat lack visionary political willpowerand a lack of direction towards achievingbetter economic growth. Caught betweenthe two extremes are several countriesSandeep Singh | Dreamstime.comthat have episodes of poverty and stuntedgrowth.Thus the path-breaking MillenniumDeclaration of September 2000 at theseminal Millennium Development Goal(MDG) chose the goal of reducing by halfthe occurrence of poverty and hunger inthe APAC region. Other smaller goals thatwould eventually lead to the achievementof this main goal will require a multipleapproach methodology.The ground reality in the regionIn the Asia Pacific region today, some 900million people are in extreme poverty. Oneout of six people suffers from malnourish-Innovative approachesthat would help in achievingthe goalsProbably the most effective and easiestapproach is for local governments to prioritizeand scale up domestic priorities, focusingon poverty and hunger eradication asthe first step to achieve economic growth.Required prioritization includes setting upnecessary funds to implement programsconsistent with the Millennium DevelopmentGoal. An innovative approach wouldbe assigning government executives whowould deliver the necessary knowledge forthose below the poverty line to understandthe importance of nutrition and micronutrients.Approaches need to be applicable to theground realities of the region or area. In theland locked nations, natural resources areabundant, but the driving forces necessaryto exploit those beyond the mere export ofraw materials is the key to development.Regular employment will show a steady increasein income which will translate intobetter nutritional patterns for children andworking adults.Approaches such as focusing only onhunger hotspots are scalable, achievablegoals. There are several degrees of povertyand hunger amongst the different nationsof the region. Hence, the middle-incomegroup of nations can fund their own hungerprograms. Meanwhile, the poorer andisolated nations should accept internationalfunding and hunger eradicationprograms to fast track their goal of halvingthe hunger driven population in theircountries.The Millennium Development Goalscould well elude the region on the presentstatistics. However, what it will achieve isthe creation of small achievable targets ofempowering regions and sub-regions togain economic growth and development,as well as a nutritional increase in the foodthey eat. This would represent a realizable‘best outcome’ of a very ambitious and noblegoal. Sustained development has longbeen the historic economic plan in the Asia-Pacific region countries. Setting the hungryand poverty-stricken nations of this regionon the path of sustainable growth withinthe framework of the ecosystems they belongto will help in the complete eradicationof hunger in the following decade. A-P10 | A-P BUSINESS & TECHNOLOGY REPORT

usinessbusinessChina’s Stranglehold on RareEarth Ores - The RepercussionsShanghaiAirports:Serving a Bustlingand Dynamic Cityby Kevin LiuThe emergence of worldclassShanghai airportsin the busiest and mostdynamic transport hub ineastern China is only fittingto Shanghai’s continuousdevelopment not only ininfrastructure but as one ofthe most important businessand financial centersin China and in the world.These airports have made the city moreaccessible to local and international travelers,adding to the already established linksof the city to major commercial and businessareas in China as well as from otherdestinations in Asia and other major citiesin the world.Serving local andinternational travelersAs a major commercial and business hubin China, Shanghai is served by two moderninternational airports with state-of-theartfacilities and equipment. These airportsservice more than a thousand flights fromdomestic and international destinations, includingmajor cities in China and the restof the world.First in the list is the Honggiao InternationalAirport, the first civilian airportin China which has been giving service tothe public for more that eighty years. Withtwo major terminals spread across 20 acresof land, the airport boasts first class facilities,communications equipment, and landing/take-offcapabilities that can handle alltypes of airplanes in the world.Following on its heels is the Pudong InternationalAirport, the newest internationalairport in China that handles the third highestair traffic volume in China after Beijingand Hong Kong. Pudong handles most ofthe international traffic to and from Shanghai,while Honggiao mainly serves domesticroutes and selected international flights toother Asian cities.Longhua Airport, which served as themain airport in Shanghai until the 1950’swhen Honggiao airport was opened to thepublic, is now one of two Shanghai generalaviation airports that are used for pilottraining and as an emergency landing facilityfor local authorities and rescue services.Liouyuyaho | Dreamstime.comLeading edge technologies usedin Shanghai airportsShanghai is emerging as one of China’smost dynamic cities with impressive infrastructureson the rise as well as the bustleof economic activity conducted within thecity from local and international quarters.In this regard, it is apt that internationalairports serving the city utilize leading edgetechnologies to better serve travelers.This can be noted in the efficient architecturaldesign in these major airports aswell as the state-of-the-art baggage handlingand sorting system that ranks on par withthe best in the world. These sorters utilizemodern computer systems and controltechnologies, making baggage to passengerreconciliation faster and more accurate.These airports also feature secure e-commercefacilities making online bookingspossible - a first in China. Utilizing softwareadapted from international providers,these online booking and payment systemsplaced these airports in line with internationalstandards.Shanghai is the fastest growing economicand business portal in China, providing bigopportunities to further economic developmentfor this nation. Infrastructure developments,globalization of systems andpolicies, as well as upgrades in facilities andquality of services in public amenities suchas those seen in Shanghai airports are helpingto prepare a new era of development forthis city. A-PIvan Cholakov | Dreamstime.comEasternGermanyStrengthensBusiness Tieswith AsiaBy Anurag AgnihotriAsian investors arecurrently eyeing Germany’seastern hightechregions, as the countryhas unveiled a brand newairport to facilitate tradebetween the two regions.Once the new facility becomes operationalfrom June 2012, it will provide increasedcapacity and decreased travel times to Asiandestinations.Indian investors in New Delhi will receivea preview of the Berlin BrandenburgInternational Airport (BBI) on February 22,2011. Construction is now in full swing forthe BBI, which is touted to have a capacityof 27 million passengers when it opens. Theairport will also include an expansion optionto handle up to 45 million passengersannually.Eastern Germany is known for its numerousfuture-related industries, includingrenewable energy, semiconductor, and automotiveindustries. “Berlin BrandenburgInternational Airport strengthens EasternGermany’s attractiveness as a high-techbusiness location,” said Michael Pfeiffer,chief executive of Germany Trade & Invest.“The airport further improves the alreadyexcellent infrastructure in the region andadds a new modern gateway to the entireworld.”Indian FDI stocks in Germany have nearlyquadrupled since 2005, according to a release,and about half of all new investmentprojects are in the information technology(IT) industry, including software and communications.In the coming days Germany Trade & Investwill conduct several road shows in Asiain cities including Pune, Kuala Lumpur, Malaysia,and Beijing. A-PBy Rashmi GuptaRare Earth Elements– REEs – are makingheadlines of late, andfor all the wrong reasons.Even a year ago discussion of rareearth elements remained confined mostlyto academic and technical discussionsamong manufacturers of sophisticateddevices such as cell phones and laptops.REEs are also used in the manufactureof cruise missiles, precision guided missiles,reactive armor as well as radar systems.And they are also the driving forcebehind most green technologies today.The most important civilian applicationsfor rare earth elements are for use are inwind powered turbines as well as pluginhybrid vehicles. Oil refiners use rareearth materials as catalysts.What are rareearth elements?Rare Earth Elements are elementswith atomic number 51 to 75 on thePeriodic table and known generically asLanthanides. Scientifically all rare earthelements are classified into two categories,namely, light rare earths and heavyrare earths.The first category includes lanthanum,cerium, praseodymium, neodymiumand samarium, and they areavailable more abundantly. The secondcategory comprises the heavy rare earthelements of atomic numbers 64-71 andyttrium. However, these are quite rare,and are used only in very sophisticatedand high end applications such as Erbiumfor fiber optics and communicationhardware. Europium and Terbium workas phosphors and Gadolinium is used inMRI devices.Continued from Page 9including Innanosys, offering a compact full3D camera module for handhelds and Israel’sComodo Console, specifically designedfor the car with 3D graphics.Why are they so important?Rare Earth elements are ideally usedin critical sectors as well as in everyelectronic gadget we use in our everydaylives. Therefore, the requirementsfor these elements are insatiable. Theseare abundantly available on the entireearth’s surface but in negligible quantities.They are also present in differentpercentages in minerals, and extractionsfrom these sources are intensive and veryexpensive. On the surface of the earth,Bastnaesite is one of the primary mineralsin which the more useful light earthelements are available in appreciablequantities in China and the US. Anotherpopular mineral source is monazite andthis is found abundantly in S.E. Asia, Braziland India. However the percentage ofrare earth elements gained from secondarysources is almost negligible.Why is Chinese rareearth important?China has 97% of the most valuableREEs and is with each year lowering thepercentage it releases while increasingits own consumption. Most countries arerankled by the economic embargo thatgives China a political upper hand in theglobal Balance of Power. The global demandis expected to soon reach 200,000tons per year. In 2008, China produced139,000 tons only. Japan has been themost affected but it has been shoppingaround for alternative sources and hasfound effective resources in Australia.The U.S. is also leveraging its own stocksbut wants to buy more from China.Currently, this all benefits China, as itrefuses to release further REEs, therebycreating an artificial demand and supplymismatch. The repercussions are multifold,with the most important being economicmonopoly with the aim of gainingwrongfully at the cost of development ofother countries, especially Japan. A-PThe Mobile World at BarcelonaThe GSM reported record attendance forthe mobile industry’s largest event, withmore than 60,000 visitors from 200 countries,including more than 3,000 CEOs. Therecord attendance to this year’s MobileWorld Congress is an indication of the importanceof innovation in technology andtelecommunications for the sector. Mobilewill continue to transform the way theworld communicates, how business is conductedand how people live their lives.BRIEFTelecom innovations were at its peak at theMobile World Congress. Many companies exhibitedtheir innovative products and services at theevent. Mobile broadband fuelled by LTE / 4G willbe the thrust area for telecom operators in comingmonths. Tablets and hi-end devices will find spacein the pockets of more consumers. Despite recession,Asia attracted huge investments in telecomnetworks. A-PCOMPANIES MENTIONEDIN THE ARTICLE:• Qualcomm• SK Telecom• Alcatel-Lucent• Verizon• Telenor• Freescale• LG• Samsung• Nokia Siemens Networks• GSMA14 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 15

usinessby Nicolas LeeThe online shoppingmall has become a majormarket for Koreancustomers. They sell moregoods than departmentstores or malls, as their easyaccessibility and affordableprices compare favorablywith offline stores.This is quite remarkable if we thinkabout the fact that the history of onlineshopping is very short; indeed, it has beenjust fifteen years since the very beginningof it all. In 1996, Interpark and Lotte onlineshopping mall started this new business.Jacetan | Dreamstime.comOnline Shopping Malls in KoreaFive years later in 2001, the market size wasjust above 3 trillion Korean won. With 20%annual growth every year since, the overallmarket size is now slightly over 34 trillionKorean won.There are many kinds of online shoppingmalls. The first kind is a “generalmall” where one can purchase practicallyanything. For examples include Interpark,D&Shop, Lotte.com and CJ Mall in the Koreanmarket. The second kind, the “professionalmall”, sells specific goods in certainareas such as printed materials like books,magazines, CDs and so forth. Aladin, theKyobo online store and Yes24 are examplesof this second type. Lastly, there are “openmarkets” where anyone can purchase and/or sell their items. These are similar to fleamarkets except that business is conductedonline. G Market, Auction and 11th Streetare examples of this type of online shoppingmall.There are several major competitive issuesfor online shopping mall businesses.One is that offline enterprises are enteringinto the online business. The other is thatsocial networking sites (SNS) are more andmore involved with selling goods online aswell. In the future, an increasing numberof “smart phone” users in Korea will enterthis market via that device, as well, bothas buyers and sellers. With an anticipatedmarket size of 40 trillion won in 2011 and48 trillion won in 2012, it is safe to assumethat the online shopping mall industry isn’tsimply a passing fad or a boom. Growth isexpected to be steady every year.This growth is especially true for fashionbrands, which need very intensive communicationefforts for their brands. SNS andother Internet networking can be very costeffectivecommunication channels. It’s lessexpensive than conventional communicationmethods and it updates in real-time,so that brands can react to their customers’feedback very quickly.Online stores used to be considered ascheap and low-quality consumer productmarkets because of the uncertainty of quality,size and delivery. However, thanks tohigh-speed Internet networks, sellers uploadmore product images and informationon their websites, and the use of securedpayment systems such as Paypal have enabledvery fast growth for these increasinglyimportant markets. That’s why evenLouis Vuitton launched their own onlinestore as well.According to the Korean Statistical InformationService, in 2005 the market size offashion products transactions online wasabout 96 billion KRW, but in 2010 it grewto 460 billion KRW, almost doubling everyyear. Newly launched brands often sell theirproducts online internationally. Even ifthey don’t have a international distributor,they can access to their customers directlyvia Internet.Internet marketing can be a very interestingand effective approach towards internationalmarkets for major fashion companies.What’s new and interesting, though, isthat this approach is also effective for thosesmall, new, up-and-coming brands thathave strong brand images as well. I will tryto identify some of these for you throughoutthis year.VAGX (www.vagx.co.kr) is a bike messengerbag brand made by Korean fixed gearriders. Their marketing on the Internet is agood example of the above. They promotethemselves by sending their products topower bloggers. Since the fixed gear sceneis very new, many people are relying on socialnetwork services to share their ridingskills and product information. They updatetheir news almost everyday and the networkis very fast and international. Whena new product is launched in London, thenext day it’s updated on Japanese or Koreanblogs. With these powerful networks, VAGXachieved quite large sales figures internationallythrough the Internet. If you checktheir site, even though it’s a Korean brand,you can hardly find a Korean word. You canfind their products in London, Paris, NewYork and Tokyo as well as Korea. Their promotionis quite successful, especially consideringtheir small outlays in comparisonwith others.Surprisingly, VAGX is simply 6 peopleworking in a small-scale company. A-PJourney of Online Shopping in Asia-Pacificby Meenakshi KrishnanOrder, click and collect– online shoppingis gaining increasingpopularity, offering customerswith enticing experience.The world is drastically moving towardsan era of online dependency. Within thisglobal trend, online shopping is definitelypicking its pace, particularly in the Asia-Pacific region. Penetration of broadband Internet,lifestyle changes, increasing incomelevels and elevating cultural factors aresome of the reasons.Up until a few years ago, Indians wereconservative in their approach to shopping,yet online shopping there is fast evolvingand no doubt has great potential in thefuture. Numerous companies are creatingsimple tools that can streamline the experienceand eliminate some of the difficultiesconsumers face in the process.A recent survey conducted by Visa showsall the consumers from the six fastestgrowing e-commerce markets in the Asia-Pacific area are keen on online shopping,and around 87% of them said they had purchasedproducts or services online last year,spending an average of nearly 2,100 U.S.dollars in the process. A total of nearly 3,200Internet users from the Chinese mainland,India, Indonesia, Malaysia, Taiwan and Thailandtook the survey, which revealed onlineshopping habits and influential actors. Thesurvey shows online shopping is especiallypopular among respondents from the Chinesemainland and Taiwan.Reports also indicate that the onlineshoppers in this region spend most on tourism,including booking air tickets and hotelsand travel. Other major spending areasare stock brokers and trading, electronicsand appliance products, banking and financialservices, as well as computer hardware.Online shopping has many advantagesand disadvantages compared to traditionalretail shopping. Most online retailers useshopping carts to allow shoppers to addmultiple items, and they are allowed to payvia several methods which is very similar totraditional retail shopping.Some of the disadvantages for onlineshoppers are that once the product is identifiedand added in the cart and the paymentmade, the product delivery is doneonly through shipping or via in-store pickup.This often ends up in significant delaysfor the retail shoppers. Security concern isanother significant disadvantage, but thisis currently being addressed by some of themajor credit card companies. Visa launchedRightcliq, an online shopping tool that improvesthe way consumers browse and compareproducts, checkout on merchant websites,and track packages to their doorstep.Another disadvantage is that in the actof ‘regular’ shopping, consumers are oftenassisted by shop employees, whereas for onlineshoppers, they are merely given phonenumbers to contact for any further detailsor required assistance. Also, if the productinformation is not sufficiently provided andthe photograph of the product is not up tosatisfying standards, consumers may failto choose the product, which is not in thecase of physical shopping where customerssee the product directly before making thepurchase.Key advantages of online shopping includethe fact that consumers can accessthese stores round the clock, evenon public or declared holidays, andthey have the choice to sit convenientlyat their home and do theshopping. This eventually helpsthem in avoiding time and moneyon parking, fuel expense, and perhapsmore importantly, it helpsthem in reducing carbon output.Also, searching and browsing productsis much simpler in the onlineshopping process compared to traditionalretail shopping. Moreover,there is the facility to compareprices between different storesquickly and easily.“Any organization offering aconsumer product or service intoday’s marketplace is open toscrutiny from every angle, and itis critical that these organizationsnot only understand those consumers,but effectively engage andcommunicate with them,” advisesMegan Clarken, Asia Pacific managingdirector of Nielsen’s online division.Consumers are also increasingly becomingaware about the possibility of returninggoods, if they are not satisfied with theproduct. A few years back, customers wereexposed to the less popular tele-shoppingmethod which dealt in a limited range ofbusinessproducts. Then came the culture of malls,where all the products were made availableunder one roof at a competitive pricepackage. Nowadays, the era of virtual malls(online shopping) is starting to grow exponentially.Some of the initial takers on thismarket in India were eBay, Rediff shoppingand futurebazaar.com.Retail is one of the fastest developingsectors in India, with new players and newA Few Tips for Safe Online Shopping> Carry out your transactions from a secured PC> Be well-versed with the website you use> Never give away your personal information> Go through the privacy policy of the company> Paying by credit card is wiser> Make sure that the transactions are secured,and that the shipping policy of the company is inplace.> Consider not only the actual price of the item,but also the shipping charges, handling fees andsales tax.> Make sure that you keep the printouts of all onlinetransaction records, which you can eventuallyuse as proof of purchase if necessary.malls flourishing every day. A press releasefrom the marketing and consumer informationcompany said that more than a quarterof the consumers surveyed indicate theyspend over 11 per cent of their monthlyshopping expenditure on online purchases.The report also found that Asia-PacificJacetan | Dreamstime.com16 | A-P BUSINESS & TECHNOLOGY REPORTA-P BUSINESS & TECHNOLOGY REPORT | 17

