Oliver Bell’s weblog

As I travel around Asia the term “Creative Economy” is one that comes up more and more frequently, it is a concept that has been around for a while but only recently seems to have earned a place in discussions around information and communication technology here in the region.

The concept of the Creative Economy is a straight forward enough one, the Wikipedia article I have linked above describes the concept as;

The phrase Creative Industries (or sometimes Creative Economy) refers to a set of interlocking industry sectors, and are often cited as being a growing part of the global economy. The creative industries are often defined as those that focus on creating and exploiting intellectual property products; such as Music, books, film, and games, or providing business-to-business creative services such as Advertising, Public Relations and Direct Marketing.

This definition is a very western one and clearly applies well to industry sectors you would expect to find a clear focus around in Europe and North America. In conventional terms it is, of course, also applicable to Asia but when I hear it used here there is also a more relevant local meaning.

One of the challenges that many of the emergent economies appear to share at the moment is around finding ways to protect and capitalize on their traditional industries, including handicrafts, artistry, performance and so on. Many of these traditional industries can be quickly copied and mass produced elsewhere, an ongoing risk for local businesses and livelihoods.

As a result discussions often revolve around how countries in the region might protect both the ownership and integrity of these traditional industries while at the same time planning for the future. In many cases this involves looking at the policy that is needed to help these traditional industries thrive and grow, and the legal framework that has evolve to protect them.

We are left with the question “What has all this got to do with Information and Communication Technology?”

An interesting point of evolution. A common theme appears to be that the work that many countries are undertaking today to build their Creative Economies is being done with the goal of laying the foundations for the development of new industries including ICT.

A strong understanding of the countries business structures, protection of intellectual property, mentorship and solid investment frameworks all helping protect the existing industries that are important today, and prepare countries for the industries that they want to build for tomorrow.

The principal here is pretty straight forward, beginning with a framework that supports the growth of existing industries in the region makes a lot more sense than trying to create a framework for an industrial sector, such as ICT, that represents future as apposed to current growth. At the same time legal and policy frameworks being built today are already taking future needs into account and preparing countries for the exciting future ahead…

Like many other recent weeks, most of the last seven days has been consumed by travel and interspersed with real work at a couple of really interesting events. On the plus side, I did get to undertake part of that travel on SIA’s new Airbus A380, a stunning plane and a stunning experience, returning home on one of their 777s from Christchurch next week just won’t be the same.

Anyway, the first part of the week was spent with colleagues from the United Nations University in Macau attending their ICEGov event, the second part in Sydney where I got the opportunity to participate in the symposium that the University of New South Wales were hosting, looking at the technical and legal aspects of Open XML as they pertain to the needs of Australian users, developers and business.

And to round things off I’m now sat in a hotel room in Sydney, trying to catch up on the events of the week and clear my inbox down to a point where it becomes manageable again, as I am sure you have read before we exchange a LOT of email inside Microsoft.

The ICEGov conference was pretty unique in its makeup, we have been working with a couple of members of the faculty for a little while now on some research questions around eGovernment and Interoperability but this was the first opportunity I have had to visit the school and gain a wider view of the work that is going on there.

Unfortunately I could only stay for the first two days of the event, the sessions I attended looked at elements such as applying formal engineering techniques to eGovernment development, Interoperability through decisions around architecture and technology, eGovernment policy management, and a session on eParticipation which is an area of eGovernment where I personally believe we will see an increasing focus in years to come.

Usually at this type of conference sessions consist of various government or industry leaders presenting best practice based upon recent projects that they have been involved in. These types of events are interesting, it is always good to learn what is going on elsewhere in the world, but every government differs in terms of technology use, social structure, culture and related government policy so it is sometimes hard to see how these best practices can be picked up and put to good use in another jurisdiction.

The format of ICEGov was far more academic in its approach, with each of the sessions being closer to half a day and the format of the content being constructed more as a topic tutorial, drawing on occasional cases where needed. I found every session I participated in helpful, and in every case walked out of the session with a handful of new ideas that I hadn’t walked in with.

Great stuff, and a big congratulations to the organizing team who I know put a lot of effort into pulling this together.

The second event was equally as interesting. The symposium at the University of New South Wales’ CyberLaw Centre has been arranged for some time, about 30 people took part in both halves of the day. The first half was a technical discussion, the second half was looking at the legal coverage for the specification.

As is always the case with these events it was a spirited but constructive discussion with Rick Jelliffe and Matthew Cruickshank facilitating conversations around the technical aspects of Open XML and then Colin Jackson presenting the views of the New Zealand Government on the topic of Open XML and open documents in general.

The conversations during the afternoon session were led by Ronald Yu and Microsoft’s Steve Mutkoski. Good points were made all sides of the debate, and several of us agreed that a post-February beer or two might be a good idea.

