Developing Economies

Issues relating to IT and innovation for development or in developing countries.

China’s Dangerous Digital Agenda

February 23, 2015
| Blogs & Op-eds

Whether it is data or copyright, the Internet of Things or privacy, the EU and the US must agree on a common path for technology policy – centered on shared values like democracy, the rule of law, and freedom of speech. Otherwise, China, with its focus on mercantilism and restricted freedom of information, will soon be dictating the terms of trade in the world's fastest-growing economic sector. If open and pluralistic societies do not stand up for an open Internet and market-based trade, who will?

The Foreign Investment Climate in China

January 28, 2015
| Testimony and Filings

Rob Atkinson testified before the U.S.-China Economic and Security Review Commission at a hearing on the foreign investment climate in China. Atkinson noted that since President Xi Jinping assumed power in 2012, China has rapidly accelerated its efforts to promote “indigenous innovation” not just using the “carrot” to help Chinese firms but also the “stick” to harass foreign producers, to the detriment of the American economy and the global innovation ecosystem. Further, absent concerted action soon by the United States and its global allies, we will have to live with the long-term negative consequences of China’s actions on the U.S. economy and national security capabilities.

The share of U.S. companies adversely affected by restrictive Indian policies rose from 18.8 to 26.1 percent between 2007 and 2013.

If tariff and investment restrictions were fully eliminated and standards of IP protection were made comparable to U.S. and Western European levels, U.S. exports to India would rise by two-thirds, and U.S. investment in India would roughly double.

The Indian Economy at a Crossroads

January 22, 2015 - 11:30am - 1:00pm
Observer Research Foundation
20, Rouse Avenue Institutional Area
New Delhi

Indian Prime Minister Narendra Modi’s first eight months in office has brought a reenergized focus toward boosting Indian economic growth. Read more »

The Indian Economy at a Crossroads Presentation

January 22, 2015
This event was a discussion of policy reforms needed to help India achieve more robust and sustainable levels of innovation, economic, and employment growth.

Indian Prime Minister Narendra Modi’s first eight months in office has brought a reenergized focus toward boosting Indian economic growth. Taking office after both Indian GDP and productivity growth reached near-decade lows in 2013, the Modi Administration recognizes that significant reforms are needed if India is to restore the “Indian Economic Miracle”—the nearly two decades of double-digit growth the country experienced in the 1990s and 2000s. Read more »

Mobile Telecom Offers Enormous Benefits, Finds New Report

January 15, 2015
| Blogs & Op-eds

Rapidly advancing technology and strong investment has meant that mobile technology use has exploded around the world in the past 5 years. This technology has brought substantial benefits to rich and poor users alike, and has also been a key factor in small and medium-sized business growth.

IT Sector to Defy China Slowdown with 8 Percent Growth in 2015

South China Morning Post
China’s poised to record the second-fastest growth, behind India, in the global ICT market this year.

US-Cuba thaw could benefit farmers, energy and travel firms

Associated Press
The transformation of U.S.-Cuban relations could have a transformative impact on Cuban technology and innovation.

The Middle Kingdom Galapagos Island Syndrome: The Cul-De-Sac of Chinese Technology Standards

December 15, 2014
| Reports

Read the Chinese translation of the executive summary.

China has made the development of indigenous technology standards, particularly for information and communications technology (ICT) products, a core component of its industrial development strategy. China has done so believing that indigenous technology standards will advantage China's domestic producers while blocking foreign competitors and reducing royalties that Chinese firms pay for foreign technologies. But, by using indigenous rather than global technology standards for ICT products, China risks engendering a “Galapagos Island” effect that isolates Chinese ICT products, technologies, and markets from global norms, as Japan experienced to the significant detriment of its ICT sector.

This report explains why the development and adoption of global, interoperable technology standards matters. It then explores Japan’s experience with the “Galapagos Island Syndrome,” explaining how that nation’s isolation from global technology markets ultimately inflicted significant damage to an industry that had once been among Japan’s most vibrant.

The report then turns to examining China’s standards development approach and identifies four central shortcomings: 1) it risks picking the wrong standard; 2) it risks delays in standards development (often caused by bureaucratic inefficiency or rivalry) that cause both missed market and economic growth opportunities; 3) it encourages a belief that Chinese markets alone are of sufficient scale; and most importantly 4) even when and if it does succeed in developing indigenous standards, it risks the Galapagos Island  effect that isolates China’s ICT products and markets from global ones. 

The report concludes by offering recommendations for how China can improve its approach to standards development in a way that benefits China’s ICT enterprises, China’s consumers of ICT products, and even the broader global economy. Among other recommendations, it notes that:

  • China should adopt an “open participation model” in product standards development processes and frameworks that is transparent, open, and non-discriminatory for all stakeholders.

  • China should remove policies that inappropriately withhold access to standards-development organizations (SDOs) or other Chinese standards-making forums based on where a company or organization is headquartered.

  • China should align its standards (including national, industrial, and provincial standards) with international standards and use international standards as the basis of Chinese standards and regulations wherever practical. China should not make minor alterations to existing international standards with the intent of developing a China-only standard. 

  • Technology that is not developed or registered in China should still be considered for inclusion in Chinese standards. 

  • Wherever the majority of the rest of a global industry sector has developed a voluntary consensus standardization forum as the preferred venue for the development of certain ICT standards, Chinese industry should join the rest of the sector in the development and use of those standards.

China’s ICT Standards Policy Risks Global Technology Isolation

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