usinessbusinessconsumers spend the most on online purchasesas a percentage of total shoppingexpenditure compared to any other regionglobally.Indians are fast getting used to this verysimple and easy way to buy a lot of products.Thousands of websites related to onlineshopping in India have been designedto fulfill the needs of different customers.With advancements in science and technology,almost everything is going online,including shopping malls. Growth in thisindustry shows no sign of slowing downin the future, according to research, withan estimated 63% of all Internet users alreadypurchasing products online. Further,as banks continue to increase the securityof personal and credit information, morepeople are becoming less doubtful of thepractice. Experts predict that the future ofonline shopping rests on user-experienceand as this grows, consumers will alsoshare their experiences with others, contributingto further growth in the industry.According to an India Online LandscapeReport from 2010, Internet usage and penetrationin India was indicated at 51 millionindividuals, out of which 40 millionare from urban areas and 11 million fromrural areas. Internet is said to have reached10% of Indian households and 4.4% of Indiansoverall; 2/3rds of households have multipleusers in them; 97% of these are regularusers and 1 in 4 access the Internet onmobile phones, though most of them are‘dual’ users (PC + Mobile). With referenceto online shopping in India, the report indicatesthe online shopper base to have increasedby 2.5 million (33% growth).The India Online Landscape Report 2010is recognized as the most recent and comprehensiveestimates of Internet user-shipin urban and rural India. The estimatesare based on a land survey conducted betweenApr 2010–May 2010 among 259,341individuals from 37,024 households in 100cities and over 20,396 households in 1,040villages spread across all the 4 regions ofthe country.E-commerce is a fast-growing andchanging trend. Making purchases on theWeb is more convenient now than ever.With increasing consumer interest in onlineshopping, the amount of trade that isconducted electronically has seen extraordinarygrowth. According to MasterCard’s‘Latest Insights Report, Online Shoppingin Asia Pacific - Patterns, Trends and FutureGrowth’, this growth is poised to furtheraccelerate in the region and is expected toincrease at an annual rate of 23.3%, reachingUS$168.7 billion by 2011.Also, the rising population segmentof upper-middle-income earners is likelyto boost the online shopping markets inChina and India significantly. Domesticconsumption spending in the two countriesis poised to pick up strongly, whichis interconnected with the rise of urbanization,robust economic expansion andimproving spending force. From the convenienceof one’s own home, one can shopfrom a variety of products available in avariety of choices, from home furniture topersonal care products, from mp3 playersto biscuits.Why not just browse and have fun inshopping online… A-PKorea’s POSCO Gets Green Lightto Operate in Orissa, Indiaby Anshu ShrivastavaIn January, Korean steelgiant POSCO finallyreceived the green lightfrom the Ministry of Environment& Forests (MoEF)of the Government of India(GOI), for the $12 billionproject in Orissa -- the statewhich is located on the eastcoast of India.The project is comprised of a steel plant,a captive port and a minor port. However,the clearance for this project comes withseveral new riders, directing the companyto meet a series of environmental standards.Union Minister for Environment & Forests,Jairam Ramesh, said in an order thatenvironmental clearance for the steel-cumcaptivepower plant is being accorded with32 additional conditions, over and above[those] stipulated in the original environmentalclearance of July 19, 2007.The additional conditions for the steelcum-captivepower plant ask the companyto carry out sustainability study of waterrequirement for the plant by an instituteof repute; forgo the water intake in casethere is a shortfall of water at the JobraBarrage for irrigation purposes; and ensurethat the total green area within the plant is25% of its area as per the guidelines of theCentral Pollution Control Board (CPCB). Inaddition to fulfilling the Resettlement andRehabilitation (R&R) obligations mandatedby the state government’s package and implementingcorporate social responsibility(CSR)-related programmes in the constructionphase, the company now also has todevote 2% of net annual profit to CSR in theregion where the project is located.For the captive port, the company hasbeen barred from undertaking any constructionwork in the ‘high erosion’ zone.Also as per the 32 additional conditions,the company has to undertake shorelineprotection measures to counter erosion inthe northern side of North Breakwater, andsubmit detailed Marine Environment ConservationPlan.Jairam Ramesh also has sought a categoricalassurance from the Orissa governmentthat there was no violation of the ForestRights Act in the land acquisition. LastBarun Patro | Dreamstime.comyear in August, he had directed the Orissagovernment to halt the land acquisition forthe project. This directive was based on aground report submitted by a three-membercommittee set up by the Environmentand Tribal Affairs Ministries.The seed for this much talked about projectwas sowed in June, 2005, when Pohang,South Korea-based Pohang Iron and SteelCompany (POSCO) signed a memorandumof understanding (MoU) with the Governmentof Orissa for the construction of asteel plant, and also development of ironore mines in the state. Later in August,2007, the company incorporated its Indiansubsidiary POSCO-India Private Limitedwith the Registrar of Companies, Orissa,under the Companies Act of 1956. The companyhad plans to build the plant in threephases by 2016. Originally, production wasscheduled to begin by the end of 2011 afterthe completion of the first phase. The companysays that the integrated steel plant willhave a total capacity to produce 12 milliontons per annum - with 4 million tons in thefirst phase.Billed as the single largest foreign directinvestment (FDI) in India, the project hasstill not been able to take off as it has beenembroiled in one issue after another, includinglegal, logistical, procedural, and environmental.The locals fear that the project willrender them landless and also snatch awaytheir forest-based livelihoods. The proposedplant area will be spread over 1621 hectaresof land, which includes nearly 1253 hectaresof forest land. In June 2007, the OrissaBilled as the single largest foreign directinvestment (FDI) in India, the project hasstill not been able to take off as it hasbeen embroiled in one issue after another,including legal, logistical, procedural,and environmental.government sought the permission of MoEFto offer forest land for the project. The ministrygranted “in principle” permission onSeptember 19, 2008 and with 13 conditionsto be fulfilled.The project received environment approvalsin 2007, and in 2009, the mandatoryforest clearance. But, social activists and environmentalexperts objected to the grantingof these approvals, and staged a seriesof vocal protests against the project - as aresult, Jairam Ramesh set up a four-memberinquiry committee, which submitted twodifferent reports after a review. The firstreport concluded that there is no need tocancel clearances, but the project proposalmust carry out a comprehensive EnvironmentalImpact Assessment (EIA). The otherreport suggested the cancellation of the EnvironmentalImpact Assessment (EIA) andCoastal Regulation Zone (CRZ) clearancesgiven to the proposal. Both the committees,however, agreed that provisions under theForest Rights Act (FRA) need to be reexaminedby the state government. Due to thesplit verdict, Jairam Ramesh constitutedanother expert panel to review whether theproposed steel plant could be given greenclearance or not.The POSCO project is seen as somethingof a test for India, and prospective investorsare closely watching the proceedings tosee how the country balances its ambitiouseconomic and industrial growth plan withenvironmental concerns. Lately, the MoEFhas been in the news for blocking severalprojects, citing environmental concerns,and the Minister has been accused of followingan “anti-growth” agenda. In a bid tosquash the growing criticism that his Ministryis anti-industry, Jairam Ramesh saidthat undoubtedly, “projects such as that ofPOSCO have considerable economic, technologicaland strategic significance for thecountry.” He added that at the same time,“laws on environment and forests must beimplemented seriously.”Foreign investors, Indian corporatehouses and the government of Orissa havewelcomed the central government’s decisionto clear the Posco project. Reacting tothe Ministry’s order, Naveen Patnaik, chiefminister of Orissa, said his governmentwould study the conditions and see whatcould be done. “On the face of it, it seemsto be good news.” Raghunath Mohanty,steel and mines minister in the Orissa government,said that the implementation ofthe POSCO steel project would open a newchapter in the history of industrializationin the state.Welcoming the decision of the MoEF,G.W. Sung, managing director at POSCOIndia, said that the company fully appreciatesthe concerns of different stakeholderson sustainability of environment as wellas the livelihoods of affected people. Headded that they are committed to takingsustainable green initiatives and effectivemeasures for conserving the land and marineenvironment of the area, and also arecommitted to creating sustainable livelihoodopportunities for the project-affectedpeople through implementing R&R packagesincerely.The environment ministry approval forthe project may have paved the way forthe construction of the steel plant, but itstill does not look like a smooth sailing forthe world’s third largest steelmaker. Socialactivists and environmental groups haveslammed the decision. Posco PratirodhSangram Samiti (PPSS), which has spearheadedanti-POSCO protests since 2005, hascondemned the decision. “We will not giveup our lands, our forests and our homes tothis company. It is not the meaningless ordersof a mercenary government that willdecide this project’s fate, but the tears andblood of our people,” said Prashant Paikray,a spokesman for PPSS.Abhay Sahu, president for PPSS, announcedthat the villagers who were notwilling to part with their land for thesteel project would intensify their agitation.Environmentalists are concernedthat the steel plant locations are close tothe breeding sites of the endangered OliveRidley turtle. They believe that the waterreleased from the plant could affect marineecology and the livelihood of thousandsof local fishermen. The NationalFishworkers Forum (NFF) also came outagainst the project, and called the clearancea sell-out to economic interest atthe cost of not only the environment butalso the lives and livelihoods of the fishingcommunity. India’s main oppositionparty, Bhartiya Janta Party (BJP), has alsocriticized the Union Government for accordingconditional clearance to the Poscoproject in Orissa and has demanded aCBI probe.In addition to handling the protests andcriticisms, the company still has severalhurdles to cross before the plant starts production.Some of the upfront issues thatneed to be tackled by the company are therehabitation of locals and the acquiring ofmines - the government of Orissa has assureda mining lease for 600 million tonneContinued on Page 3918 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 19

greengreenChina Leadingthe Asian Pushinto GreenTechnologyLynette WuThe race is on for worldwideleadershipin greentechnology, andChina leads the wayas it spearheads theAsian push and isnow rapidly makingits way to the top.According to the United NationsEconomic and Social Commission forAsia and the Pacific, green technology isset to be Asia’s main fuel to drive continuousgrowth and to reduce its reliance onindustries and markets in the West.According to the UN, green technologywill provide export-dependent economieslike China new markets to sustain economicgrowth in the wake of the globalfinancial crisis that hit the United Statesand Europe, and which subsequently resultedin reduced demand in many markets.China is at the forefront of greentechnology and is expected to become thetop exporter in the coming years, a factthat has become more evident now withChina’s role as a top manufacturer to theworld.Frenta | Dreamstime.comChinese greentechnology initiativesSince 2009, China has invested morethan 34.6 billion dollars per year in greenindustry, an amount which is expectedto grow in the coming years. Accordingto the Center for American Progress,China spends approximately $12 millionan hour on green technologies, 10 timesmore than American investments, makingit the world’s largest investor in thisfield.These investment initiatives are spurredmore out of necessity than anything else;particularly with regard to the critical environmentalproblems China is now facing.The so called “Green Wall of China” isChina’s massive effort to stem desertificationin the hands of nearby Gobi Desert,and this includes creating a 2,800 km longforest strip along its borders which is expectedto be completed by 2074.At the forefront of China’s green technologyinitiatives is its aggressive renewableenergy production, with wind andsolar energy at the helm. One of its leadingwind energy firms, China Goldwind,recently launched a $917 million project,while solar module giant Chaori Solar initiateda $360 million project during thelast quarter of last year. More and more renewableenergy manufacturers and developersare expected to jump on the greentech bandwagon this year.The aggressive move towards renewableenergy production is a necessity for thecountry which is now faced with an imminentlack of oil, coal and other fossil-fuelresources. With a continuously growingpopulation, millions of cars added eachyear, and doubling demands for electricityfor use in its growing industries, relyingon green technology is a desperate movefor survival.China’s green technology initiativeshave a positive economic side effect however,and are fueling huge profits forgreen tech companies which will eventuallycatapult China as the clean tech laboratoryand manufacturer for the world.Solar panels and other green technologyproducts are exported heavily and willeventually end up in homes, schools, andbuildings in the West. The recent visitof China’s Hu Jintao to the US sealed a$45 billion export deal which focuses oncleantech solutions and green technologies.The future of greentechnology in Chinaand the APAC regionThe United Nations has praised greenAccording to the UN,green technologywill provide exportdependenteconomieslike China newmarkets to sustaineconomic growth inthe wake ofthe global financialcrisisthat hit theUnited Statesand Europe,and which subsequentlyresulted inreduced demand inmany markets.technology efforts by China and otherAsian countries such as South Korea as amove to shift production and consumptiontowards a more environmentallysustainable path. South Korea is planningto invest $84 billion in green technologyinitiatives which will be implementedwithin a five-year period.China, which has already invested upto $100 billion dollars each year for aprojected 10-year period, is planning toexpand its renewable energy initiativesfurther with another $440 billion stimuluspackage. This is in line with the country’sefforts to cut energy consumptionby 20 percent and reduce pollution downto 2005 levels. A-PFurther Reading:• Physorgwww.physorg.com• ABC Newswww.abcnews.go.com• UWirewww.uwire.comCompanies Mentionedin this Article:• United Nations Economic and SocialCommission for Asia and the Pacificwww.unescap.org• China Goldwindwww.goldwindglobal.com• Chaori Solarwww.chaori-solar.comElectronic TradeGreen Effectby Amanda Min Chung HanIf you conduct your businessaffairs online, youcan save thousands oftrees and you can removeyour carbon footprints. Areyou ready to join the worldmovement toward ecofriendlyInternet business?These days, nearly everything goes online.We listen to music on the Net streamingservice, read books on an e-book reader,and even go grocery shopping on Internetshopping malls. Export and import are certainlyincluded in this growing sphere ofbusiness. You would likely agree that onlinecommerce is cost efficient and time-saving,but is it eco-friendly? The answer is yes, andhere is why.Electronic trade (e-trade) in goods allowsparties involved in trade and transport tosubmit electronic information to fulfill allimport and export orders. E-trade is nowadaysbecoming essential to save both costand time, and it also adds to the convenienceof doing business. However, there isanother big advantage of e-trade which isnot well known. E-trade can help with thereduction of carbon dioxide.E-trade does not require paper documentation.According to the Korea InternationalTrade Association Institutefor International Trade (KITA IIT), paperlesstrade saves 420 million pieces of A4size paper a year. To produce one box ofA4 paper, 4.3 trees are needed. Therefore,these 169,000 boxes of A4 size paper(420million pieces of paper) add upto 727,000 trees. Also, one tree absorbs39.6kg of carbon dioxide per year. Thatmeans that 727,000 trees remove 28,000ton of carbon dioxide gas from the air annually.KITA has also surveyed the average traveldistance for document processing of variousbusiness entities. Trading companies travel11.3 km to banks, 41.4 km to customs offices,and 18.5 km to other entities to processan average of 3.6 documents. Shipping andair cargo companies travel 9.5 km to customsand another 14.9 km to other entitiesto clear 3.8 documents. Before e-trade wasintroduced, 107 million documents weredelivered in Korea by cars for documentprocessing. On average, each documentwas delivered by a vehicle driving betweenContinued from Page 13of experience with composite materials,the software that engineers used to predicthow the aircraft would behave did a poorjob. And this contributed to problems likeskin wrinkling on the aircraft’s surface.Boeing has struggled with these problemsfor years, but to its credit it has finally acknowledgedthem.9.5 km to 44.2 km, depending on the document.That adds up to a total of 135 milliondriven kilometers.Based on the Korean Ministry of Environment2009 database, domestically producedcars emitted 209 g of carbon dioxide per kmwhile imported cars generated 254 g of CO2per km. Since the domestic cars’ marketshare is 94% and imported cars comprise 6%,the median carbon dioxide emission is 212g per km. Therefore, when vehicles travela distance of 135 million km in deliveringdocuments, a total of 29,000 tons of carbondioxide is emitted.Thus, we could reduce a total of 58,000tons of carbon dioxide - 29,000 from paperlessdocumentation and another 29,000tons from not running cars. To absorb thisamount of carbon dioxide we need 1.45 milliontrees. E-trade gives us the same effectAn in-depth Jan. 20 report from Reutersquotes a Boeing statement: “We made toomany changes at the same time -- new technology,new design tools and a change in thesupply chain -- and thus outran our ability tomanage it effectively for a period of time.”Boeing claims that it has learned tremendously,but will continue outsourcing.One step taken in 2009 was to “in-source”Rzymu | Dreamstime.comby preserving the same numbers of trees.Considering the annual number of treesplanted is 36 million, the preserved numberof trees is 4% of the total trees plantedper year in Korea. This amount of carbon dioxide‘savings’ equals 260,000 cars not runningfor an entire month.As of the end of 2009, the use of e-tradeservices in export clearance is around 98%,72% for custom refund, and in foreign exchangeabout 42%. The Korean governmentis working on a single window system to implementa 100% paperless one stop e-tradesystem for export and import. At the sametime, the government has been cooperatingwith other Asian countries and economicorganizations to have mutual agreementsin implementing similar systems. The futuredoes, indeed, look greener than wemight have been led to believe. A-Psome of the work for big chunks of the 787airframe. In July 2009, Boeing acquiredtwo plants that make those parts from supplierVought Aircraft Industries. Boeingviews the financial benefits of outsourcingas irresistible. But unless it learns how tofix the problems of outsourcing, too, it isdoomed to suffer the 787’s cost over-runsand delays with future aircraft. A-P20 | A-P BUSINESS & TECHNOLOGY REPORTA-P BUSINESS & TECHNOLOGY REPORT | 21

greenThe GreatestChallenge forthe PacificIslands- Climate ChangeBy Vinti VaidThe clarion call forreducing carbon emissionswas given to theindustrialized world nearly21 years ago by the smallgroup of Pacific Islandswhose highest peak reachesa mere 5 meters above sealevel.These tiny self-sustaining islands, facingthe brunt of global climate change, areshrinking fast because of the increase inglobal warming and the subsequent rise inthe sea level. However, most of the industrializednations are refusing to face the problemin its entirety and are merely paying lipservice to being committed to the environmentcause.How are the Pacific Islands beingaffected by climate change?Tuvalu consists of nine islands with aland area of approximately 26 square kilometers.The highest peak is 5 meters abovesea level. Approximately thirteen thousandpeople reside on these islands. Another islandnot far away is Kiribati, consisting of33 atolls near the equator, which are on anaverage 2 meters above sea level. The islandersare watching their islands’ coastal erosiongrowing by the year as sea levels rise.Kiribati is densely populated and has additionalbattles to fight. Drinking water isalways a scarcity, while sewage and wastedisposal have already reached extremities.Tuvalu saw almost 7 percent of its landwashed away in 1997 during two severe cyclones.At the World Environment Day in Wellington,the President of Kiribati called uponthe member nations to stop viewing Greenhouse gas emissions as an option. The Presidentvery succinctly said that while cuttingback on emissions or achieving zero carbonSteve Allen | Dreamstime.comfootprints was an issue of debate to the industrializednations, it was an issue of survivalfor the Pacific Islands. As most of theislands are very tiny, even insignificant climatechanges become driving forces of erosionand the islands then shrink drastically.What the islanders fearGiven the gradual rise in the sea levelsand high incidence of coastal erosion, leadersof most Pacific islands are seeking assurancefrom big neighbors like New Zealandto relocate displaced Islanders.Pacific Islands repeatthe clarion callPacific Island leaders are sounding thealarm again across international forumsand at climate change discussions and conferences.They are already facing the effectsof global warming and are desperately seekinggreater cooperation from the developednations. The Islanders are requesting apost-2012 standard where the global averagetemperature increase cannot go beyondtwo degrees. Though environment expertssay the islands will not be able to survive beyonda 1.5-degree increase, the Islanders arekeeping their fingers crossed while fightinga losing battle against climate change thatwill eventually leave them with no more islandsto call home. A-P22 | A-P BUSINESS & TECHNOLOGY REPORT

ititHolding Backthe Oceanby Matthew WeigandSeveral recent incidentsonline have shown thatthe Internet can be aradical force for change.Tyler Olson | Dreamstime.comFor those nations who try to control theInternet, these latest developments call intoquestion their efforts. Is there any point instemming the Internet tide?The Internet is more of an uncontrollablebeast than pundits previously thought.Such is the impression that I have gottenfollowing the recent unfolding of majorinternational events. The latest feats fromAnonymous, the Egyptian protests, and theongoing Wikileaks controversy point outthe mercurial force of the Internet, or moreprecisely, the mob of people connected toit, which makes one wonder if it can everbe effectively controlled. This question becomesespecially important when talkingabout those nations which seek to activelycontrol the Internet. Are their efforts ultimatelyfutile?Some things just make you sit back andstare in wonder. That’s what happened tome last week when Anonymous, the onlinepersonification of mob mentality, utterlydestroyed a US-based security company ina few days just for fun. The perfect stormof dangerous secrets, lax security, and theinterest of hostile parties came together toleave a formerly respected security companythat was busy wooing fat governmentcontracts humiliated, penniless, and withoutdata.Now, explaining what happened is complicatedby the mystique that computersecurity and Internet hacking have in thepopular culture. Hearing people talk abouthacking and cuber-warfare brings to mindone or several badly-illustrated movies ofabsolute geniuses doing arcane things oncomputers with multiple monitors. Thesehackers perform a techno-voodoo magicalspell in order to do what should not be possible– get all your secrets and control allyour systems. Perhaps in a fit of spite theymake your computer equipment explode,as part of the magic. But what really happenedto Aaron Bar’s security company HB-Gary wasn’t magic at all, just incompetence.That’s all you can call it when hackers getthe password to your most sensitive datasimply by asking for it.Based on the company’s complete bodyof email, which was copied and releasedto the public by Anonymous, the cybersecurityfirm HBGary was deep in the processof winning lucrative security contractsfrom US government agencies. They were incontact with the FBI, the US military, andthe Director of National Intelligence. Thentheir CEO, Aaron Barr, decided to win someonline street cred and boost his company’sprestige in the eyes of the federal governmentby uncovering the secret leadershipof Anonymous, the online hacker organizationthat has most recently been in thenews with regard to DDoSing Mastercard,Visa, and Paypal because of their refusal towork with Wikileaks. Barr had undertakena personal research project and believed hehad uncovered the real names and addressesof the top Anonymous leadership, whichhe planned to turn over to the FBI in a presentation.He went on to show in a file thatthe whole thing was run by three peopleidentified as Q, Owen, and CommanderX.By watching Facebook, Twitter, and IRC,Barr believed that he had matched up theseonline identities to real people, two in Californiaand one in New York.Aaron Barr’s plan was simple. He wantedto “start a verbal brawl between usand keep it going because that will bringmore media and more attention to a veryimportant topic”, as he stated in an emailexchange with Karen Burke, the director ofmarketing and communications at HBGary.The two were discussing the reaction to arecent article on the web site Daily Kos, inwhich an interview of Aaron indicated thathe knew the Internet handles of key Anonymousmembers. He also said, “They thinkall I know is their irc names!!!!! I know theirreal fing [sic] names. Karen I need u [sic] tohelp moderate me because I am getting angry.”He was about to get a lot more thanangry, however.Aaron Barr believed a lot of things thatwere not true. He had just let on in an onlinearticle with Daily Kos that he knew the realidentities of top Anonymous leadership. Hebelieved the most likely result of this claimwas an upcoming verbal sparring matchwith said leadership. He also believed thatit would be good for his company to do this,and that he would get publicity, notoriety,and land fat government contracts basedon his presentation with the FBI that wasscheduled to happen the next day. But noneof that happened because Aaron Barr wasvery, very wrong.The first thing that Barr was wrongabout was that the group Anonymous hadtop leadership. It doesn’t. It isn’t reallyright to even call it a group, or an organization,or a collective. It is none of thosethings. Anonymous can best be describedby a plot point in the movie V for Vendetta.In this movie, the vigilante known as Vwears a Guy Fawkes mask, and eventuallydistributes at least 100,000 more masks tothe general population. Anonymous is thedigital version of that Guy Fawkes mask.Anybody can wear the label of Anonymous,and anybody can do whatever they wantwhile wearing it, and claim to be Anonymous.One can guess that each individualact of Anonymous is spearheaded by one ormore interested parties, and the popularityof the idea serves to recruit more or fewerfollowers. Really popular, awesome ideascan garner thousands of followers and createthe kind of online presence needed todo something big, like taking down Mastercard’spayment system for the day. Lesspopular ideas do not gain the necessarytraction to make it big and are eventuallydiscarded when their novelty wears off.Understanding that Anonymous is not ashadowy hierarchical cabal should be obvious,because the idea is right there in thename. Nevertheless, clueless security firmexecutives and government employeeswho are used to thinking this way believethat Anonymous is an organization thatcan be fought in the way that other organizationsare fought – by attacking the head.Aaron Barr tried to attack the non-existenthead of Anonymous, and it offended thepeople who most closely associated withthe Anonymous identity. So they struckback.The second thing that Aaron was wrongabout was Anonymous’s possible response.He was looking for spirited debate. Butwithin the space of one day, hackers wearingthe mask of Anonymous had managedto take out HBGary Federal’s web site, replacingit with a pro-Anonymous messagesaying “Now the Anonymous hand is bitchslappingyou in the face.” The hackers gotinto HBGary Federal’s email server andcopied over 40,000 emails, putting them upas a torrent file which anybody could download.They claimed to have deleted over oneterabyte of backup data, and had remotelywiped Aaron Barr’s iPad of all data. Theytook over his Twitter account and wroteexplicitly disparaging content about him.Eventually the company’s president, PennyLeavy, entered the Anonymous IRC chatroom to beg the group to stop the attack.The hackers, elated with their extremeamounts of success, demanded that she fireAaron Barr and donate money to the BradleyMannings Defense Fund. Several membersin the IRC chat began dissecting individualemails that they had found withinthe data that they had looted, asking Pennyextremely precise and personal questionsabout her company and its operations. “Didyou also know that Aaron was peddlingfake/wrong/false information leading to theAnonymous canbest be described bya plot point in themovie V for Vendetta.In this movie, thevigilante known as Vwears a Guy Fawkesmask, and eventuallydistributes at least100,000 more masksto the general population.Anonymousis the digital versionof that Guy Fawkesmask.potential arrest of innocent people?”, oneperson asked. Another said, “The documentthat [Aaron] had produced actually has mygirlfriend on it. She has never done anytihng[sic] with anonymous, not once. I hadused her computer a couple times to lookat a group on facebook or something.” Thedocument that they were referring to wasa presentation that Aaron had put togetherto show the FBI. That was the third thingthat Aaron was wrong about. The informationthat he thought he had painstakinglyassembled was incomplete, incorrect, anddangerous. It was a minefield of embarrassmentfor anyone who might have acted onit. In this sense, Anonymous did the federalgovernment a favor by destroying AaronBarr’s company – they had saved the governmentfrom a potential waste of time andpotential embarrassment as well.But did Anonymous really do that muchdamage to the company? Based on theemails recovered by Anonymous, yes, theydid. The company was hurting financially.Aaron Barr complained that he was overdrawnon his personal checking account,and that the company was running extremelylow on cash. This personal researchproject of his on Anonymous was a lastditcheffort to get an edge over the competitionand present the company as worthy ofmillions of dollars in government contracts.Unfortunately, he bit off more than he orhis company’s network infrastructure couldchew. Extensive analysis around the Internethas determined that Anonymous wasable to be so successful not because they arehacking voodoo geniuses, but because thesupposed cyber-security company had failedto take even the most basic precautions regardingthe security of their own networkinfrastructure. The company was actuallynot a real security company, but just pretendingto be. They were using powerpointpresentations filled with buzzwords and theconfident smile of their CEO to appear tobe much more than they actually were. TheAnonymous hacking attempt exposed theirfalse claims for what they really were andruined their reputation at the worst possiblemoment – when they had nothing leftbut their reputation to do business with.There is no way for the company to recoverfrom this loss of reputation, and no way forthem to be profitable now.This overwhelming victory by a fewanonymous Internet users against a cybersecurityfirm teaches a few valuable lessons.The first is that the collective attention ofrandom people on the Internet can be badfor business, if you are a two-bit shystertrying to sell the world with a smile and asong. The complete destruction of HBGarycan be contrasted with the relative easethat Amazon.com shrugged off the concentratedDDoS attack by Anonymous lastmonth. Amazon.com pretty much wrotethe book on distributed computing, whichis an excellent counter to DDoS attacks.Their servers never showed any signs ofbeing slowed by Anonymous, and the hivemind collective eventually moved on to theeasier targets of Mastercard and Visa. Thesecond valuable lesson that one can learnfrom this attack is that bored people sittingat home behind moderately powerful computerscan be more technically savvy thanan actual cyber-security company. Expertiseis not limited to company names, but canbe distributed wherever Internet users are.When we go back to the beginning premiseof this article and consider that entire countriesfeel threatened by the Internet, thenwe can begin to see why they do feel threatened,and why doubts about their ability tocontrol the Internet pop up.But this is not the only recent incidentthat spells doom to governments with arepressive Internet policy. The successfulprotests in Egypt that resulted in the presidentof the country stepping down wereInternet-related, at least peripherally. TheEgyptian government thought so, at least.They were first caught trying to steal theFacebook passwords of their entire country,a move which Facebook countered by offeringSSH logins for their service. Then protestsescalated in the capital and the countryshut down its connection to the Internetand most cell phone networks, hoping thatthe lack of communication would dispersethe crowds. However, that was not the case,as the protesters reverted to older meansof communication and successfully maintainedtheir protests. While in this case astrong argument can be made for many otherfactors besides the Internet being responsiblefor the protests, the fact that the governmentbelieved Facebook to be importantenough to steal login information from andthe Internet itself to be influential enoughto shut down is a most obvious move thatthe Egyptian government feared and triedto eliminate it, albeit unsuccessfully. Whatthey should have done was control the Internetto prevent the people from communicatingand organizing to begin with. ThatContinued on Page 3324 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 25

ititSmart Grid:Challenges andOpportunitiesby Rajani BaburajanDuring recessionaryconditions such as therecent global downturn,emphasis on cost cuttingbecomes dominant.Indian ITSector Backon Growth PathBy Vibhu SaxenaThe Indian informationtechnology sector hasbeen a vital element incontributing to the continuedeconomic growth of thecountry in recent years.The IT sector was profoundly affectedby globalization, catapulting India into theglobal market and capturing sizable percentagesin the business services and technologysourcing markets.The growth in India’s IT sector in previousyears is attributed by initiatives fromvertical industries which include banking,finance, insurance, manufacturing, retailand telecom. Changes in the global marketscenario are providing new environmentsfor emerging vertical industries with a focuson green technologies, energy efficiency,renewable energy, healthcare and mobileapplications - new arenas in the global marketwhere the Indian IT sector can make itsmark.Issues and challengesHowever, the past few years saw India’s ITindustry slowing down in its growth path,as it was affected by many challenges andissues. Single digit growth was experiencedby the industry in 2008, due to the financialcrisis that was starting to sweep the globeduring this period, prompting IT companiesto cut down on cost by stopping expansionwork and the hiring of new employees.The global financial crisis also resulted ina weakened US economy which translatedinto considerable appreciation of the rupeeand cutbacks in Federal Bank interestrates. This resulted in lower profit marginsfor most Indian IT companies. Aside fromthat, infrastructure developments also metwith a slowdown that affected the valuechain and Indian IT firms’ efforts in providingend-to-end solutions for their clientele.A recent Nasscom survey indicated a lot oftechnical deficiencies among new collegegraduates, leaving them unqualified to fillin the necessary skills required in India’s ITsector.But according to Kris Gopalakrishnan,CEO of Infosys Technologies Ltd, the IndianIT sector is headed for a growth rebound,with companies expecting to hire additionalstaff and employees. The top five companiesare expected to hire up to 180,000 newemployees during the next 12 months.On the rebound pathThe Indian IT industry has shown astrong example of continuous growth duringthe last 15 years, starting in 1993 withonly 150,000 employees, which then multipliedover the years to over 2 million employeesat present. The IT industry overallhas weathered the global economic downturn,exhibiting a recovery that is fasterthan what might have been expected.At present, 50% of IT companies havestrong plans of hiring additional manpowerand intend to reward existing employeeswith an 8% average in salary increases. Asthe economic outlook stabilizes in thecountry and worldwide, the recovery ofremaining IT companies will return themonce more to the growth path.Outlook for the Indian IT sectorThe high growth rate in the country’seconomy is attributed to the growing demandfor electronic hardware and softwareamong a new generation of young consumersand the middle class with significant disposableincomes and high buying powers.Software and services exports are expectedto breach the 60 billion dollar level by theyear 2012, which is incidentally also the lastyear of the recent five-year developmentplan.Several multinational companies are alsolooking towards India as an ideal geographicallocation to expand their global marketsand this would require Indian IT supportin terms of back office functions and othercritical operational processes. A-PFurther Reading:• Indian Expresswww.indianexpress.com• My Digital Financial Chroniclewww.mydigitalfc.com• Info Shinewww.info.shine.comCompanies Mentionedin this Article:• Infosys Technologies Ltdwww.infosys.com• Nasscomwww.nasscom.inNorebbo | Dreamstime.comEnergy efficiency is perhaps the mostimportant aspect to be discussed in all forumsas a customary way to cost-cutting.Realizing energy efficiency will be a toughtask without the deployment of Smart Gridtechnologies.The grid has transformed from a centralizedgeneration and control system, and atpresent incorporates centralized renewables(wind and solar). In the near future, the gridwill include residential and commercialgeneration, and in the long run, it will behighly distributed with a high penetrationof renewable sources that exhibit variablegeneration and non-dispatch-ability. SmartGrid can do more and it will be the driverof many businesses in the future, offeringmore opportunities than challenges.Clean technologies can ensure the successof Smart Grid. Investment in cleantechnologies reached $243 billion in 2010as compared with $186.5 billion spent in2009, according to Bloomberg New EnergyFinance. These investments include investmentsin renewable energy, smart gridequipment, and energy efficiency, amongothers. Industry experts feels that these ‘deployments’are on the right track.China is planning to spend $100 billionon smart grids and another whopping $600billion on electric grids in the next 10 yearsas part of its vision to overhaul power infrastructure.China has tied up with GEto focus on smart grid-enabled initiatives,including standardization of EV chargingtechnologies, grid scale energy storage integration,distributed resources, micro-gridsand more.The vehicle-to-grid market is likely toreach $2.25 billion in 2012 and $40.4 billionin 2020, according to GlobalData. Theexponential growth will be triggered bydeployment of smart grid, among others.Government stimulus, smart grid and EVdeployments in the U.S., China and Japanwill drive the vehicle-to-grid growth globally.Developing a viable vehicle-to-grid infrastructuredepends on the speed and costof smart grid implementations.Telecom service providers see smart gridas an opportunity to grab revenue streamsusing their wireless data networks. Serviceproviders will have an opportunity tomanage the data collection process fromcustomer meters on behalf of the utility.Telecom service providers like AT&T, for example,can earn one dollar per meter permonth for such an offering. This approachwill reduce the upfront investment a utilityOlivier Le Queinec | Dreamstime.comwould have to make to support a smart griddeployment.Creating awareness about this kind ofservice will be a key challenge for any operator.A utility’s communications needswill increase during a power outage. At thesame time, customers will also be usingservices to reach their families or friends.For this, additional bandwidth is required.Without offering a guaranteed bandwidthto the utility, the system will not work.Home area networks are an essential partof the smart grid. The main challenge isthat the home area network must automatethose processes. For this, telecom serviceproviders may expand their home networkingrole to include home energy management,enabling consumers to monitor variousdevices in the home, perhaps in parallelwith home security management and homeautomation.According to Pike Research, smart gridservice provider revenues will increase tonearly $6 billion in 2016 from $2 billionin 2009. There are several alliances in theoffing. AT&T has partnered with CurrentGroup, a smart grid sensor and softwarevendor, to integrate Current’s technologywith AT&T’s network management andwireless network management connectivity.AT&T is also partnering with Texas-NewMexico Power Company to offer wirelessnetwork connectivity for the latter’s $123Continued on Page 4326 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 27

ititTop TechSpendingPrioritiesin AsiaBy Anuradha ShuklaIn the wake of the recentglobal financial downturn,economies are slowlyrecovering and enterprisesonce more are shiftingtheir focus back to growthand restructuring but witha continued vigilance onmaintaining targeted costsand maintaining acceptableoperational efficiencies.Competition in most markets has risentremendously in a drastically changed businessenvironment, prompting enterprisesto adapt more effective business strategies,particularly in the area of information andcommunications technology (ICT) and to allocatetheir tech spending resources whereit would matter most.A recent survey conducted by GartnerExecutive Programs in 2010 took a peek atwhere 2,014 CIOs from across 50 countriesand 38 varied industries are focusing theirbudget priorities for 2011. The survey wasa comprehensive look at where tech spendingin various sectors is heading in order tosupport enterprise growth as well as takeon a more competitive advantage in themarket.The number of CIOs who reported an organizationalemphasis on growth supportedby budget increases for spending is threetimes as much as those who reported budgetcuts. These CIOs reported that at least 35 to50% of their operational resources would bereallocated to growth and innovation. Thisis a favorable change from previous businessscenarios where organizations allocateup to two thirds of their budgets to day-todayoperations and put little emphasis onbusiness strategy transformations. Creditthis change to the emergence of more costeffectiveInternet service technologies.A separate report from Gartner indicatedthat the Asia-Pacific region experienced thestrongest growth for tech spending in 2010and will most likely follow the same trendin 2011. But the changing emphasis oncost would encourage enterprises to focuson products and services that will providebetter business values for their needs andtransformational initiatives.Top tech spending prioritiesTech spending on information and communicationtechnologies among Asian enterprisesis expected to increase by 7.6% in2011. IT expenditures in 2010 were higherthough, as organizations slowly recoveredfrom the downturn in 2009. These organizationsexperienced budget freezes duringthat year due to the economic scenario.The recovery in 2010, however, usheredin renewed spending activities to accommodateprevious sidelined demands, whichincluded the need for replacements to oldhardware. Although only 7% of the global ITservices market is attributed to Asia, it willeventually account for at least 16% of totalglobal market growth that will occur duringthe next four-year period.2011 is projected to be the dawning erafor cloud computing services and clouddeployments, and related service offeringswould be the topmost tech spending priorityamong enterprises, whether the organizationis a small to medium company or amultinational corporation. Cloud computingis more than just a buzzword as it offersa new platform where businesses canmanage and optimize their systems andprocesses in order to increase business productivity.Cloud computing services will be usedby many organizations to redefine their ITmodels, leading to change on emphasis togrowth and strategic impact. These technologieswill fit in well with organizations’current resource realities as well as satisfythe need to adopt new IT infrastructuresthat provide similar services but with a significantlyreduced budget cost.Regional tech spending focusesAccording to International Data Corporation(IDC), a majority of businesses acrossthe Asia-Pacific region will be focusing on restructuringand expanding their businessesto gain a bigger share and penetration withSergey Gavrilichev | Dreamstime.comtheir respective markets. A vital part in thisexpansion move is to rely heavily on informationand communications technologiesas the main key to further business growth.This trend is consistent across various sectorsof the Asia-Pacific region as showcasedin the following:* Vietnam experienced a 24.9% growth inIT spending for 2010 and is expected to sustaina year-on-year growth of 17% in 2011.This high growth rate makes it the foremostmarket for IT spending in the Asia Pacificregion. Most of Vietnam’s economic sectorsare in a growth path and will requireheavy expansions with their IT investments.BPO services are also taking off as well as aprivate and government focus on developingbusinesses across the country particularlyin rural markets. Vietnam’s IT servicesis projected to account for the largest ITspending contribution, with an estimatedgrowth rate of 18.5% year-on-year which isexpected to exceed $347 million. Other contributorsinclude hardware spending at 17%year-on-year, followed by packaged softwareat 14.4% .* The Philippine market continue to berevitalized and will sustain ICT spending recoveryfrom last year, continuing to experiencegrowth with a forecasted technologyspending of $3.63 billion towards the endof 2011. This can be attributed to the politicalstability and dynamic direction of theeconomy which is steering the country towardsa 12% compound annual growth rate(CAGR) until the year 2014. Consumers andenterprises will most likely be more willingto spend and ICT vendors are jumping intothis joyride by increasing their marketing efforts.CIOs, however, will place more importance on theability of these ICT vendors to deliver critical businessupshots.* The Asia-Pacific economic giants China and Indiawill likewise continue to be strong on IT spendingafter the manufacturing and supply chain industriesrecovered in 2010 in the wake of the global financialdownturn. In China, companies will choose IT technologiesbased on mobility and services type models,with a focus on a larger channel reach that willgo beyond existing customers.Future trends for tech in AsiaAccording to a recent global study by IBM onmore than 2,000 medium-sized companies spreadacross 20 nations in the Asia-Pacific region, morethan half of respondents are planning to increasetheir IT budgets within the next 12 to 18 months.These companies will be investing in several variedtech priorities with 70% actively pursuing better analyticstechnologies that will give them a better understandingand insight about their customers. Thedata accumulated from these analytics technologiescan help them become more efficient and make better-informedbusiness decisions.Aside from analytics, other tech spending prioritiesby mid-sized companies include collaboration,cloud computing, customer relationship solutions,security and mobility. Most critical IT prioritiesamong these companies include security, CRM, andinformation management. These companies wouldalso like to address pressing IT issues such as the difficultyof acquiring technology solutions as well asdeployment of these programs. Another issue thatthese companies are facing is the lack of qualified ITskills and resources.At least two-thirds of these companies havestarted or are planning to deploy cloud computingtechnologies in a quest to improve their informationtechnology systems managements, while atthe same time lowering their IT costs. Companiesexpect to gain other benefits from cloud computingaside from cost reduction, and this includes betterIT management, improved system redundancy, andhigh availability% ages.The IBM study also showed that at least 53% ofthe respondents are expecting an increase in theirIT budgets within the next 12 to 18 months. 75% ofthese companies are planning to improve the performance,security and reliability of their IT systemsthrough much-needed upgrades in hardware andsoftware. At least 70% of these companies are planningto have a consultative relationship with theirprimary IT providers instead of maintaining thepurely transactional relationship that they traditionallyhave.The IBM report is consistent with the IDC findingsthat most of these businesses are shifting away fromtheir earlier focus on cost reduction and efficiencyimprovement and will evolve into expanding theirbusinesses to new heights and increase their rolesas igniters for economic growth. These businessesare looking at information technology as their mostessential tool to improve their connection with customers,gain greater business insights, and achievebigger business growth in the long term.Software is also seen to be the fastest growingsegment for IT spending in the Asia-Pacific at 11.3%for the period until 2014 according to Gartner. Hardwarefollows at 10.1% , IT services at 9.3% and telecommunicationsat 7.6% . Healthcare, utilities andeducation are seen to be the top vertical industriesthat will usher in a strong growth for tech spendinguntil the year 2014. This report from Gartner alsoindicated that Asia will spearhead the growth in enterpriseIT spending andContinued on Page 45Enterprise IT Spending inAsia-Pacific to Grow in 2011By Kevin Liu2010 proved to bebetter than expectedas globaleconomies slowly rosefrom the onslaughtsof the recent globalfinancial crisis.This trend holds true even forthe global IT industry, which registeredan 8% year-to-year growthand with enterprise spendingreaching levels of up to $1.5 trillionworldwide - the fastest growthrate registered since 2007.In a report from Gartner’s seniorvice president and globalhead of research Peter Sondergaard,this global scenario appliesto the Asia-Pacific Enterprise ITspending arena, which reboundedfrom a 1.3% decline in 2009 andis expected to increase by 7.6%in 2011, with forecasts valued at$312.3 billion. Sondergaard presentedthis latest outlook at theGartner Symposium/ITxpo in Sydneywhich was attended by morethan 1,500 global IT leaders.IT spending trendsin the Asia-PacificJust like other global economies,Asia-Pacific enterprises experiencedsevere budget freezesin 2009 in the wake of the globaleconomic downturn. Thingswent better in 2010 as new lifewas brought back to IT spendingto satisfy earlier sidetrackeddemands as well as the need toreplace old hardware. Australia,which suffered a 5.3% decline inenterprise IT spending in 2009,enjoyed a strong year in 2010 andis slowly recovering at a modest2% growth.China and India, which experiencedtremendous growth inthe manufacturing and supplychain sectors despite the negativeimpact brought about by theglobal economic slowdown, arestill showing signs of not lettingup in the growth trend whichthey enjoyed in 2010 and whichis expected to be carried over to2011. Similar trends are being experiencedin the rest of the Asia-Pacific as well as Australia.Enterprise IT spendingfocus in 2011 andbeyondIn the global scenario, enterpriseIT spending by financial servicecompanies and institutionsis forecasted to undergo a 3.7%growth rate in 2011 over the previousyear, with values reachingmore than $363.8 billion. Asia-Pacificenterprises, which currentlyaccount for more than 26.4% ofglobal enterprise spending, wereseen to register the fastest growthrate among financial services institutions,at 6.2% CAGR.However, according to Gartner’sgrowth forecasts for the2011-2014 period, the fastestgrowth rate in the Asia-Pacificregion is expected to come fromthe software sector, forecasted at11.3%. Other IT segments are alsoforecasted to register an increasein growth rates, with hardwareleading the pack at 10.1%, followedby IT services at 9.3% andtelecommunications at 7.6%.According to Gartner’s report,enterprise IT spending by emergingeconomies, particularly onhardware, is slowly outpacingspending rates by more developedeconomies in the west. Evenwhile the region represents onlya small amount of the global ITmarket at 7%, analysts foreseethat hardware spending in the regionwill eventually surpass thatof the west by the year 2012.Vertical industries will also be akey factor in enterprise IT spendinggrowth in the Asia-Pacific region.Among vertical industries,the healthcare sector shows thehighest potential for growth upuntil 2014, spurred by the influxof government stimulus funds invarious Asia-Pacific economies.Aside from healthcare, utilitiesand education are other verticalindustries that are expectedto register the strongest growthrates in the Asia-Pacific. A-PFurther Reading:• India Timeswww.economictimes.indiatimes.com• Global Print Monitorwww.globalprintmonitor.com• Deccan Heraldwww.deccanherald.comCompanies Mentionedin this Article• Gartnerwww.gartner.com28 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 29

ititRiding theAsian TabletBandwagonBy Ding DingThe tablet PC has grownin tremendous popularityacross the globeand is fast becoming a preferredmobile computingchoice in emerging marketssuch as Asia.According to the technology researchcompany Gartner, the tablet PC is verypopular among people who already have apersonal computer or laptop in use as theirmain unit but who want an efficient portablecomputing device that they can bringanywhere.A similar consumer survey performed byNielsen Global in Taiwan showed that 36% ofrespondents already have a tablet PC or areplanning to purchase a unit of their choicein the near future. Tablets like Apple’s iPadand Google Android tablets feature fasterInternet connections than laptops, makingthem more appealing to people while onthe go.The surveys also indicated that tabletswill not totally replace the personal computeror laptop, nor do users rely on tabletsas their sole computing device. Despite theirportability, tablets are not suitable for usewhen you want to type something, a functionthat is more suitable for laptops or netbooks.The tablet PC is in a totally differentcomputing class, and is suitable for specificcomputer needs such as online research orreading content.The following is a brief look into tabletcomputers from an Asian perspective, itsappeal to the market and how major computerindustry players are jumping into theAsian tablet bandwagon, thereby settingthe future for mobile computing in the regionin the coming years.The tablet PC’s appealto Asian consumersAside from their portability and uniquecomputing features, tablet PCs have grownin appeal among Asian users, whether froma personal, commercial or business perspective,due to other elements in people’s dayto-daycomputer usage behavior where tabletswould form a perfect fit. The followingdescribes some of these elements that maketablets appealing to Asian consumers.* Social media networking and applicationscontinue to grow in leaps and bounds.The tremendous popularity and widespreadusage of networking sites such as Facebook,LinkedIn and Twitter in Asia have madesocial media evolve from being mere fadsto becoming intrinsic parts of people’s personaland business lives.* Social media has also penetrated thebusiness realm and has transformed howenterprises interact with their customers.Tablet PCs are an integral part of the socialmedia revolution and will continue to be soas users increase their personal or businesssocial media footprint.* Market analyst XMG Global reportedthat more than 30% of small and mediumsized businesses in the Asia Pacific are expectedto start making promotional campaignsthrough the social and mobile networkingplatform. This figure is lower thantheir counterparts in the United States andEurope particularly with large corporationswhich tend to be more conservative in thisarea and would not commit to integratingsocial media as part of their core business infrastructure.The popularity of tablet PCs willplay a major role towards this integration.* The wide diversity of applications intendedfor the tablet PC has evolved frommere personal applications into becomingmainstream business tools. The appealof these applications does not necessarilyhinge on which would provide more complexor more technical processes, but onwhich tablet platform would provide thebiggest selection of useful applications thatare both relevant and easy to use. Duringthe next 3 to 5 years, other online servicessuch as eBooks, video conferencing andWeb TV will be made more available to theAsia Pacific region which will increase thepopularity of tablet PCs much further.* Mobile unified communications in realtimethrough tablet PCs will have a compoundingannual growth of 19% throughthe periods beginning from 2011 until2013, according to the same survey fromXMG Global. This includes chat, video conferencing,VoIP communications, and otherweb conferencing functionalities on top ofstandard communication channels such asSMS and email.* The influx of next-generation tablet devicesthat feature more advanced applicationssuch as corporate computing wouldprovide further appeal to tablet computers,which is expected to catapult sales duringthe next couple of years. Although tabletswill not be a replacement for desktop andlaptop computers, they will continue togain a bigger market share in the Asiancomputer market in the coming years.Gareth Ladley | Dreamstime.comTablet PC marketperformance in AsiaA previous report from InternationalData Corporation (IDC) indicated a tremendousgrowth for tablet computer shipments,starting with 1.3 million tablets in2009 which is projected to grow at a compoundannual growth rate (CAGR) of 65%and which will reach projected figures of upto 9.6 million by the year 2014. This growthis expected to converge on three majormarkets, particularly Australia, Hong Kong(China) and Singapore.The launch of Apple’s iPad early in 2010was received with great interest amongChinese consumers and generated morethan 600,000 units in sales in 2010. Thereception was so tremendous that Appleis currently facing a shortage of units thatcan supply tablet computer demands in theChinese market. These figures are less thanone-tenth the market of cellular phonesand notebooks but market analysts believethey will increase exponentially along withfurther developments in tablet computersthat would make them more convenientfor mobile personal computing and businessmarket applications.The iPad will continue to be the hottestselling device tablet device in 2011, commandinga 15.9% share of the global personalcomputer market with an expected 25million units in sales. However, new tabletcomputer players will also enter the Asiantablet bandwagon. These include majorpersonal computer brands releasing theirtablet computer versions in various operatingsystems and platforms, as well as localAsian brands, such as tablets from TaiwanesePC vendors, that are projecting sales ofup to 5 million units this year.Emerging tablet PCtechnologies in AsiaThe growing popularity of tablet computersworldwide and the influx of emergingtablet PC technologies will provide a positiveimpact to both the global and Asianpersonal computer market in 2011 and inthe years to come. Other global computerbrand manufacturers such as Acer, Asus,Dell, HP, Lenovo, Huawei and Samsung,among others, will try to follow in the wakeof Apple iPad’s success, jumping into thetablet competition with a fresh offering ofnew models. Consumers will have their firstlook into these devices during the first halfof 2011 as they continue to penetrate themarket in the succeeding months.The new models that will see release in2011 will feature new designs and configurationsas showcased in recent consumerelectronic tradeshows held across the globe.Tech and gadget enthusiasts from Asia willhave their fill of features and functions suchas virtual keyboards, multi-touch screens,wireless adapters, networking features, officesuites and a host of other applications.Although industry experts see that tabletcomputers will not immediately become amainstream replacement for laptops andnotebooks during the next couple of years,tablet computers will take a larger piece ofthe personal computer market pie. Netbooksare expected to experience significant decreasein sales as tablets become a more preferredmobile computing platform. Althoughthere are several pros and cons between netbooksand tablets, many people prefer theincreased portability and sleek design of thetablet without the keyboard, particularly iftheir web activities are mostly focused onweb surfing and social networking.Experts also see tablets giving a deathblow to Kindle and other electronic readers.eBook functionalities are an intrinsic60% Growth inLaptop DemandSeen in GujaratBy Reena SaxenaComputer literacy isdefinitely picking upin pace in the stateof Gujarat as reported byindustry experts here justrecently.According to Ahmedabad Computer MerchantsAssociation, or ACMA, the demandof personal computers is growing at approximately15 percent, while the laptopmarket indicated an astounding 60 percentgrowth rate.According to Kirit Thakkar, presidentof ACMA, this growth is attributed to theincreased demand in Tier-II and Tier-III citiesin the state, as well as higher marketpenetration in smaller towns. This growthin computer demand is an indication of adynamic business atmosphere coupled withgrowing literacy even in remote areas of theregion.Computer use anddemand in GujaratThe increasing growth rate for computerand laptop demand in Gujarat has translatedto more than 20,000 PC sales and 11,000laptop sales per month. These figures are expectedto grow even higher during the forecastedfuture. This is in line with the growingneed to use Information Technology, aspart of tablet computers but they featurea broader computer power than what pureeBook readers can offer. Most users wouldnot see it wise to maintain two separate devicesthat can perform similar functions, atleast in electronic reading capacities.The future of the tablet PCmarket in AsiaIndustry experts are seeing a tremendoustake-off for tablet computers in 2011 worldwideand particularly in the Asia-Pacific region,with figures soaring up to 212% withan expected 38.31 million tablets in sales,up from the 12.28 units sold during the previousyear. China’s tablet PC market, on theother hand, will experience a tremendous300% growth as the tablet market will seeexpanded penetration in low-tier cities andother rural areas in the country.The Asian tablet computer market willshowcase a fierce all-round competitionboth from major computer retailers andproviders of operating systems. On topof that, mobile operators are slowly movinginto the 4G network realm in the nextfew years, which will make tablets an evenmore strategic mobile personal computingtool for personal and business use.Experts are optimistic about the longterm potential of the tablet PC sector in theestablished in a previous study conductedby Asst. Professor Prayatkar K. Kanadiya andInformation Scientist Atul K. Akbari.Their report, which was part of the InternationalConference on Academic Libraries(ICAL-2009), revealed that people from thestate are benefitting much from the Internetservices provided in the Gujarat Vidyapeethlibrary. The study concluded amongother things that:• 93.75 percent of the student bodyprefer to use the Internet• 44 percent of students are using theInternet for about 1 to 2 hours perday• 42.27 percent have used the Internetto support their academic requirements• 33.33 percent are satisfied with theiruse of the Internet, e-Books, and e-Journals• 57.78 indicated that the Internethelped improve their intellectualand logical developmentpersonal computer industry, despite themany challenges and roadblocks that themarket will face. As this personal computingplatform continues to gain manufacturingsupport from both branded and localcomputer manufacturers, all wanting tojump into the Asian tablet bandwagon, theAsian computer market will continue to experienceeven greater strides in the tabletarena in the months and years to come. A-PFurther Reading:• Electronics Manufacturing Asia Magazinewww.emasiamag.com• What’s On Xiamenwww.whatsonxiamen.com• PC Worldwww.pcworld.comCompanies Mentionedin this Article:• Apple Inc.www.apple.com• International Data Corporationwww.idc.com• XMG Globalwww.xmg-global.comSupport from computermanufacturersAmong top computer manufacturers, LenovoIndia is providing the biggest supportfor computer manufacturing in the state,which is seen as a growing industrial andbusiness hub where producers want to havea strong retail presence for their products.At the national level, Lenovo is holding thefourth spot among the top computer brands,which include Acer, Dell and HP, and it alsoholds approximately 9.2 percent of the marketoverall. In Gujarat, Lenovo is enjoying ahigher market share at 20 percent.Lenovo has already worked with a chainof IT retail stores called e-Mall, which is promotedby Sai InfoSystems (India) Ltd, but thecompany is aggressively planning to penetratemore areas in the state and is exploringanother partnership with Ahmedabad-basedAegis Infoware Pvt Ltd. Lenovo is planningto roll out 20 LES Lite, or Lenovo ExclusiveStores, in an extensive plan to increase retailpresence in the state and in the country.What the future holdsfor GujaratThis high confidence from top-brandedcomputer manufacturers spells a good futurefor the market in Gujarat. The demandin small towns is promising and indicatessome of the highest growth rates. This scenariois true not only in Gujarat but in therest of the country as well, with approximately10 million units sold each year. Thisis expected to close the gap with China’scurrent computer market within the nexttwo years. A-PFurther Reading:• Business Standardwww.business-standard.com/india/news• India Timestimesofindia.indiatimes.com• International Conference on AcademicLibraries (ICAL-2009)crl.du.ac.in/ical09Companies Mentionedin this Article:• Ahmedabad Computer MerchantsAssociation (ACMA)www.acmaindia.com• Lenovo Indiawww.lenovo.com/in/en• Aegis Infoware Pvt Ltdwww.indiamart.com/aegisinfoware• Sai InfoSystems (India) Ltd.www.saicare.com30 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 31

ititIs Asia Readyfor M-Banking?By Reena SaxenaWith the complexprocesses involvedin today’s financialand banking environment,one could scarcely imaginewhat the banking systemwould be nowadays withoutthe power of the Internet.Taking this a bit farther, in a world drasticallychanged by the mobile phone, onewould reasonably expect that something asimportant as financial and banking servicescould be transacted through their mobiledevices.Until recently, when people hear theterm mobile banking, what came to mindwould be something along the lines of viewingtheir balances or their bank accountsthrough SMS messages. But advancementsin mobile phone technologies have evolvedthese devices from being mere gadgets forcalling or texting into pocket-sized computers,making them ideal tools for mobile personalbanking, or even mobile enterprisebanking.But is the world, or more specificallyAsia, ready for mobile banking, or M-banking?A recent survey form KPMG global indicatedthat more and more people are gettingmore comfortable about using mobiledevices and technologies for banking andother financial transactions, promptingseveral financial institutions to forge aheadand adapt this technology.Several financial institutions in Asia however,are still wary about fully implementingM-banking and offering this particularservice to their clientele due to a wide varietyof issues and considerations. One ofthese reasons is to first assess whether thereis a real and proven need for it, in light ofseveral conflicting views about the benefitsof M-banking.The following provides a brief look intoM-banking in Asia and how it is affecting financialinstitutions and the Asian populacein general.Robin Lund | Dreamstime.comWhat is m-banking?M-banking, or mobile banking, is basicallyfinancial or banking transactions (eg.transferring money from one account to another)through a mobile phone or device’sweb browser. An application is providedwhich users can access through their webenabledmobile phones or smart phonesand serves as the financial institution’s webfrontend portal. Users can access their bankaccounts through this application and conductwhatever financial transactions theyrequire. Banks can also send account balancesor financial statements to the usersthrough this application.Another variation of M-banking is whereusers access their bank’s online portal bytyping in the proper address on the phone’sweb browser. The user is then redirected to asecured gateway where users can gain accessto their accounts. According to financial institutionsalready providing M-banking services,customer details will not be stored onthe users’ phones for security reasons.In some variations, the phone is registeredwith the bank and will require no additionalpassword or account details upongaining access. They can also perform transactionsvia SMS using specific keycodes. Incase of lost or stolen mobile phones, theM-banking services will immediately beswitched off upon user deactivation of theirSIM cards.Requirements for m-bankingThere are certain issues and prerequisitesthat should be taken into considerationbefore a particular financial institutioncan offer M-banking to their customers.Still, banks and other financial institutionsshould implement innovative solutions thatwill provide their clients with the best userexperience, and addressing these issues andchallenges would be the first logical step inthis regard.The following highlights some of theseconsiderations and financial institutionsare now seriously looking into these itemsbefore finally making the switch to M-bankingfor their clients.* Banks should make it clear to theirclients that anyone availing of M-bankingservices and/or installing apps on theirsmartphones would still have to shoulderstandard messaging and usage fees withtheir mobile carrier.* Client phones should be enabled orsupport the M-banking apps as well as SMSbanking services that the banks would offer.More advanced M-banking services requirephones to be Java-enabled and preferablyequipped with an active General Packet RadioService, or GPRS, capability. GPRS is ahigh-speed packet-switched digital data servicechannel that uses GSM technologies, allowingbanks and users to have a dedicatedand circuit-switched channel for a more securedconnectivity.* Financial institutions should understandthat their core business is not InformationTechnology or telecommunications. Giventhis fact, they may not be able to integrateM-banking to their services on their own accord.They should work with experiencedexperts from the mobile phone sector tohelp facilitate installation and implementationof M-banking.* Maintaining high levels of security is amain point of focus. It is a proven fact thatmobile phone users are faced with the possibilityof losing their phones or having theirunits stolen during day-to-day use. In somecases, users tend to change phones and othermobile devices as fast as new models comeout in the market and would often neglectremoving or deleting vital financial informationon their mobile devices. Financial institutionsshould address these potential concernsand establish plans that would ensurehigh levels of security for their clients.* Customers going into various bilateralcommercial agreements with multiple mobilenetwork operators are a cause for concernthat financial institutions should face.They should define and provide solutionsthat minimize this need and provide a betteruser experience for their clients.* Financial institutions should also lookinto different outsourcing models that theycould tap for their M-banking services. Aservice provider that specializes in telecommunicationscould provide them with themuch needed expertise to handle technicalsupport for their M-banking services.* M-banking is a new concept for manyAsian economies. This fact should be clear tofinancial institutions particularly when puttinginto considerations existing standard,regulations and other governance models.M-banking trends in AsiaCurrently, only about 5% of all mobilephone users are subscribed to mobile bankingand a mere 0.5% of subscribers are activelyusing these services. This low usagearose from concerns about privacy and securityin conducting financial and bankingtransactions through their mobile phones.But according to the KPMG Consumers andConvergence survey, an increasing numberof consumers are rapidly integratingM-banking into their day-to-day lives, and2011 may be the year when people chooseto transform their banking habits and gomobile.In the KPMG survey, the number of consumersusing mobile phones for online retailhas grown to 28% worldwide and 41% inthe Asia Pacific - more than 3x the numberfrom previous surveys. But what is notablefrom this survey is that 46% of respondentsclaimed to have used their mobile devicesfor M-banking, 44% of whom came fromthe ASPAC region and who indicated thatthey have used their phones for M-bankingat least once a month. This is significantlyhigher than the number of respondentsfrom the United States and Europe.Accenture has also commissioned studiesconducted on 20 financial institutions acrossthe globe to assess the impact of M-banking,and the results were certainly laudable. Thestudy highlighted one Middle Eastern bankthat generated a 300% return of investmentafter allowing their clients to pay utility andother bills using their mobile devices. Similarresults were achieved by another bankin the Asia-Pacific, which realized a 230%return of investment after launching theirown mobile banking services.According to KPMG, M-banking has abetter chance of taking off and achievingsuccess in the Asia-Pacific region as comparedto Europe because of the inherentapathy and lack of trust from Europeanbanks. The potential for M-banking inAsia-Pacific is high because of the highlevels of mobile phone usage penetrationto a very large population base, such asthe 60% mobile phone penetration that isexpected to be reached in India by the endof 2011.Asian banks are starting to roll out theirM-banking services and have already initiatedSMS banking by providing SMS alertsabout credit and debit information as wellas check status for their clients. Many ofthese financial institutions have alreadytapped mobile phone and cellular networksand have come up with a Memorandum ofUnderstanding and other agreements formobile financial and banking products andservices.The future of m-bankingin AsiaSeveral financial analysts and expertsare predicting a great future for M-bankingnot only in the Asia-Pacific but across theglobe. Juniper Research is one such institutionthat predicted that mobile phonebanking would revolutionize the bankingand financial services in a similar mannerthat ATMs revolutionized the sector severalyears ago. The analyst firm predictedthat by 2011, US $587 billion worth of financialinstructions would be generated byover 612 million mobile phone subscribersworldwide.A similar forecast was given by Berg Insight,indicating that mobile phone bankingusers will grow to 85 million in theUnited States and 115 million in Europe bythe year 2015, while total worldwide usagewill grow to 913 million by the year 2012with a CAGR of 89%. Asia-Pacific will accountfor up to 65% of total users and willbe the most important market. Accordingto KPMG, M-banking will have the biggestopportunities in China, India, Indonesiaand the Philippines, while strong adoptionrates will also occur in Thailand, Malaysiaand Vietnam.These figures indicate that mobile phonesand devices will be a primary digital mobilechannel for banking and financial servicesand will usher in the next generation ofthe modern financial system, a trend thatis fast becoming a reality in the Asia-Pacificregion. A-PFurther Reading:• Scream Newswww.screamnews.com• Business Standardwww.business-standard.com• Bank Systems Technologywww.banktech.comCompanies Mentionedin this Article:• Juniper Researchwww.juniperresearch.com• KPMGwww.kpmg.com• Accenturewww.accenture.comContinued from Page 25is what China does, as does its North Koreanneighbor.Which is really what the point of the articleis about. North Korea is the most successfulgovernment in the world if you viewsuccess as controlling the people’s abilityto communicate with each other and theoutside world. The second most successfulcountry would be China, which has extensivelytried to censor and control its Internetinfrastructure for many years. China andEgypt have been linked together recentlyby the actions of a few Chinese calling for aJasmine Revolution, which refers to Egypt’srecently successful regime change. Chinesecitizens were taken away after laying downhundreds of white jasmine flowers outside apopular McDonald’s in Beijing, along with alarge crowd of unorganized yet agitated individuals.Online calls for more protests arebeing censored as soon as they can be, andyet it is imperfect. China has been preparedfor this eventuality for a long time. They aredoing their best to nip things in the bud,and avoid going down the path that Egypthas gone. However, the Internet, by whichI mean the people on it, is showing itselfagain and again to be an uncontrollableforce. Governments like China can maintaincontrol now, but I do not think theycan maintain control forever. The Internetis the people, and the will of the people cannotbe contained by laws, or regulations, ortechnical restrictions – it always comes outahead in the end. One might as well be tryingto hold back the ocean with their ownhands. A-P32 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 33

ititAsian MobileCloud ServicesEmergingin 2011By Vijay AsthanaThe tremendousincrease in salesfor smartphonesand tablet computers isa clear indication of theirgrowing popularity amongconsumers.Sales of mobile computing gadgets havealready overtaken global sales of personalcomputers in 2010. Mobile gadgets, whichinclude tablets, notebooks and netbooks,accounted for 61% of the overall PC market,while the remaining 39% referred to desktopcomputers. This wide gap in global salesis expected to increase much further andwill hit the 75% mark by the year 2014.However, these portable computing deviceshave inherent hardware limitationssuch as small storage, limited processingpower, slow speeds and poor security featuresthat make them inappropriate forenterprise and business applications. Exceptfor minor business-related functionsprovided by apps, core business processesand applications which require more complexresources cannot be made availablethrough these mobile gadgets. However, relatedbusinesses continue to expand globally,and this includes deployment of remotestaff and employees that would require constantcommunication with headquartersand their resources.This prompted third-party vendors totake advantage of this need while riding themobile popularity wave by providing mobilecloud services to enterprises across variousmarkets and industries. Through mobilecloud services, enterprises can now haveaccess to sufficient computing and storagecapabilities in a secured platform throughtheir mobile devices.This move towards mobile cloud servicesis spurring a 9.4% growth for the IT servicesmarket in the Asia-Pacific region that is expectedto grow in momentum throughout2011 and beyond. The following is a brieflook into the current trends and directionsfor mobile cloud services in Asia and howit will revolutionize enterprise InformationTechnology this year and in the years tocome.Mobile cloud servicetrends in AsiaCloud computing has taken on a stronggrowth path in the Asia-Pacific region andreached figures of up to 1.1 billion US dollarsin 2010, according to the InternationalData Corporation (IDC). Most of these deploymentswere focused on Software as aService, or SaaS, among others. Singaporecontinued to be the region’s main cloudcomputing hub, mainly due to its large presenceof multinational companies as well asa strong broadband infrastructure support.These figures from IDC were confirmedin another study conducted by SpringboardResearch, which also reported acceleratedgrowths for cloud computing in the Asia-Pacific region for the year 2010. The reportfrom Springboard indicated that up to 45%of enterprises in the APAC region, excludingthose from Japan, have either adoptedcloud computing deployments or are planningto move to these services in the verynear future.These figures fared a lot better thanIDC’s previous pronouncements in 2009that growth in the IT services market wouldslow down due to existing global economicconditions. IDC pointed out back then thatenterprises are focusing less on businesstransformation and are shifting their attentionto balancing cost savings. Economies,however, slowly recovered in 2010, givingmarkets a valuable chance to rebound andrecover.With economic recovery on the horizon,businesses in Asia are renewing their earlierefforts for enterprise transformation thatwere stalled during the global financial slowdown.This shift would push further growthfor IT services markets, as most Asian enterprisesare now exploring the benefits ofend-to-end managed services, particularlywith the need to increase their competitivenessin a changing market environment aswell as to strengthen their infrastructurefor compliance and disaster recovery.The pressure to reduce capital expendituresis still a top priority among Asianbusinesses, and many would opt for moreinnovative but cost effective solutions tothe various enterprise needs that their businesseshave. This will make cloud computingand other outsourced services a moreviable option for these budget-consciousenterprise IT executives.Saniphoto | Dreamstime.comChallenges and opportunitiesAs smartphones and tablet computerstake center stage in the personal computingarena, several issues and challengeshave been emerging, particularly for Asianenterprise and business users, broughtabout by the several limitations in hardwareand performance. A primary concernis mobile security and privacy as well as virusprotection. As the number of users ofsmartphones and tablets grow, so will theproliferation of viruses and malware aimedat smartphone and tablet platforms and operatingsystems.This poses an excellent opportunity forcloud computing services, according to analystfirm Frost & Sullivan Asia-Pacific. Thesethird-party firms can offer various securityservices such as virus protection and remotewipes, particularly to enterprise usersof these devices. On top of that, cloud computingservices can extend the limited capabilitiesof mobile devices such as providingvirtual memory capacity and increased processingspeed.However, Frost & Sullivan pointed out thatmany mobile carriers in the Asia-Pacific regionare slow in capitalizing on these needsfor cloud computing services and providingsuch services to their clientele. This can beattributed to several security concerns andissues raised by enterprise executives overcloud computing deployments. However,as more Asian CIOs and Senior executivesinvolved in the IT-decision-making processgain a clearer understanding of how cloudcomputing can be relevant and applicableto their businesses, more and more enterpriseswill be initiating the move towardsthese outsourced systems.Another challenge to cloud computingservices in the Asia-Pacific is that manyemerging markets are still lagging behindin their mobile Internet service infrastructuresand availability. These markets includeThailand, Bangladesh and Pakistan,where no 3G licenses have been issuedyet. The governments in these countriesare still in the process of being convincedabout the merits of higher Internet penetrationwith their populace and how thiscan positively impact their gross domesticproduct.Analysts are predicting that these bureaucraticdelays in the issuance of 3G licenseswill continue to drag on throughout 2011and might probably be carried over untilthe first half of 2012 or even beyond. Oneoption for these markets is to adopt LTE,or Long Term Evolution, or what is morecommonly called 4G, should 3G license issuancecontinue to struggle with regulatoryred tape. The problem with 4G, however, isthat consumer gadgets using these technologiesare still not very affordable in thesecountries.Despite these challenges, Asia-Pacific operatorsoffering cloud-based enterprise servicesthat offer scalable and more efficientsolutions will find new revenue streamsin the coming periods as they continue topenetrate most levels in the IT value chain.The future of mobilecloud services in AsiaThe continuous decline of smartphoneprices and the increased richness and functionalityof various available applicationswill be the keys to the tremendous growthin sales projected for 2011 and beyond.Smartphones account for almost 20% of totalmobile device sales and this is forecastedto reach 100 million in 2011 with a potentialto hit 500 million by the year 2015 andthus gain 60% of the mobile market accordingto Frost & Sullivan.The analyst firm also predicted that tabletcomputers will overtake other portablecomputer devices in 2011 and will be themain computing tool of choice for variousonline activities. These figures coincidewith a separate report from the YankeeGroup, which predicted tablet sales revenuesto reach US $46 billion by the year2014, with the Asia-Pacific region accountingfor 58% of worldwide sales.With this increase in web-connectedmobile devices and the maturity of cloudcomputing services, 2011 and the comingyears will usher in a new era for both publicand private cloud deployments. Gartnersupports this by predicting that by the year2012, new demand and deployments ofmanaged IT infrastructures will be basedon utility and cloud-based deployments.Spending for cloud services in the Asia Pacificregion will grow by as much as fivetimes from 2011 onward, with small andmedium-sized business taking a large pieceof the pie.Larger enterprises, still fearing securityrisks from the cloud environment, willadopt private cloud computing models intheir infrastructure that will work in parallelwith their legacy IT infrastructures andenvironments. Traditional IT service providersare also riding on the emerging cloudservices wave in the Asia-Pacific by activelyreinventing their own infrastructures andprepping themselves for this coming cloudrevolution. This will rely heavily on theirexisting partnerships and customer base,who will also most likely commit to thischange.Small and medium sized enterprises areprojected to take a large part of this growingdemand for cloud services, especiallySaaS applications. However, these applicationsstill have limited customization capabilities,making them less appealing forlarger enterprises, particularly with regardto adopting them for their core processesand application. Large enterprises, however,still use SaaS applications, but are limitingtheir use on non-core systems.According to Frost & Sullivan, SaaS willcontinue to be the dominant segment inthe Asia-Pacific cloud environment, capturing90% of the market, and it is expectedContinued on Page 47Nokia-Microsoft Deal:Innovation in the Offingby Rajani BaburajanThe Microsoft-Nokiaalliance that wascreated towards enhancingthe phone marketshare of these twotechnology giants looksset to pave the way forinnovations in the mobilephone market.To thwart competition from this alliance,Apple and Android will moveto strengthen the presence of theirinnovative phones. Other phone majorswill follow suit with new businessmodels, with Nokia in a position to gofor cost effective mass production.“Ecosystems thrive when fueled byspeed, innovation and scale. The partnershipprovides incredible economiesof scale, vast expertise in hardwareand software innovation, and a provenability to execute,” said Steven A.Ballmer, Microsoft CEO.Industry feels this is the right decisionby Nokia’s CEO, who joined thehandset major after working withMicrosoft. Nokia is facing challengesfrom major smartphone makers invalue markets and regional players involume markets.In 2010, Nokia’s mobile phone salesto end users added up to 461.3 millionunits, declining by 7.5% in marketshare from 2009. RIM’s mobile phonesales in 2010 reached 47.5 millionunits, showing an increase of 38.2%,according to Gartner. Apple sold 46.6million units in 2010, registering an87.2% rise from 2009.“There were few short term optionsavailable to Nokia to help it get backon terms with Apple and especiallythe Android masses, which in 2011look set to overtake Nokia in termsof smartphone shipments,” said TonyCripps, principal analyst of Ovum.According to Gartner’s third quartersmartphone data, Android accountedfor 25.5% of worldwide smartphonesales, increasing 3.5% from the samequarter in 2009. Apple’s iOS droppedfrom 17.1% in 2009 to 16.6% in 2010.Symbian took the top spot with 36.6%of sales.Nokia and Microsoft will jointly createmobile products and services designedto offer consumers, operatorsand developers more choice and opportunity.Additionally, Nokia and Microsoftplan to work together to integratekey assets and create completelynew service offerings, while extendingestablished products and services tonew markets.“Today, developers, operators andconsumers want compelling mobileproducts, which include not only thedevice, but the software, services, applicationsand customer support thatmake a great experience,” StephenElop, Nokia President and CEO, said.The main threat will be not only toApple but also to Google and Yahoo.Nokia will adopt the Windows Phoneas its principal smartphone strategy.The handset major, which is seeingerosion in its market share, will contributeits expertise on hardware designand language support, helping tobring Windows Phone to a larger rangeof price points, market segments andgeographies.Bing will power Nokia’s search servicesacross the Nokia line of devices.Microsoft adCenter will provide searchadvertising services on Nokia’s line ofdevices and services. Nokia Maps willbe a core part of Microsoft’s mappingservices.The market is going to see morecompetition and price cuts in comingmonths, while innovation - both intechnology and business models - willbe the focus area for handset majors.Summary: The recently announcedNokia-Microsoft deal will pave theway for the introduction of more innovativedevices. The deal is a threatto Google and Apple, who are emergingto the dominant position, rivalingNokia and Microsoft in the handsetarena.The deal may force Nokia to becomea captive business for Microsoft’s Windowsplatform. However, Nokia shouldnot focus only on one platform sincecustomers prefer the availability ofNokia phones on multiple platforms.Following the deal, Microsoft willleverage the mass-production capabilitiesof Nokia and the combined forcewill surely emerge as a threat to otherplayers in the market. A-PCompanies mentionedin this article:• Nokiawww.nokia.com• Microsoftwww.microsoft.com• Googlewww.google.com• Yahoowww.yahoo.com• Applewww.apple.com• RIMwww.rim.com34 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 35

ititMobile AppsHeat - A RisingTrend of TodayBy Jai C.S.Millions of Apps aredownloaded everydayto mobiles, andmillions more are gettingdeveloped simultaneously.What are these apps, and why are theygaining widespread adoption in the businessworld?Experience the power of mobile apps…Apps are end-user software applicationsthat are designed for a cell phone operatingsystem which extend the phone’s capabilitiesby allowing users to perform specifictasks. With the widespread acceptance ofmobile technology, there has also been asteep increase in the development of applicationsoftware that offers simple andeffective communication and collaborationtools.Among the most popular are apps thatIqoncept | Dreamstime.comprovide some form of entertainment likegames, or apps related to music, food, traveland sports, as well as those that help peoplefind information they need and accomplishtasks, like maps and navigation, weather,news, banking etc. The emergence of thispervasive technology is shifting the waypeople interact, share and take advantage ofthe huge sets of material that are generatedfor the Internet.This shift in the usage of mobile apps isdue primarily to the increasing consumerinterest in smart phones, blended alongwith the participation of Internet playersin ‘mobile space’, as well as the upcomingnumbers of application stores. Also, addedto all this is the cross-industry services. Everyplayer in this industry is believed to influencehow the application is delivered andexperienced by consumers.In a release, Stephanie Atkinson, managingpartner and principal analyst at CompassIntelligence, said, “The need to accessday-to-day applications from remote locationsor from mobile devices, the need tocollaborate and share files with coworkersacross the globe, the growing demand tohave better productivity tools remotely, andlastly the general growth in mobile and remoteworkers drives the need for remote/mobile applications across businesses andindustries.”There is a nowadays a huge opportunityin the mobile applications market. Frommultiple vendors to wireless service providersto the device manufacturers, all arebetting on this increasing culture. Softwarecompanies are enhancing their innovationsin the telecommunications industry. Thebiggest challenge today lies in clearly understandingthe end-user’s needs across differentsizes of business and across variousindustries.Major players in this industrySince the opening of the Apple Store, entrepreneursand other companies have alsobeen trying their luck. Android apps are aswell gaining momentum as the choice ofseveral users. With the strong support ofGoogle, they have taken a firm grip aheadof some of the other lead operating systems.The Android Market has sprouted up by127% since last August, putting it at threetimes the growth of the Apple App Store,according to the second report released bythe mobile security company Lookout andits App Genome Project, which has analyzedmore than 500,000 Android and iOSapplications since the project commencedlast summer.The Apple App Store in 2010 is said tohave generated $1.8 billion in revenue, givingit an 82.7% share of the total market,down from 92.8% in 2009. Revenue for theApple App Store rose 131.9% from $768.7billion in 2009. Global revenue for the totalmobile application store market in 2010 issaid to have increased by 160.2% to reach$2.2 billion, up from $828 million in 2009.With several options for accessing informationwhile on the go, employeescan be productive with Google Apps evenwhen they’re not at their desks. At no extracharge, Google Apps supports over-theairmobile access on BlackBerry devices,the iPhone, Windows Mobile, Android andmany less powerful phones. Irrespective ofwhether one needs a CRM, accounting orproject management app, the Google appsmarketplace helps one discover, purchaseand deploy top web apps that integratewith Google Apps. Google’s Android Marketreportedly has made the most dramatic advance,with revenue soaring 861.5% for theyear. This has enabled the Android Marketto take a 4.7% share of global mobile applicationstore revenue in 2010, up from 1.3%in 2009. However, Apple is expected to retainmore than half of the market revenue,at least through 2014.Nokia’s OVI Store posted the secondstrongest growth rate in 2010, with revenuerising by 719.4%, giving it a 4.9% share of theapplication market business, up from 1.5% in2009. Research In Motion’s BlackBerry AppWorld retained its No. 2 rank with 360.3%growth. The company’s share increased to7.7% in 2010, up from 4.3% in 2009.Mobile service operators led by RelianceCommunications (RCom) and Idea Cellularare betting that applications for mobiles,the new craze, would help them break theglass barrier of revenues from value-addedservices. Idea Cellular has just inked a dealwith Ericsson AB to launch an applicationsstore, Reliance App World. “Twenty per centof India’s existing subscriber base currentlypays for applications, which shows the kindof potential the industry has for growingthese revenues,” said Prashant Gokarn, businesshead - 3G at Reliance Communications.Other operators such as Uninor havefound in other markets like Pakistan thatallowing customers to use the mobile forapps such as remittances and payments hasdramatically reduced subscriber churn andbuilt customer loyalty. “In roughly around aweek of its launch, despite no commercialpromotions, our app store has seen almost30,000 hits per day,” said Ambrish P Jain, director- operations at Idea Cellular.To hook users, Idea is offering for free15-20 per cent of the 30,000 apps it has inits store. Idea, whose existing app storeproducts can be downloaded on around 500models of GPRS-enabled handsets, plans tomake available as many as a million appsover time.Global apps marketDallas-based researcher MarketsandMarketsis projecting that by 2015 that the globalapp market will reach $25 billion, up from$6.8 billion in 2010, growing at a compoundannual growth rate of nearly 30% between2009 through 2014. North America wasthe largest app market in 2009 with 41.6%of revenue. But Asia led the way in termsof numbers of downloads. The researchersproject that Europe will be the leading marketin 2015, with a 34% compound annualgrowth rate between 2010 and 2015.Nvidia SaysChinese MayHave FastestSupercomputerBy Anuradha ShuklaIn recent years, Chinahas aggressively dominatedmajor industriesand markets around theworld, and recently it hasreached another milestoneby building the world’sfastest supercomputer:the Tianhe-1A.Apple and other OEMs are providing freeand simple-to-use development tools fortheir handsets and are offering developersupport programs for training, technicaland business support, along with a webbasedmedium to sell the applications.Gartner, Inc. recently identified the top10 consumer mobile applications for 2012.“Consumer mobile applications and servicesare no longer the prerogative of mobilecarriers,” said Sandy Shen, research directorat Gartner. Money Transfer, Location-BasedServices, Mobile Search, Mobile Browsing,Mobile Health Monitoring, Mobile Payment,Near Field Communication Services, MobileAdvertising, Mobile Instant Messaging, MobileMusic, etc., are the top consumer mobileapps that are sought after globally.”Apps have no doubt redefined both usabilityand interaction on mobile phones,most importantly with the touchscreendevices and the new wave of tablets. Butall this extended customer experience andcomfort comes at a price, which includesmaintenance, development and distributioncosts, along with the necessity to relyon app stores for updating. But as mobileconnectivity grows, the customer is definitelygoing to be a winner.At the Mobile World Congress 2011 inBarcelona, Global Mobile App Awards weregive out and the App of the Year on theUnveiled during the Annual Meeting ofthe National High Performance Computingin Beijing, the supercomputer, built by China’sNational University of Defense Technology,set a new record of 2.507 petaflops,which is equivalent to over 2 quadrillioncalculations in a single second.Nvidia Corp, which supplied importantchips for the supercomputer, reported thatthe Tianhe-1A is faster than any of the supercomputerslisted in the recent Top 500.org published list. Before the machine becamefully operational, it required 14,336Xeon CPU chips from Intel and 7,168 unitsof Nvidia’s Tesla M2050 GPUs. This awesomecomputing power comes with a price tag of$88 million and would require 4.04 megawattsof electricity to operate all of its 103cabinets that weigh a total of 155 tons. Accordingto Nvidia, the supercomputer willbe used for large scale scientific computationand will be available through an openaccess system.How fast is this Chinesesupercomputer?Just how fast is the Tianhe-1A? The machineclocked a speed of 2.5 petaflops,which is a unit of measure used to express aquadrillion operations per second. In practicalterms, this is equivalent to a computingpower of 175,000 laptops. This is fasterthan the 1.75 petaflops clocked by the previousrecord holder, XT5 Jaguar from CrayInc, which is currently in use by the UnitedStates National Center for Computation Sciencesat the Oak Ridge National Laboratories.The Tianhe-1A however is three timesmore power-efficient than the current supercomputers.Aside from the Tianhe-1A, China currentlyhas two of the top 10 fastest supercomputersin the list, including the Nebulaewhich clocked a speed of 1.271 petaflopsand is currently stationed at the NationalSupercomputing Center in Shenzhen. In2002, US-built supercomputers were displacedfrom the top spot of the list whenJapan’s Earth Simulator claimed the No.1position that year.Reactions and implicationsSince 2002, China has started investingheavily in supercomputer technology buthas lagged behind the United States andthe European Union in this area. Chinaintends to use supercomputer technologyfor research and simulation for alternativeenergy, climate modeling, defense, genomics,and seismic imaging. The Tianhe-1A likewise will not be used as a militarytactical planning device but will be madeavailable through an open access system.This can help researchers around the worldApple Platform went to Rovio/Clickgamer/Chillingo for Angry Birds; App of the Yearon the BlackBerry App World Platform wentto Research In Motion for BlackBerry Messenger;App of the Year on the Android Platformwent to Google for Google Maps; Appof the Year on the Nokia Platform went toHerocraft & InnerActive for Zum Zum, andthe Best Mobile App award went to Rovio/Clickgamer/Chillingo for Angry Birds.During the fourth quarter of 2010, smartphonesales have been reported to havetopped those of personal computers for thefirst time ever. A total of 101 million smartphoneswere purchased, compared to 92million PCs. This accounted for around an87% increase quarter-over-quarter in smartphonesales, compared to the 3% increase inPC shipments. With the advent of 4G andhigh improvements in delivery, there ismore in store for customers to score well interms of high end entertainment and experiencevia their mobile phone.So what’s next?With the apps market hitting its strideand ready to surge, the pressure is now onthe developers and operators, which placesa stress on the technology axis. Namely,will it grow or take a curve? The futurewill tell. A-Pwith their requirements that involve complexcalculations, such as those required inanalyzing geological surveys for oil, proteinfolding and other such research.This will make China a bastion for advancingresearch and sciences in varioustechnologies, a role that was primarily heldby the United States for more than 50 years.Some industry experts are seeing this as abrewing supercomputer arms race betweenChina and the United States, pointing outAmerica’s previous actions of funnelingfunds to put the country back in the topspot after Japan’s Earth Simulator took thelimelight. With the national economy stillin dire straits, White House advisers arewarning against going head-to-head withChina in the supercomputer arena, advisingthat federal funds should be used forresearch in putting the country back in theright computing track. A-PFurther Reading:• Businessweekwww.businessweek.com• Mashablewww.mashable.com• Singulariy Hubwww.singularityhub.comCompanies Mentionedin this Article:• Nvidia Corporationwww.nvidia.com• National University of DefenseTechnology (China)english.nudt.edu.cn• Intel Corporationwww.intel.com• Cray Inc.www.cray.com36 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 37

healthhealthDiagnostic Opportunitiesin Health Sector and GrowthStrategies for 2011-12By Priyanka SharmaThe APAC region haslong been the leader inthe manufacture, productionand supply of variouskinds of pharmaceuticalproducts, as well as highenddiagnostic equipmentof the health care industry.However, seminal studies in health caremarket trends have shown that the APACregion is passing through drastic changes.Since 2009, there has been a significantchange within these very nations that onceprovided the international markets withlife saving drugs. The increasing prevalenceof lifestyle diseases such as diabetesand cardio vascular conditions in this areaof the globe that not only has some of thelargest populations but also some of thehighest instances of diabetes (in countriessuch as India) are now making the APACmarket the largest consumer of its ownproducts.The following are some of the healthcare-sectormarket trends to expect for2011 and 2012, considering 2009 as thebase year.The health care marketscenario in 2009Researching into the Health Care Industry,Frost & Sullivan, a reputed studygroup, found that the Global Healthcaremarket went through many upheavals inthe year 2009. The global economic crisisStratum | Dreamstime.comhad a great impact on the health care sectorin both the US and Europe. Thoughthings also slowed down in Asia, it wasnot as significant as elsewhere. The healthcare market became a nightmare with thelarger biotech companies struggling andvery high rates of Merger and Acquisitions.Most companies dropped down on the listin valuations and the entire market remainednervous throughout the year.In the new war between global andAPAC markets for health care products,APAC is expected to soon have about 30%of the global market, and by 2015 the projectionsare that it will hold close to 40%.Asia is certainly in the process of a transition,which has had an impact on mostmarkets. The mature markets such as Japanand Australia have shown significantsigns of a slow down. The GDP in these twonations has dropped drastically and thishas led to job losses and several portfoliosare seeing drastic realignments. Profits arebeing cut and the margins are drasticallylower. Another reason for the poor healthcare market show in these regions of latehas been Medical Tourism abroad.How is Asia becominga major consumer ofpharmaceutical products?The major growth option for Asia hasbeen the trend for most US and UE companiesto offshore and outsource to Asianproduction facilities. As Asia continues tobe the epicenter of revitalized world economies,the balance of power is seen to beshifting to Asia. The growth in Asia is dueto consumption while export is leading development.This has led to APAC becomingthe fastest pharma-market as well as theAPI production epicenter.Additionally, local governments areemphasizing primary and communityhealthcare. This is translating into higherconsumption of pharmacy products. Be itremote villages in India or the flood-hit areasof Bangladesh, communities are quickto approach the health care centers forimmediate diagnosis of conditions rangingfrom diabetes to AIDs/HIV. The jumpin health care delivery to different parts ofAsia and the APAC region has been relatedto the use of mobile technology. This hasbridged the gap between gaining meaningfuland timely health care support such asin the far-flung islands of Malaya and Fiji.With deeper penetration in the deliveryof health care, there has been a correspondinggrowth in consumption. Thishas been another reason for the emergingdominance of Asia as an exploding consumerof pharmaceutical products and diagnostickits.Asian growth driven by Westerndiagnostic developersThe emerging Asian market is now thetarget for western and European developersof sophisticated diagnostic kits. Theseproducers are targeting the high growthAsian markets of India and China. Bothcountries have massive populations andthe burgeoning middle classes today havethe purchasing power to invest in tertiarydiagnostic tools, such as diabetes diagnosingequipment. These are advanced technologiesin easy-to-use devices. The testingmachine draws a drop of blood through aninvasive needle and indicates the level ofinsulin on the built in strip. This helps theconsumer or the primary health care giverto identify diabetics and thus start the patienton the required health care routine.The scenario in China is no different exceptthat the target population is a growingand aging one that has greater spendingpotential. South Korea too has a provenmarket of middle class willing to spend onclinical testing. Thus the three most populouscountries of India, China and Koreaare defining the consumer related trendsin the health care sector.An after-effect of this type of consumerismis that it is creating a demand for noveltechnologies to manage rising awarenessin patients and their search for innovativemethods to manage them. These have ledto greater entrepreneurial developments,and as the numbers of such products increaseso do the number of consumers forsuch products. The demand for products isdriving innovation and the development ofnew technologies is driving the manufacturingsectors considerably.The health care markettrends for 2010-12The world markets for the health caresector will remain stagnant while showingpartial recovery. However, the growth willbe predominant in Asia. This is due to severalreasons, with the main reason beingthe expiry of major patents. The Merger& Acquisition scenario will be low in theWest while Asia will begin its restructuringphase. The focal growth point for Asia is itsmarket as an outsourcing hub. Major driversof the markets will be 5Ps of Prevention,Preemption, Personalization, Predic-Thus the threemost populouscountries of India,China and Koreaare defining theconsumer relatedtrends in the healthcare sector.tion and Personal Responsibilities.The growth strategies for APAC manufacturersin this industry need to focus onbetter research and development, and usea value system to educate and integratenewer technologies for delivery of healthcarein the region.Better products need not necessarilymean greater consumption. That the APACregion is emerging to be a market leader inconsumption is truly alarming. However,these statistics need to be viewed in a differentperspective. The region has densepopulation and hence consumptions patternsof small percentages too translateinto greater volumes. However, the factremains that indiscriminate consumptionis fast emerging as the main cause ofhealth problems in the region. The regionhas for long had a balance consumptionreflecting the ecosystems. The generalizedtrends of consumption is largely contributingto the inversion of the food chainand is resulting in lifestyle pattern defectsand related socio-economic as well as personalitygrowth issues in the region.We need to adopt more prudent consumptionpatterns that will allow us toenjoy development without the associatedevils of life threatening diseases such asdiabetes and cardio vascular diseases. A-PContinued from Page 19reserves – and the allocation of raw materiallinkages. However, the biggest challengefor the company is to win the trustof the local populace, and allay their fears.The company has to make them believethat the steel plant will not take away theirlivelihood but provide them with betteropportunities and favourable developmentof the region.The long wait for the clearance of theproject in Orissa seems to have not dampenedthe spirit of the company to do businessin India, as Asia’s second largest steelmakerhas set in motion its second proposalin the country. V P Baligar, principal secretaryfor commerce and industries in Karnataka,said that Posco has selected Halligudiin the Gadag district of Karnatakato build its proposed six million ton plantat an estimated investment of about 7 billionU.S. dollars. Reportedly, the companyhas already applied for a captive iron oremining lease and has sought 3,000 acresfor setting up the plant. A-PChinese Herbal CigarettesSame Tobacco in New Packaging?By Vinti VaidThe consumer marketfor cigarettes is onthe rise and so arethe varied options.Since most countries see nicotinecontaining cigarettes as being harmfulto the smoker, several manufacturersand fly-by-night operators are using traditionalChinese knowledge of makingherbal cigarettes that are free of nicotine-containingtobacco.To those who enjoy smoking, Chineseherbal cigarettes present an interestingoption. Many who read aboutthese healthy (!) tobacco-free cigarettesare tempted to try them. Herbal cigarettesare traditionally made from specialChinese herbs and time-tested formulations.These are known to triggerchemicals to help you quit smoking,claim many herbal cigarette makers.They also claim that these cigarettes donot contain nicotine or tobacco.There is also the claim that the herbalaromas will in fact detoxify a regularsmoker from all the nicotine previouslystored in the body. This will apparentlyhelp those in overcoming addiction.Following this therapy for a few weeks,claim manufacturers, one will loose theurge to smoke a nicotine or a tobaccorich cigarette and finally overcome theaddiction to smoking. To make theproduct more interesting, most of thesemanufacturers offer these herbal cigarettesin several flavors or aromas. Themost popular are menthol in rare, mediumand high aromas. These are availablein different sizes and in packs of 10or 50.The truth behindherbal cigarettesObserving the growing popularity ofDmitry Fisher | Dreamstime.comherbal cigarettes not only in China butglobally too, researchers at the ChinaCenter for Disease Control and Preventionchose four parameters, or markers,that would define how nicotine isdelivered between herbal and nicotinecontaining cigarettes. The study groupconsisted of 135 herbal cigarette smokersand 143 regular tobacco smokers.After prolonged tests that includedtesting the urine samples of participantsas well as evaluation of questionnaires,they found that there existed nosignificant differences in the levels of allfour markers - there were two markersfor nicotine and two classes for carcinogens.The study found that as the level ofthe nicotine intake increased, so did thelevel of carcinogens. The more the nicotinesmokers took in, the higher wasthe carcinogens presence. The studyalso established that the smokers whoswitched to herbal cigarettes for bettertaste were 47%; another 24% switchedas they believed herbal cigarettes werehealthier. However, the most significantimpact was that the number of herbalcigarettes smoked each day increasedsubstantially.Verdict of the studyThe study reiterates that adding herbsto the cigarettes in no way removes thenicotine product from regular tobaccoproducts. Cigarettes are smoked essentiallyfor the addictive nature of nicotine.These chemicals cause cancerouscells in the body due to the continuousrelease of harmful drugs in the region ofthe trachea and the lungs. Hence, mostsmokers are susceptible to cancer in themouth and the lungs.In conclusion, the Chinese cigarettemakers are being misleading and unfairby using the term ‘safe’ to promoteherbal cigarettes because nicotine continuesto be present in them. A-P38 | A-P BUSINESS & TECHNOLOGY REPORTA-P BUSINESS & TECHNOLOGY REPORT | 39

technologytechnologyAero India 2011A Grandiose Showof Air Powerby Shamila JanakiramanIn a country where cricketis religion, the only thingthat could divert attentionaway from it would bea bigger event.Forget attracting crowds away from thetelevision when a live or even old match istelecast. Yet this event in question broughtadmirers when a cricket match was happeningin the same city.The record breaking Aero India 2011Air Show was one such grand expo. Onthe 9th of February, 2011, the event wasinaugurated by the Indian Defense MinisterA.K.Anthony and it proved to be moremassive than the Aero India 2007, settingnew standards.Attracting people from defense andaerospace companies across the globe,as well as media and interested viewers,the venue for this remarkable event wasthe Yelahanka Air Force Station in Bengaluru.India is fast emerging as a chief contenderin aerospace and defense research,development and manufacturing, besidesbeing a huge market for purchase of relatedproducts and services. This fact wascorroborated by the presence of all majorsuppliers in this arena.Being South Asia’s major air show, AeroIndia 2011 held its own in all aspects, includingthe spellbinding fly-past, aerobaticformations by the Indian Air Force (IAF)aircrafts, which spewed tricolor smokerepresenting the Indian flag, and thegrand display of IAF’s fighters and helicopters.Not to mention the show of air powerby international participants.India’s military might was showcasedat the eighth edition of the biennial aerospaceand aviation trade expo. A case inpoint was made by the Defense MinisterA.K.Anthony, who said that the Indiangovernment was keen on modernizing thesecurity forces to maintain peace and stabilityin the region. This is naturally an importantconcern for a country growing ineconomy and international prominence.“Our Government is steadfast in its resolveto meet any challenge. We are, therefore,committed to ensure rapid modernisationof our armed forces and equip themwith state-of-the-art systems, equipmentand platforms. Our current defense expenditure– 2.5 per cent of GDP, is consistentwith our projected security requirementsand is bound to increase over the next twodecades,” said Anthony, further reiteratingthe importance and growth of the defenserequirements of India.The showAero India 2011 was organized by thedefense ministry and the Confederationof Indian Industry (CII). The five day eventshowcased defense wares from about 675Ajay Bhaskar | Dreamstime.comThe five day event showcased defensewares from about 675 exhibitorsencompassing 380 companies from 29countries, along with 295 domestic firms.exhibitors encompassing 380 companiesfrom 29 countries, along with 295 domesticfirms. Suppliers were keen to displaytheir new technologies and products toboth the Indian and international markets,using the event as a marketing platform.About 75,000 sq.m. was designated fordisplays in this show, a significant increasewhen compared to the 45,000 sq.m.allocated in 2009. Also, eight countrieshad set up dedicated pavilions. Aircraftsdisplayed at the show were given access to12 hangars at the Indian Air Force’s basein Yelahanka, along with seven temporaryhangars.The popular show offered huge businessopportunities and served as a platform toinitiate powerful partnerships. The eventattracted several thousand business visitorsand catered to nearly 200 business-tobusinessmeetings.Thunderbirds in the skyAir shows held periodically in citiesacross India attract huge crowds of adultsand children. A show of this magnitudeis sure to rope in more visitors. The firstthree days were earmarked for businessmeetings with the weekend days exposingthe grandeur of the IAF aircrafts andothers.The fly-past started with Mi-8 formations,with the Indian tricolor flutteringalong with flags of the Indian Air Forceand the Defense Research and DevelopmentOrganisation (DRDO).The sky was a stage on which IAF SuryaKirans, Sarang and other aircrafts waltzedtheir way. The show highlighted theuniqueness and capabilities of 51 aircrafttypes, both in static and aerial displays.Red Bulls, a professional aerobaticsteam from the Czech Republic, gave animpressive aerial performance besidesinteracting with the Surya Kiran pilots.Equally impressive were the Surya KiranAerobatics Team in their gleaming KiranMk-II aircrafts, who made the sky theircanvas and drew smoke patterns, includinga heart shape that reminded visitorsabout Valentine’s day.The inaugural day saw aircrafts looping,rolling and somersaulting in mid-air, maneuveringtheir way into visitors’ heartsand raising cries of joy and delight amongthem. Tejas, the indigenously developedLight Combat Aircraft from India, wassurely the hero. It flew for the first timein full public view. The smallest fighteraircraft in the world, Tejas made a verticalclimb and did a belly turn in front ofthe podium, making every Indian on handproud.Five Jaguars flew in a V-formation (orarrow head formation) while the Sukhoi30-MKI flew in trident formation besidesdisplaying their short take-off prowess.Boeing’s F/A, or Super Hornet, the Gripenfrom Saab of Sweden and the Rafale fromFrench aircraft manufacturer Dassaultand Eurofighter Typhoon also glistenedthe sky with myriad maneuvers.India’s gainIndia’s Mark II of the Tejas aircraft,an indigenously developed Light CombatAircraft, is expected to be ready by 2015,said the Indian defense minister, addingthat India will collaborate with Russia todevelop fifth generation fighter aircrafts.The IAF is setting the stage to buy MediumMulti-Role Combat Aircrafts (MMRCA).With self-reliance being India’s mottoin defense equipment, the nation hadto equip the armed forces with defenseequipment, systems and platforms. Thisopened up avenues for joint ventures,public-private partnerships and licensedproduction to enable the transfer of technology.The defense offset policy now allowsforeign defense contractors in civilianaircraft projects, which also facilitatesthe entry of international original equipmentmanufacturers.This expo is expected to feed the hugeIndian defense and aerospace market,Factoids• The five day event showcased defensewares from about 675 exhibitors, encompassing380 companies from 29countries, along with 295 domesticfirms.• The Indian defense and aerospacemarket will reach USD 150 billion by2030.• The next Aero India 2013 will be heldbetween February 6th and 11th, 2013.which is expected to leap to $150 billionby 2030. Dealings for the supply of mediummulti-role combat aircrafts formedthe main highlight of the air show event,along with many other deals. Major internationalsuppliers are vying for a partof the great Indian defense deal pie, asproven by the increase in the number ofparticipants this year.According to Air Chief Marshal PV Naik,the contract for the Medium Weight Multi-Role Combat Aircraft, or MMRCA, valuedat $11 billion, will be signed by September2011. There are six supplier contenders,and five of them even put up their aircraftsfor aerial displays, hoping to garnerthe sizable contract by impressing Indiandefense experts. This huge deal would befor the procurement of 126 MMRCAs to replacethe aging MiG-21s.The MMRCA dealThe six contenders are Boeing F/A-18Super Hornet, Lockheed Martin F-16, Moscow-basedUnited Aircraft Corp’s MiG-35,French Dassault Rafale, EADS EurofighterTyphoon and Sweden’s SAAB Grippen.Eurofighter Partner Companies heldtalks with Indian counterparts to engageIndia as a production and developmentpartner for the advanced swing-role combataircraft.Bernhard Gerwert, CEO of Cassidian AirSystems and Chairman of the SupervisoryBoard of Eurofighter GmbH said, “Our ultimateobjective is to win India as a keypartner, co-developing and co-producingfuture upgrades and enhancements, newsub-systems, software, etc.”India is expected to become a manufacturingand engineering partner as part ofEurofighter’s industrialization strategy.A future supplier network is envisionedwhich will include India into the Eurofightersupply chain and become hometo the Eurofighter Typhoon. EurofighterTyphoon is a strong contender for India’sMMRCA choice, as it is a modern multi-rolecombat aircraft with an airframe made ofover 80% composites, including materialslike carbon fiber composites (CFC), glassreinforcedplastic, special alloys, etc.At Aero India 2011, Russia exhibitedvarious types of weaponry and was representedby MiG, Sukhoi, Almaz-Antei andEngineering Design Bureau, according toRosoboronexport sources. Russian fighterjets MiG-35 and Su-35, the Yak-130 combattrainer, two versions of the Il-76MDtransport plane (with different engines),the Il-78MK aerial tanker, MiG-29K andMiG-29KUB naval fighters and the Be-200amphibious aircraft were on display, aswell as several helicopters and air defensesystems.If the MiG-35 wins the tender, Russiawill be transferring all key technologiesto India’s Hindustan Aeronautics Ltd., besidesproviding assistance for the productionof the aircraft in the country.After the air show, U.S. Defense majorNorthrop Grumman was requisitioned forinformation regarding the MQ-4C BroadArea Maritime Surveillance UnmannedAircraft Systems (BAMS UAS) by the IndianMinistry of Defense for use by the IndianNavy. Indian Navy may be adopting theMQ-4C to complement surveillance operationsconducted by Boeing P-81 aircraftsfor maritime surveillance. The company’sMQ-8B Fire Scout will serve the IndianNavy in military roles, homeland securityand law enforcement.If Sweden-based Saab Gripen bags theMMRCA deal for the fighter jets, then thecompany promises full, true tech transfer.The full Transfer-of-Technology (ToT)will include all critical sub-components,including AESA radars. The company alsoannounced plans to open a Research andDevelopment center in India, which willgo into operation in five years with 300 to500 Indian engineers. India will becomea design and manufacturing hub besidesbeing a large long-term market. Saab issupplying HAL with components for theexport variants of HAL Dhruv AdvancedLight Helicopters supplied to South America.Tata Advanced Systems Ltd inked anagreement with US-based Lockheed Martinto form a joint venture company, TataLockheed Martin Aerostructures, to buildaerostructures for the C-130 aircraft producedby Lockheed Martin.Tata group is striving to bag orders thatthe selected MMRCA supplier will have toplace with local vendors upon winningthe $11 billion defense contract, whichwill amount to 30% of the total contractvalue. Tata also joined hands with SikorskyAircraft Corp and United Technologiesto make S-92 helicopter cabins in India.Aero India 2011, which took place fromthe 9th of February to the 14th, broughtto the limelight several aerospace industryplayers and distinctively appealing flyingcrafts and other associated equipment.About 75,000 interested visitors throngedthe venue on the last day, even missing theICC World Cup warm-up match in Bengaluruto witness major aerospace companiesdisplay their air power. Aero India expositionswill be considered a sure-fire opportunitycreator for global aerospace industriesof the world well into the future. Thenext Aero India 2013 will be held betweenFebruary 6th and 11th of 2013.India is fast emerging as a large militaryspender with a huge defense procurementbudget. The capabilities in automotivemanufacturing, low-cost manufacturingfacilities and offset policies are advantagesavailable in India. Many Indiancompanies like Tata group are aiming tocreate a global aerospace brand by collaboratingwith international aerospacecompanies, said John Siddharth, industryanalyst, aerospace and defense, for Southand West Asia at consulting firm Frost andSullivan. A-P40 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 41

technologytechnologyIndia’s Growing Defense Industryby Anshu ShrivastavaIndia is one of the majorimporters of defenseequipment, and it dependshighly on foreignsuppliers to fulfil the requirementsof its defenseforces.Currently, imports amount to nearly70% of India’s total defense expenditure.While the country has been on a quest tobecome militarily self-reliant in producingequipment and systems that feature theindigenous “Made in India” tag, it has thusfar failed to achieve strategic autonomy. Aplethora of reasons have hampered the creationof a strong industrial base for the defensesector, not the least of which has beenthe half-hearted policies of the Indian governmentthat have prevented private playersfrom investing in this crucial sphere.In a bid to significantly reduce dependenceon defense imports, encourage privateplayers, and create world-class indigenousproducts, India’s Defense Minister,A.K. Antony, introduced the first DefenseProduction Policy (DPrP) earlier this year.The policy has taken into consideration theexperience of procurement agencies as wellas the feedback received from both Indianand foreign defense industries. Expected toherald an era of record industrial growth inthe military arena, this new policy providesThe Indian defense industryis still in its nascent stage.The market is highly lucrativebut requires huge investmentto make India self-reliant indefense production. For thisto happen, transfer of criticaldefense technology, lessbureaucratic hurdles andpolicy flexibility are required.Stepan Olenych | Dreamstime.comample opportunity to both the public andprivate sectors to manufacture products tomeet Indian defense requirements. “Thepolicy has the potential to effect a positivechange on industry’s engagement andinvolvement in defense production,” saidSatish K. Kaura, Co-Chairman of the NationalDefense Council for Confederation ofIndian Industry (CII ).Following India’s independence, successivegovernments kept private players outof defense equipment production due tothe strategic and sensitive nature of the sector,and from the outset it came under thepurview of Indian Government. The first IndustrialPolicy was outlined in the IndustryPolicy Resolution of 1948 and henceforth,defense production was the prerogative ofthe public sector. The 39 Ordnance Factories(OFs), 8 Defence public sector units (PSUs)and 50 Research & Development laboratorieswere relied on to fulfil the demands ofthe defense forces. The participation of privatecompanies was limited to sub-contractorsand ancillary industry, and they werebarred from entering the production arena.The country opened up its economy inthe early 1990s and thanks to economicreforms, private sector started flourishing,helping to write India’s economy successstory. A decade later in May of 2001, theGovernment of India decided to open thedefense industry sector to private companies.The Ministry of Defense (MoD) allowedprivate sector participation of up to 100%and foreign direct investment (FDI) permissibleup to 26%. Defense-related items wereremoved from the reserved category andtransferred to licensed category. However,most of the private players preferred to stayaway from the high-tech defence productionsector due to the necessary high investmentcosts and the abysmal performance ofgovernment owned units. Some companiessuch as L&T, Tatas, Mahindra and Mahindraventured into this industry, but the overallresponse was lacklustre.In 2005, a committee recommended thatselected private sector companies shouldbe given permission to build major defenseplatforms such as tanks, aircraft and ships.A couple of years later in 2007, anothercommittee examined over 40 private sectorcompanies, recommending 15 of them forRaksha Udyog Ratna (RUR) status. It was reportedthat Tata Motors, Larsen and Toubro,Tata Power Company, Mahendra and Mahendra,Godrej and Boyce, Bharat Forge, InfosysTechnologies, Wipro Technologies andTata Consultancy Services were cleared forRUR status. Once awarded, RUR would havegranted these companies a position equal toDPSUs and OFs.However, this year in February, the MoDannounced that it was scrapping this proposal,citing small private sector companiesas being opposed to the granting ofRUR status, since they would be ineligiblefor the same such status. According to aBusiness Standard report, “MoD sourcessuggest that this decision was promptedless by opposition from private sectorcompanies and more by pressure from theDPSU trade unions, which feared job lossesfrom business flowing to private sectorcompanies.”In 2005, the MoD formulated a defenseoffset policy to contribute to the developmentof the country’s domestic defence industry.The primary objective of this policywas to build India’s defense industrial base.This policy permitted foreign vendors todischarge their obligations either via the executionof defense exports of Indian itemsand services or via investments in India’sdefense infrastructure. Moreover, in orderto implement their offset obligations, theycould also select Indian firms in consultationwith an industry associate of theirchoice. Later in 2008, the MoD amendedthe guidelines after studying internationalpractices. The revised policy included a listof products which would qualify for the dischargeof offset obligations; removal of therequirement for private industry to obtainindustrial license to participate in offsetprograms unless stipulated by the regulationsof the Departmental of IndustrialPolicy and Promotion (DIPP); exemption ofacquisitions under fast track from offset obligations;and more.Under the new Defense Procurement Procedure(DPP), a number of new areas in offsetshave been included in the first defenseproduction policy. This has been done toboost defense production both in the publicand private sectors. DPrP is seen as anattempt to encourage private players to setup defense business units in the country. Itaims to significantly slash the need for defenceexports by achieving substantive selfreliance in the design, development andproduction of equipment, weapon systems,and platforms required for defense in asearly a time frame as possible.“The main thrust of the DPP is to bringabout a change in the orientation and to ensurethat most of the weapon systems andplatforms required for the nation’s securityare made in India,” said Raj Kumar Singh,defense production secretary, in an interviewgiven to a publication. “Gradually, weintend to make -- or integrate -- most of theplatforms here and reduce our dependenceon imports.”This new policy also aims to enhance thepotential of small to medium enterprises(SMEs) in indigenisation while broadeningthe defense R&D base of the country. Industryanalysts predict that SMES will play akey role in the defense industry and achievethe levels of vertical integration that the developeddefense markets such as the US andEurope already have.The DPrP states that preference will begiven to indigenous design, developmentand manufacture of defense equipment.Singh said that under this policy, “the Indiangovernment has short-listed four domesticcompanies to develop and manufacturenext-generation infantry combat vehiclesfor the Indian Army.”Foreign direct investment is still limitedto 26% despite a vociferous call to hike theFDI limit and make it 49%. The cap on FDImakes this sector an unattractive propositionfor foreign vendors. Last year in November,The New York Times reported thatAmerican officials believe that Indian ruleslimiting foreign contractors to minoritystakes in joint ventures, and requirementsfor them to spend 30% of any contract moneyon work in India, are too onerous.Industry experts note that the increasein FDI would help secure the transfer ofkey technologies to India, as well as boostthe foreign capital investment available tothem. Recently, the Department of IndustrialPolicy and Promotion suggested theraising of FDI cap to 74% in the defensesector, and according to reports, a group ofministers are considering the proposal to increasethe FDI limit from the present 26 percent to 49 per cent to attract more foreigninvestors in the country. Singh said that the“aim in limiting foreign investment to 26%is to develop defense technologies withinthe country, and if the FDI is hiked, foreignfirms only will supply defense products toIndia and local firms will still be dependenton overseas suppliers.”However, Defense Procurement Policy-2011has opened the civil aerospace andinternal security sectors to foreign defensesuppliers, whereas these areas were previouslyoff-limits for them. And in February,at the inauguration of the Aero India 2011,AK Antony said that the Indian governmenthas appointed a committee to explore thepossibility of throwing open more areas toforeign arms vendors to meet their contractualobligations.During the period of 2010-20, foreignvendors are expected to invest over 30billion US dollars in the Indian manufacturingindustry as part of their offset obligation.American contractors have inkedagreements to create joint ventures withHindustan Aeronautics Limited (HAL), aDPSU. In the year 2007, Boeing signed a$10 billion deal with the company. For Boeing’s777 commercial jets and for planesit’s building for the Pentagon and India,HAL is making parts. Last year in November,the first Sikorsky S-92 helicopter cabinmade in India by Tata Advanced Systemswas unveiled.The Indian defense industry is still in itsnascent stage. The market is highly lucrativebut requires huge investment to makeIndia self-reliant in defense production. Forthis to happen, transfer of critical defensetechnology, less bureaucratic hurdles andpolicy flexibility are required. A-PContinued from Page 27million smart grid project.Verizon also has a partnership withCurrent Group and has smart grid-relatedalliances with meter manufacturer Itronand Ambient Corporation, which offersa product that extends Verizon Wirelessconnectivity to end user devices via Wi-Fi,powerline carrier, Zigbee or WiMax.Challenges are plenty for smart gridcompanies. To support the goal of smarterenergy management, it will be criticalfor utility companies to upgrade their infrastructureto support two-way communicationwith customers. In the past fewyears, the definition of Smart Grid wascentered on utilities involved in powergeneration and distribution. In the future,smart grid will be associated withmore utility services.A great deal of talk may not necessarilyassist smart grid vendors. The industryneeds strong strategies to support futuredemands. Industry is looking to create virtualpower plants, for example, and suchexciting projects are underway to supportthis model today, with integrators standingready to ramp it up.Home network connecting power utilitieswill be the largest opportunity forsmart grid industry. Some telecom operatorsalready supply utilities with wirelessand wired connectivity to substations. Itcould be a natural fit for telecom operatorsto offer upgraded connections to those andother elements of the power distributionnetwork. For instance, AT&T offers homenetworking capabilities in association withits U-verse multi-play offering, and Verizonhas done the same with FiOS.But some utilities may opt to use a singlenetwork to upgrade their connectivity andfor communication with customers. Telecomservice providers may or may not playa role there. If power utilities and operatorscannot work together, it will be a bigloss for telecom investors and customers.In some countries, both power and telecomsare owned by governments. In someplaces, the same groups are into offeringboth these services. Smart grids will ensuremore cost effective services to customers,and it will become an essential tool toensure more productivity in the future. A-PSummary:Smart Grid is now in the implementationstage. During the deployment stage, companiesneed to exercise several precautionary measures.Smart Grid offers several opportunities, but challengesare also increasing. The world will soon seethat smart grid is benefiting more segments inthe near future.Companies mentionedin this article:• AT&T• Verizon• Bloomberg• GE• Global Data• Current Group• Pike Research• Ambient Corporation• U-verse• FiOS42 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 43

technologytechnologyGrowth of HomeAutomationIndustry inAsia-Pacificby Shamila JanakiramanAlmost anyone mightwish to have a homelike that of HarryPotter’s friend Ron, in thePotter mega-movie whereeverything from cooking tocleaning to washing is doneby magic.Yet in present times, we may be able tosettle for a fully automated home. Peopleneed not worry about wasting power,switching on lights, audio systems or controllingthe temperature. Such is the powerof home automation techniques now availablefar and wide.Security, temperature control for bothsummer and winter, switching on waterheaters, microwave ovens, or any deviceis made possible by an automated system.Such systems increase the value, safetyand energy efficiency of the home environment.Washing machines and water heatersare home automation products too.The basic features being simple, thesesystems are easy to operate. Previously costprohibitive and affordable only for the richand influential, now simpler systems ataffordable prices are also available in themarket. A single button can control manyevents and some specific activities aremenu-driven, which allow control of audiosystems, lights, and operating domestic robots.Full automation does not mean controlonly in person. Most systems can beaccessed and controlled remotely via theInternet or through telephone by users.These systems can be expanded further toinclude the pool, spa, irrigation controls,window treatments, multi-room audio systems,home theater controls, access controland video surveillance, according toOMEIO International Pte Ltd, Singapore.ImplementationHome automation, like building automation,deals with specific automationrequirements of private homes. It ensuresthat automation techniques are installedsuitably for the comfort and security of itsresidents. Most techniques used in buildingautomation, such as light and climate control,control of doors and window shutters,security and surveillance systems, etc., aredeployed in the home environment also.When drawing up the plan of a newhouse, plans for the home automation systemsshould also be incorporated. Controlwires required for the system have to beprovisioned before the interior walls areconstructed. These wires connect to a controllerwhich will control the home environmentaccording to settings.It makes it easy to install the automationsystem while constructing a house,as walls, outlets, etc., are accessible anddesign changes can be incorporated accordingto requirement. Wireless systemsreduce wiring changes and charges. Thismust be adapted to if home automationis to be done in an already constructedhouse. Communication is effected via existingpower wiring, radio or infrared signalswith a central controller. Network socketscan be provided in each room like in ACpower receptacles.The home automation system, or domoticssystem, comprises hardware controllersor software controllers, sensors and actuators.A centralized controller is used to controlall devices or multiple intelligent devices,which may be distributed throughoutthe home to provide necessary control.In highly sophisticated systems, detectorscan sense a person entering the room,find out who it is and adjust the temperature,lighting, music, etc., according totheir preferences for the time of day, dayof week and a multitude of other factors.When a house is not occupied, as in themorning when children leave for schooland parents leave for work, the systemgoes automatically into energy savingmode, switching off air conditioners andlights, which can be switched back on automaticallyat the expected time of arrivalof any occupant.Also automated tasks include maintenanceof inventory of products in the pantryor fridge via Radio Frequency Identification,or RFID tags. A shopping list canbe generated by the automation system,which keeps tabs on the consumption. Thisguides the user to replenish contents.In home automation there are some basicpractical uses such as in fire and burglaryprevention. When an alarm set forthis purpose detects fire or smoke, the systemmakes lights blink in all parts of thehouse to alert occupants. Also it puts offentertainment systems so as to eliminatedistractions, effectively making peoplealert. A burglar alarm can also be made towork in a similar way.Other day-to-day tasks taken care of byhome automation systems are control ofmulti-media home entertainment systems,automatic plant watering, and pet feedingsystems.Automatic detection systems work asdetection sensors to detect intrusion,movement, etc. Sensors can also be used inmagnetic contacts in doors and windows,besides providing sensors for glass breakdetection and pressure changes. Also fire,gas leaks and water leaks can be detectedusing sensors.Switching on a coffee maker, closing thegarage doors or starting the water sprinklingsystem to water the plants and lawnare also possible through remote use ofhome automation systems. Home automationincludes centralized control of lightingand HVAC, comprising heating, ventilationand air conditioning. All this ensuresconvenience, comfort, energy efficiencyand security.Asia-Pacific marketIt was revealed by a survey that the Asia-Pacific home automation services marketwill grow fast but will exhibit uneven marketdevelopment. Japan and South Koreawill lead in the technology area. Australiaand New Zealand show great developmentpotential, as most single-family homesneed higher levels of home security. Indiaand Malaysia were found to be emergingas major contributors to the regional homeautomation services market. More Koreancompanies were found to be involved inhome automation products when comparedto Japan.The region’s home automation servicesmarket will grow owing in particular to thefast development in high-speed broadbandconnections, home networking and 3G.This is expected to take the market growthto over USD 500 million by 2011, accordingto the survey. Japan, South Korea, Australiaand New Zealand will lead in this field.Broadband service providers and mobileoperators will leverage this scenario to enhancetheir ARPU. China, Taiwan, Thailandand Singapore are potential markets withthe need for more customer education.Hong Kong-based Home Touch specializesin creating intelligent buildings andvillas. The company ensures an eco-friendlyintelligent solution, providing their servicesto offices, hotels, educational institutions,hospitals, entertainment centersand homes. Serving the Asia Pacific region,they have implemented projects in China,Malaysia, Vietnam, Singapore, Brunei, Indonesiaand even the Middle East countries.Australian company MITHO introduceda home automation system interfacewhich features a 4.3 inch touch screenLCD display that allows full-screen navigationthrough menus in ways similar to ahandheld computer. Color codes to indicatevarious functions are used makingthe interaction simple and easy. The systemincorporates a programmable logicsystem to manage electric automationsin devices for scenarios, lights, openings,irrigation, curtains, load control and heatregulation.Home automation control was mademore hi-tech by the release of an iPhoneapp which allows control of all installationsvia the user’s iPhone. Nullriver’sHaiku synergizes HAI’s home automationcontrollers with iOS’s user interface. HAI, acompany based in the United States, offerssolutions ranging from utility smart gridsto home automation products.Haiku offers a home interface that canbe used from anywhere in the world convenientlyand easily, leveraging the operatingsystem’s touch interface and helping userschange any setting at home easily. Userscan change the thermostat setting, controllights, or the security system by justa few taps on the iOS device. The interfaceis both intuitive and quickly responsive.Additionally, the interface is customizablevia the Favorites tab icons. The Status tabgives the security status for each area, thermostatstatuses, auxiliary sensor statuses,and it also highlights messages or insecurezones.Using the iOS powered phone even at aconsiderable distance, users can set temperature,humidity, date, time and othervalues using the interface controls. Thecamera tab also allows viewing of footagefrom cameras placed at home. The entireHome AutomationCompanies> Honeywellwww.honeywell.com/securitysouthasia> MITHOwww.sfere.com.au/bpt/mitho.htm> Home Touchwww.hometouch.asia> OMEIO Internationalwww.omeio.com> Home Automation Systemswww.homeautomation.inhome is under control of the master evenif they are away from the site, thereby enhancingsecurity as well.Future trends inAsia-Pacific marketA survey conducted by In-Stat entitled,“Digital Home: Asia/Pacific Consumer Adoptionand Perception” covered respondentsin 6 countries, including Australia, China,India, Japan, Singapore and South Korea.The survey was aimed at finding interestlevels and current usage of broadband Internetconnections, home networks, variousdigital home client devices and homenetwork applications among Asia/Pacificconsumers. This is expected to highlightfuture market scenarios for such products.About 81.7% of those surveyed had broadbandconnections at home. Homes withbroadband and those with a home networkare lucrative customers for digital homedevices/services. Also 40.2% respondentsused network routers for their home networkand another 39.0% expressed plans togo for home networking routers soon. Thetasks that were running on home networkswere PC inter-connection, broadband sharingand printer sharing.Survey results also showed that homeautomation systems have only been implementedby 14.4% of homes, however. Althoughthere was a paucity of products in2006 when the survey was conducted, owingto the developing stages of the homeautomation market, about 46.5% of respondentsexpressed interest in such systemsand were even ready to spend between USD200 to USD 1,000 on them. This is indicativeof a growing market, opine experts.Advantages ofhome automationThe advantages of lifestyle enhancinghome automation systems are many, especiallyin a fast-paced life as that of presenttimes. Besides, managing hectic routines,remembering even small details likeswitching off lights and switching on thesecurity system have become increasinglydifficult. Technologies are giving a helpinghand in this respect. Home automationdoes just that by bringing all gadgets togetherto be managed easily.This is a fast growing concept in theAsia-Pacific region due to the burgeoningtechno-savvy population. Better economicconditions are further fuelling the growthof this market.The advantages of convenience, comfort,reduced energy consumption, safety,security and a one-touch point control forthe entire home cannot be passed up bymany. All these factors serve to increasethe penetration levels of these systemsanywhere in the world. This in turn willboost the potential of the home automationmarket.These systems are used in small officespaces and other establishments alongwith an increase in awareness about theaccruing benefits offered by these systems.The home automation market is poised forconstant growth with almost no likelihoodof a slowdown in the near future. If companiescan cater to the needs of customersby customizing solutions for the affluentand designing simpler, less expensive modelsfor smaller homes, they will be ableto make hay while the sun shines in thisevolving industry. A-PFurther Reading:• Home Automation Trends in Asiawww.in-stat.comValerijs Kostreckis | Dreamstime.comContinued from Page 29will eventually outpace and exceed that ofmore developed countries in the West.Asia-Pacific companies are expected toput in more effort into improving theirIT capacity to sustain long-term strategicgrowth. These companies will rely ontheir information and communicationtechnologies to serve as their backbonesystem in establishing the means to pushtheir products and services to the market.These strategies will include buildingmore dynamic websites, automatingback-office functions, improving aftersalessupport, and adopting social mediatechnologies.With a shift in their predominant focusfrom cost cutting and efficiency to businessexpansion, Asia Pacific companiesare now ready to invest in information andcommunications technologies to achievelong term growth, adopt innovation andimprove customer experience.A-PFurther Reading:• Gartnerwww.gartner.com• Network Asiawww.networkasia.net• Datacenter Dynamicswww.datacenterdynamics.comCompanies Mentionedin this Article:• Ozone Mediawww.ozonemedia.co.in• IDCwww.idc.com• IBMwww.ibm.com44 | A-P BUSINESS & TECHNOLOGY REPORTA-P BUSINESS & TECHNOLOGY REPORT | 45

technologytechnologyHi-Tech Adds Glitz and Glamourto Movie Productionby Shamila JanakiramanMovies have beena part of popularculture for morethan 100 years.Essentially, the movie is a photographicmedium which utilizes electronic and computertechnologies to the fullest extent possible.Movies are visions of culture or of place orcommunity aside from being a popularentertainment/art form and a majorindustry in almost any country. Theyalso serve as a powerful communicationmedium to highlight the plightof weaker sections of society, andas an eye opener for those behindthe velvet curtains to the realitiesof life. Language is no longer a barrieracross cultures, as most moviescome with sub-titles or are dubbedto regional languages. Thus even anIndian movie can become famous inJapan.At one time only movies withoutaudio were possible. In the era ofsilent films, cameras and projectorswere equipped with electric motors toget constant film speed. Studios used arcfloodlights and mercury vapor tubes, whichlater advanced to tungsten floodlights withreflecting surfaces. The early motion pictureswere static shots that showed an eventor action without editing or use of any cinematictechnique. Now movies filmed duringnight are made to look like daytime scenesand vice versa.Films are comprised of a series of individualimages called frames. When viewed inquick succession, they produce an illusionof motion. Persistence of vision removes thejerks between pictures and the motion isperceived via a psychological effect knownas beta movement. The concept of persistenceof vision was known to the ancientRomans and Chinese. The phenakistoscopeused this principle, where a series of pictureswere moved to create an impressionof a moving body.To make movies commercially possiblethe basic technical requirements were abright source of light for the projector,photographic film and cameras. The lightwas produced by gaslights, electric arcs andlater by electric lamps. In 1889, George Eastman’sflexible film became popular, makingit possible for a long story to be recordedon a continuous reel of film. Soon ThomasEdison and his assistant, William Dicksonoptimized the motion picture camera andintroduced the sprocketed film, whichhelped control the film position, therebyeliminating jerkiness. Soon a motion pictureprojector was made which magnifiedthe moving picture on a screen, thus allowinglarge groups of people to view it. Still,audio was absent up to the early 1920s, andmusic orchestras were used to play music inthe movie hall.Regissercom | Dreamstime.comIn animated movies, nearly 65,000 picturesare used with around 12 picturesmaking up a one-second duration scene.Later that decade, silent movies gave wayto sound movies, ad electronics becamemore important in movie-making. The useof microphones, amplifiers and loudspeakerswas critical in giving an authentic feelto video. Each film now came with a soundtrack of speech, music and sound effectsthat were in sync with the action on screen,and such films were called talking pictures,or talkies, but they lacked natural color.Soon black and white films gave way tocolor films, helping to draw viewers awayfrom television, which remained in blackand white till the 1960’s.Neon and colored lighting, projectionsystems and sound systems added to theentertainment. The invention of an editingmachine called Moviola further enhancedmovie production. Multi-track sound, stereoscopicsound, cinemascope and widescreenformats, along with magnetic recordingand Dolby noise reduction techniques,accentuated movie-making and cinema presentation.Film schools cropped up in movie-lovingsocieties, and many enrolled to learn thenitty-gritties of film technology beyond actingand direction. The introduction of digitaltechnology brought about even greaterchanges from the 1990s to the 2000s.Then came animated movies, hi-tech extravaganzasand digital movies. Digital moviescould be stored and reproduced perfectlywith no degradation as occurs with filmreels and they could be easily distributed.Also the cost of producing digital movieswas less than celluloid ones, the only disadvantagebeing the high cost of the equipmentrequired.In animated movies, nearly 65,000 picturesare used with around 12 pictures makingup a one-second duration scene. Backgroundsare kept constant and only actionsof characters are featured on clear acetatefilm or cell through which the backgroundis visible. Depending on the duration ofscene, the number of pictures to be drawnis calculated. Nowadays the use of computer-generatedanimation has reduced thenumber of personnel and manual drawingefforts, besides introducing special effectsin the animated movies.3D movies were a craze some decadesback with various kinds of stories being writtendepending on regional histories and culture.To make three-dimensional effects ina projected movie, the camera records twoimages through lenses placed inches apart.The viewer’s brain reconstructs depth fromthe images as in normal vision.To view the movie, the audience uses specialglasses allowing the left eye to see theimage filmed by the left camera lens, andthe right eye to see the image filmed by theright lens. The lenses are made of differingcolors or differing polarization to help producethe separation effect. Small theatresalso show 4D movies where elements ofwind, smell and movement are also includedin the total viewing experience.As of December 2009, there were around8,500 digital screens internationally ofwhich only 5,200 were equipped with 3Dsystems. Now there are 10,700 3D screensout of 14,500 total digital screens. Also tobe noted is that 38% of international 3Dscreens are in the Asia-Pacific region.Some hi-tech moviesThe movie Avatar was created using ‘stereoscopicfilm making’ with cameras thatwere designed especially for the movie.The visual effects for the amazing graphicsdisplayed in the luminescent plants andanimals in the movie was created using Linuxand other Linux-based software. LargeLinux clusters were used for film rendering,with Red Hat Enterprise Linux as the OperatingSystem. The CGI was created with64-bit Linux-based software for painting texturesand 3D modeling, according to expertsources.More than 90 cameras thronged thesound stage, and during editing, the studioatmosphere was replaced by digitally created3D backgrounds and structures. The3D Fusion camera used in the movie projectused two high-definition cameras in one togive depth perception. The lenses can be adjustedto focus on nearby objects or on faraway objects similar to human eyes.A new ‘virtual camera’ was used in thefilming of Avatar, which created history inmotion-capture film making. The systemdisplays an augmented reality on a monitor,where the actor’s virtual counterparts areincorporated into their digital surroundingsin real time. The director can adjust and directscenes just like in shooting live action.Closer to home, the Indian movie ‘Endhiran’(or ‘Robot’) was made with a budgetof $41,675,740. The Light Stage Face ScanningTechnology used in Avatar was usedhere, based on original research led by PaulDebevec at the University of California atBerkeley and published at the 2000 SIG-GRAPH conference. It helps visualise howan actor’s face appears when lit from differentlighting directions.Using this captured imagery, technicianscan produce specialised algorithms that createrealistic virtual renditions of the actor.This reproduces the color, texture, shine,shading, and translucency of the actor’sskin as life-like as possible, resulting in adetailed high resolution CGI Face.The scanning was used to create detailed3D Face mesh OBJ file, 3 Diffuse RGB Normalmaps, one Specular Normal map, oneDiffuse texture map and one specular intensitymap. These images were in HighDynamic Range format. A new proprietarymaya skin shader plugin was developed byIndian technicians with the help of JupiterJazz to leverage the intense details gatheredwith high resolution.More than 2000 VFX or visual FX shotswere incorporated in the movie. Animatronics,which involves Mechatronic ObjectsFactoids• In animated movies, nearly 65,000pictures are used, with around 12 picturesmaking up a one-second durationscene.• By July 1896, Lumière moving pictureswere screened in Mumbai, Indiaafter gaining popularity across Europe.In 1913 a full-length silent motion picturewas produced in India.with motion sensors which can be made tomove with the help of remotely operateddevices, was used. The motion sensor cancapture the movement of the person whoacts like the movie character.The seamless blending of key frameanimation, motion capture, animatronics,multi robots and real model/texture scan ofthe characters enhanced the movie production.VFX was made seamless and consistentwith right color timing enabled by the DIteam from Reliance Media Works, India.The Japanese movie Godzilla was firstreleased in 1954. A picture continuity, orpictorial script, for each scene was used toindicate positions and where to positionthe camera. As most scenes were filmed inthe studio, artificial environments could becreated and manipulated without outdoordisturbances.The monster, which looks 60 metres tallin the movie, is actually only 2.2 metreshigh.Some scenes like that of the movingGodzilla and the burning city were shot separatelyand superimposed. Some years backsuperimposition was done manually frameby frame using an optical printer. However,Digital Synthesis is the norm now, a methodwhich employs a scanner to generate digitaldata from the film while using a computerfor producing the required image. Digitalsynthesis increases the number of elementsthat can be processed in addition to enhancingthe precision.Scenes of disaster are usually made byusing miniatures. As they require greaterprecision, multiple cameras are placed indifferent angles to shoot the scene which islater edited.Movies of the futureFuture films are going to be revolutionary,using technology still as yet unimaginabletoday. Disruptive technology will enablefuture movies to be screened in smaller theatressuch as in convenience stores, mallsetc. These can serve 1 to 8 persons, showingmovies on demand from a huge database.Movies will also be able to be downloadedfrom booths on to mobile devices forconvenient viewing. Future movies will offervirtual experiences with decentralizedversions, which viewers can feature themselvesas a character within the movie. Inthe foreseeable future, participatory movieswill allow viewers to become part of thecast along with other actors. Perhaps thenpeople will also be able to make their ownmovies and get them distributed via socialmedia.Movie industryin the Asia-PacificThe movie production industry is fastgrowing in the Asia-Pacific region. Chinashowed an upswing of 23% in 2010 comparedto 2009, with gross revenues of $1.1billion. Other huge markets like Japan andKorea also gained significant growth, withthe former leaping over the $2 billion markand Korea showing $750 million in revenues.The motion picture industry is servedby the CineAsia Summit, which invites delegatesto compare notes on piracy, 3D techniques,digital movie making and the futureof the movie industry.Naoshi Yoda, the managing director ofT-Joy Cinemas in Japan says, “By pursuingbusiness within the framework of countries,people are restricting themselves…itis necessary to exceed the boundaries thatthese restrictions allow.”The T-Joy Co-Marketing Strategy strivesto augment the movie industry in Asia.The concept involves opening a marketwhere production companies and distributioncompanies can ensure stable distributionbesides enabling an exchangeof high-quality content between nations.T-Joy has also implemented a contentexchangeproject with CJ Entertainmentin Korea.Movie piracy, also known as film theft,is a growing industry menace which is beingdealt with by an iron hand from theMotion Picture Association for the Asia-Pacific Region. More proactive and collaborativemeans are now employed to beatpiracy by working with local cinema operators.This has been effective in curbingthe menace of camcording in Hong Kongand Malaysia. Thus, technology is theneed of the day to eliminate film piracy,so it appears. A-PCompanies Mentionedin this article:• Reliance Media Works, India• T-Joy Cinemas, Japan• CJ Entertainment, KoreaContinued from Page 35to grow by 39% CAGR for the succeedingperiods until 2014. This segment will bepowered mostly by Collaboration, CRM andHRM applications, and will be the most importantdrivers that will promote furthergrowth and be able to meet growing demandsin the market. A-PFurther Reading:• Asia Telecom Newswww.asiatelecomnews.com• ZDNEt Asiawww.zdnetasia.com• Viodiwww.viodi.comCompanies Mentionedin this Article:• Frost & Sullivanwww.frost.com• International Data Corporationwww.idc.com• Gartnerwww.gartner.com46 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 47

educationPeking Univ.to Become aWorld Centerof LearningTo Rival Oxford andHarvard UniversitiesBy Vinti VaidOver the last decade,China has been onthe fast track to creatinguniversities that willrank as world-class centersof education and seats ofhigher learning.Peking University is poised to be a firstclass university along the lines of Harvard,Oxford and Cambridge on this side of thehemisphere. The university will soon havea new teaching hospital, an economics department,and an Executive MBA wing. AnEnglish language school will also soon commence.Peking University is the realizationof a long ambition for Ivy League methodsof schooling in China.China has long nurtured the goal ofqualitative change in its educational institutions.However, what catches one’s interestis the immense proportions on which theeducational landmarks are being planned.China’s intended educational vision is thatthe students coming out of such premierportals will represent China’s new workforcein the near future. Such vision indicatesthat China now wants to move up thevalue chain of the world economy.China’s education dream modelsChina wants its future workforce to bedriving the value chain, much as how Japanhad done in the decades after the SecondWorld War, and continues to do so today.However, the model China is trying to emulateis based more on the recent success storyof Taiwan. The 1990s saw Taiwan go fromassembling electronic gadgets to being thedriving force behind designing, manufacturingand supplying of popular electronicgadgets and devices used in global markets.China has analyzed Taiwanese footprintsin bringing in a greater value education byintroducing qualitative education with emphasison modern methodologies, and it isnow incorporating this successful modelinto its own educational vision.Icara | Dreamstime.comWhat the expansion willmean to the outside worldThe point of emphasis here is that theseexpansion plans for frontier education aremassive. What may not be so obvious to theoutside world is that these new plans aregoing to redefine higher education trendsin the near future. Take, for example, thepotential direct impact on UK universities.Presently there are more than 50,000 studentsfrom China, studying at British universities.Each of these students is important tothe British economy, as they contribute substantiallyto the dwindling income of thesehallowed universities. However, these substantialnumbers are set to drop as China’sbirth control efforts are finally paying dividends.With the one-child policy, not onlyhas population growth dropped drastically,but so have the number of students signingup for higher education at UK universitiesthis year. The result is that the esteemedUniversities in Oxford and Cambridge areheading towards further ‘cash crunch’.The Chinese way to increasingits educational capabilitiesIn the next decade, China is set on thepath to increasing the number of foreignstudents attending its universities to awhopping 150,000, making it one of thelargest education providers on this side ofthe hemisphere. The vision is for ChinaUniversities to be as important to potentialglobal students as a Harvard MBA program.What China is doing is creating an educationhotspot. It is attracting the best mindsin universities across the world, particularlyBritish professors, researchers, and chairpersons,with attractive salaries of up tosixteen thousand pounds a month, alongwith opportunities for research with cutting-edgeinfrastructural universities. Thestarting point will be the world class HongKong University, then to spread outwards toother universities in Shenzhen, Beijing andsoon Shanghai.Focus subjects atthese universitiesThe faculties that China will be focusingon are core subjects such as higher engineering,research, science, pharmaceuticalsand technology. To China, these will be thesectors from which hundreds of thousandsof its workforces will be coming from, andthey will lay the foundation of a markedlydifferent economy. This will translate intohigh net-worth industries similar to whathas been happening in capitalist economiesin the west.Aiding China’s great march towardshigher education are entrepreneurs likeWill Vanbergen, from British EducationLtd., who began his company to help talentedand skilled Chinese find the right highereducation universities in England such asEton, his alma mater. He has defined howeducation is the root to decreasing the gapbetween China and the western world. Assome of the students he assisted have said,he and his organization are the bridge formost Chinese who are ignorant of the examlevels and the application process in suchuniversities.The presence of such organizations isquickly forging the part of private playerscontributing to China’s plan of becomingthe largest educational centre for foreignstudents in the world. British Education Ltdalone has forged the growth of three Britishuniversities campuses being openedin China. Qingdao College is a prime exampleof a typical British boarding school,developed by realtors from China, for localmiddle income Chinese who are unable toafford education abroad. With boarding feesat Qingdao approximating ten thousandpounds annually, it is a golden opportunityfor Chinese with their deep cultural preferencefor quality academic education to benefitfrom such ventures.Challenges to the growth pathHowever, China has an uphill task on itsroad to achievement. The mode it is adoptingis by offering sophisticated infrastructurewith academic caliber to match. In theinitial phases, the foreign students will learnChinese while being heavily subsidized bythe government with scholarships. This willessentially create pro-China student groupswho will drive future opinions about China,thus becoming important pivots that redefineChina to the western world.Chinese educational plans are certainlyfull of challenges. It is a fundamental drawback,even amongst the elite students inChina, that speaking in English does notcome naturally to them. Besides, Chinesestories of plagiarism are infamous and itwill take years of original thought developmentbefore the world accepts Chinesecredentials. Moreover, the poor quality ofteachers at the schools is a definite imagehindrance, as poor teaching skills translateinto poor student growth and this affectshigher education. The current educationsystem does not encourage independentthinking, and there is as yet too much rotelearning in the system.Overcoming challengesUnless China can overcome the limitingeducational policies at the grass root level,the superior quality of higher educationwill not reach the common student. For domesticstudents to break into the mould ofinternational education, the education systemat the secondary and lower levels needsa revamp. Improving independent thinkingat secondary level will translate into freethinking individuals at the echelons of thefrontiers of science, technology, pharmaceuticalsand engineering. Attracting foreignstudents for higher education and dreamingof a Princeton and an Oxford in Beijingand Shanghai are definitely commendablevisions for China’s educational policy makers.However, approaching this dream byovercoming the inherent flaws is the onlyway forward.At the bottom of these educationally expansivedreams is the underlying principleof Confucian thought – namely, that educationand knowledge empowers. China ison the right track to redefine its role in theglobal scenario. Riding high on the dreamof a world class Peking University is motivatingand definitely a reverse brain drainis now happening as more and more Chineseare finally packing their bags to returnto premier universities right here in theirhometowns. A-PQJoseph Baladiaby victor ficJoseph Baladi grew up in Brazil and moved to Australia at the age of eleven . His career then tookhim to New York City, Mexico City, Tokyo, and Singapore. Joseph developed a broad view of values,consumer behavior and an appreciation for the power of brands to contribute to a company’s success.He has provided brand building advice to major global firms, such as Procter & Gamble, Mars, andCoca-Cola. Now based in Singapore, many praise him as the loudest voice advocating powerful Asian brands. Joseph has writtenhundreds of thought provoking articles on leadership for publications around the world. The Brutal Truth About Asian Brandingis his first book. He can be contacted at jbaladi@brandasian.com.Joseph gave this exclusive interview to Victor Fic, our special correspondent for economics and politics.Offering Straight Talk on an Asian WeaknessWhat does the termbranding mean?It means “process”. Not advertising, certainlynot “logo”, but rather, a process thatis started and maintained from within theorganization. The central goal is self-definitionof “ purpose “ and customer promise.Equally importantly, it means figuring outhow to consistently deliver on these concerns.Some critics complain that theweakness of books on branding isthat they only address the ‘how’question, whereas you focus onthe ‘why’. Your response to this?My book focuses on the bad practicesthat are arresting the development of Asianbrands. Among other things, Asian brandingis incapacitated by the dual challengesof CEO ignorance about branding and thirdparty branding advisors who poorly educatethem. The reasons range from AlphatypeCEOs who feel they know everythingabout branding to consultants who are willingto tell them what they want to hear, tocommon variety poor competencies amongproviders. And yes, I do spend sometimediscussing the “why” in my book . Thisincludes revealing that the real value ofbrands exists within a “cultural” context- meaning that brands help people definethemselves.You promise the reader thatyou will expose “brutal truths.”What are they?There are many brutal truths that I identifyin the book. And what is important tounderstand is that most are somehow connected.This means that when somethinggoes “south” it triggers a chain reaction thatcreates vicious cycles. For instance:• Branding is not created by third partyproviders or by an external influenceslike advertising;• Branding is almost entirely and exclusivelyan internal process;• Branding and advertising are connectedbut certainly NOT the same;• The branding phase delivers, amongother things, the “Brand Blueprint”.This should be the biggest ingredientin the “communications strategy”created for advertising. But itis not;• A great deal of advertising in Asia is“off-brand” mostly because it is createdwithout brand blueprints;• Most Asian CEOs are unaware ofmost of this.Name names, Joseph. What aresome of Asia’s merely goodbrands that fall short of great?What are the latter brands?As far as brands that “fall short,” I don’tname names any where. But many companiesare blazing positive trails for others tofollow, like Singapore-based Eu Yan Sang.By envisioning a different future it not onlyredefined itself but the entire TraditionalChinese Medicine category. Banyan Tree isanother example. It is a luxury hospitalitybrand that refused to copy western luxurypositioning models, and instead not onlyembraced its “Asianness” but also pioneeredenvironmental consciousness in thecategory.What causes this flaw?If by flaws you refer to the reasons thatcontribute to poor branding in Asia, I identify5 key reasons in the book:1. Myopic CEO leadership;2.3.4.Corporate culture is by default, ratherthan by design;Charlatan brand practitioners;Performance of government agencies;5. Advertising agencies’ lack of brandingcompetencies.You warn that weak regionalbrands will slow economicgrowth in Asia. Is this anoverstatement or can youargue your point?Economic growth is often and justifiablymeasured by consumer consumption. Consumersmostly buy brands. It seems counter-intuitivethat the Asian economic boomcan continue on the back of consumer attractionto western brands, which is thepresent situation. Asian and Chinese brandsmust rise to maintain momentum. I amsure they will in time. Overall CEO educationand books like mine will help.Are you one of the few peopleringing an alarm here?I am one of the few people willing tostand up and tell Asian CEOs what theyneed to hear instead of what they want tohear. I want to believe that there are legionsof CEOs who are receptive to straight talk -even blunt talk. These individuals want to“know” .You want Asian CEOs to thinkdifferently about branding,that you want to see a revolution.Meaning what?The kind of unprecedented global changeunderway is so massive, so huge in scalethat it literally can’t be seen by many. It’sthat big. It’s like needing altitude and distanceto recognize events - as well as theimplications and opportunities.The most visible manifestation of the opportunitiesare in how the so-called Asianor Chinese Century is defined. If the pennydrops and sufficient Asian CEOs recognizethe power of branding, the Asian Centurymight have a similar impact on the lives ofpeople around the world that the Americancentury did - that is through its brands,commercial and otherwise. This is wherethe real prize for the Asian/Chinese centurylies.It is easy to demand change,but how do you propose toachieve this?We do it one visionary at a time. We needcourageous leaders, particularly in Chinaif the “Made in China” problems are tobe overcome. They exist and will lead thechange forward. A-P48 | A-P BUSINESS & TECHNOLOGY REPORT A-P BUSINESS & TECHNOLOGY REPORT | 49

New & NotableShadows & Trolls:Industrial Espionage, IntellectualProperty and International Litigationby Michael PaikManaging EditorAt (intellectualventures.com),one can find a copy of the complaintfiled by Intellectual Ventures against,among others, Hynix Semiconductorof Korea. Intellectual Ventures, basedin Bellevue, Washington, seeks jury trialsand unspecified damages in three lawsuits,according to papers filed in federal courtin Wilmington, Delaware.The firm’s founder and chief executive officer is Nathan Myrhvold,the former chief technology officer of Microsoft Corporation.Since its founding in 2000, “Intellectual Ventures has purchasedmore than 30,000 patents” and “earned nearly $2 billion by licensingthese patents,” according to court papers.Separately, South Korean police are investigating possible industrialespionage after notification by the Indonesian governmentthat intruders were discovered in its delegate’s Seoul hotel room. Itis suspected that several officers from South Korea’s National IntelligenceService broke into the Indonesian delegation’s suite at theLotte Hotel in Seoul. Two men and one woman are accused of lookingat a delegate’s laptop computer and attempting to download informationto a USB memory stick. Apparently, they were disturbedby a returning delegate. Some South Korean media report that thecomputer belonged to an aide of Indonesian Economic MinisterHatta Rajasa. It’s alleged that the three people were attempting toaccess data related to the potential sale by South Korea of its indigenousT-50 Golden Eagle jet trainer.As reported by the Chosun Ilbo, a major Korean newspaper, theNational Intelligence Service (NIS) agents who broke into a hotelroom of a visiting high-level Indonesian delegation were operativesbased with the agency’s industrial espionage team, according to agovernment official. He said the team is responsible for preventingdomestic industrial secrets from being leaked overseas and gatheringinformation both at home and abroad that is deemed sensitiveto national security.The NIS overhauled its organizational structure in the fall of2009 and transferred agents in charge of spying on North Koreato gathering sensitive industrial and scientific information andother special operations. The role of the industrial espionage teamwas bolstered because Korea was increasingly becoming a target ofcorporate espionage as a growing number of Korean businesses acquiredcutting-edge mobile phone and semiconductor technology.But the NIS is facing mounting criticism from government officialsbecause talks with the Indonesians about the sale of weapons weregoing well, with the visiting officials asking Korea in a meetingwith President Lee Myung-bak to serve as a major partner in theSoutheast Asian country’s economic development plans. Critics saythere was therefore no reason for the NIS to intervene.Export of the T-50 Golden Eagle supersonic trainer jet has beena long-cherished dream of the Korean government. Developed byKorea Aerospace Industries in collaboration with Lockheed Martinover a 10 year period starting in 1997 at a cost of W2.8 trillion,the T-50 is the country’s first supersonic trainer jet and is equippedwith top-notch electronics equipment. These features had stokedhopes of exports reaching around 1,000 units. The Air Force bought90, but that was not enough to recoup the investment, making exportcrucial. The problem is the high price tag of US$25 millionper jet. Although the T-50 boasts superior performance to Italy’sAermacchi M-346 Master trainer jet, the Korean plane has lost to itsItalian rival on several bids due to the high price.When he was president-elect in January 2008, Lee asked theruler of Abu Dhabi to buy T-50sbut was unsuccessful. Lee thenpitched the T-50 to Poland duringhis visit to Warsaw in 2009and failed as well. Last year, hewooed Singapore by invitingthe country’s leader to the G20Summit, but failed again. Hethen set his sights on Indonesia.Lee pushed ahead with avisit to Bali because rejectingan invitation from IndonesianPresident Susilo Bambang Yudhoyonocould have hurt thepotential sale of the T-50 andother bilateral pacts. The twoleaders there forged a defenseindustry cooperation pact thatled to the visit of a high-leveldelegation to Seoul last week.Perhaps that deal would havebeen signed if it were not for this botched attempt at espionage.The NIS director has come under pressure to step down followingthe reports. No comment has come from the Indonesian Embassyhere except to say that they asked the Korean side to look into thecase. While commenting about the level of agents working for theNIS, one Western diplomat pointed out that it is not the first time aKorean agent was caught with his hands in the cookie jar, referringto last year’s incident in Libya, in which an NIS agent was caught byLibyan authorities while gathering intelligence.One thing that is interesting about these two stories is the differingapproaches to offensive tactics in a world of sensitive information,technology and potentially large financial gains. Herein Korea, the NIS has been tasked with a leading role not only incounter-measures and defenses, but also (apparently) in offensiveefforts at gathering sensitive industrial information helpful to Korea,Inc. Typically, one would expect that the private sector wouldbear the brunt of such efforts, and that the international legalregimes in intellectual property protections and litigation wouldbe the primary tools for such work, as well as sufficient pay andincentives, and effective risk management systems at the corporationsthemselves.Patent trolls such as Intellectual Ventures understand this systemand work it very well, as evidenced by the suits against Hynixand others. With regard to defense, to the extent that Korean industrialconcerns are unable to defend against such suits, and endup paying license fees in settlement, they’ve failed in what’s reallypart and parcel of the high technology, high stakes game that istoday’s global economic system, where information and technologiesare increasingly valuable, and simple “hard work” and cheaplabor don’t suffice.Intellectual Ventures is also active in Korea, and at one point,the NIS reviewed their activities as well, as it was argued that theoptioning of Korean technologies (via contracts with the variousresearch institutes and universities in Korea, whose activities arelargely state-funded) could constitute a national security threat. Ithought that argument was weak then, and can see now that theuse of blunt instruments such as the NIS in protecting (or indeed,augmenting) Korea’s intellectual property base may ultimatelyprove ineffective and potentially counter-productive.What’s needed, therefore, is a much more sophisticated approachto industrial espionage, intellectual property and internationallitigation, where industry plays a larger role, supplementedperhaps by assistance at the national level. Dependence, however,on a state-run organization with limited capabilities and capacitiesis clearly not working.After all, the fact is that sensitive information, even if adequatelyprotected by law and security, is more often sold by underpaid insidersthan it is stolen by the cloak and dagger method. A-P50 | A-P BUSINESS & TECHNOLOGY REPORT