I would really like to see more of these types of event in the region. The debate on the Internet sometimes consists of one side throwing a grenade over the wall at the other, then the other side throwing one back. Events like the one at UNSW give everybody a chance to spend time getting into the technical, legal and standardization questions. I know that I learned a few things on the day and I would like to think that some of the other participants did as well. It was good fun, there is always a lot to be gained from open conversation.

When I originally joined Microsoft in 1995 my plan was to stay with the company for about two years, learn what I could and then move back to the financial services industry and work out how to capitalize on what I had discovered.

Two years later, after significant changes brought by products like Windows 95 and the way in which the company embraced the Internet at that point in time it felt like I was working for a very different company, so I stuck around to see what would happen next.

The speed at which the company changes internally and externally is not the only reason that I have continued to work for the same company way beyond the simple goal that I set myself.

As I have mentioned before, some of the early projects that I got involved with were focused on the implementation of electronic government in the United Kingdom, and it was exciting to think about the positive social impact that some of those projects were designed to deliver.

Over the years I’ve been involved with many projects of a similar nature, some of them were customer projects, and some of them more product related in fields such as language support, accessibility and helping bridge the digital divide.

About eight years ago we started to look at other aspects of Microsoft’s role in society, one of those activities involved working with International Data Corp (IDC) and looking at the economic impact of the company in a number of countries around the world.

These studies looked not only at Microsoft as a stand alone company, but also examined other elements such as the number people employed by partners, revenue generated by those companies, tax paid to national treasuries and so on. Basically looking at the entire ecosystem around Microsoft and the positive role of the company in economies where it trades. The interesting headline number that I remember coming out of the original study was the data explaining that $8 of revenue that was generated within the ecosystem around Microsoft for every $1 of direct revenue earned.

On October 18th IDC released the set of reports for 2007 and I have spent the last couple of hours looking through some of the data for Asia, it is pretty exciting to see. Starting with that same headline number for Asia alone now being $11 of revenue for every $1 of revenue directly earned by Microsoft. The data shows that Microsoft’s business model creates a great deal of local wealth along with millions of jobs in countries across Asia.

Let me share some of the headlines with you from the information in my inbox;

Growth in IT investment has generated 3.5 million new jobs in the period 2002 to 2006 and it is projected to add an additional 2.8 million jobs in the Asia-Pacific region alone by 2011. This represents a growth in IT-related employment of 5.5% (CAGR) during the period.

Total IT employment in the Asia-Pacific region is 11.9 million, of which 40% are Microsoft-related jobs.

The market with the highest percentage of Microsoft-related jobs is Korea, where 49% of IT industry jobs stem from selling products that run with or on Microsoft software, or that service and distribute Microsoft software. The greatest numbers of Microsoft- related employees are in China and Japan (1.6 million and 1.2 million, respectively).

The percentages of Microsoft-related employees are significant in all countries, although the lowest are Indonesia with 29% and Vietnam with 19%.

Microsoft itself employs 78,565 people globally, or 0.2% of the world’s total IT workforce, underscoring the importance of the Microsoft ecosystem to job generation.

It is projected that 35,211 new IT companies will be created in the Asia-Pacific region between 2006 and 2011, representing a 2.4% (CAGR) increase over the period. This predicted growth will remain broadly consistent with the 2002 to 2006 period.

In the Asia-Pacific region, for each dollar Microsoft earns, the ecosystem earns $11.18 – including $7.80 in hardware, $1.42 in software and $1.96 in services. The ratio is greater for the BRIC+M (Brazil, Russia, India, China, and Mexico) countries at $15.91 – including $12.52 in hardware, $1.43 in software and $1.96 in services.

The highest ratio in Asia-Pacific is in Vietnam at $20.76 and the lowest in Japan at $8.42.

In Asia-Pacific, the Microsoft ecosystem will invest $15.4 billion in 2007 in their local economies on infrastructure, people, marketing, and business development.

Tax revenues to governments from the Microsoft ecosystem will be approximately $132 billion in 2007. Tax revenue includes value-added or sales taxes, personal income taxes, social taxes, fees and levies, and corporate income taxes.

Total IT tax revenues across Asia-Pacific in 2007 will be $172 billion, or 1.45% of regional GDP.

When I joined the company in 1995 the technology industry was only just beginning to morph into the form that we know today, at that point in time a small number of very large companies dominated every part of the sector and the concept of local partners just did not exist for most of these companies.

Today the success of the information technology industry is really in the hands of local technology providers who take software that is available globally and work out what the local solutions need to be built, which services need to be offered and in turn how best to serve those local markets. As a result of that, as the IDC data shows, these companies play an extremely significant role in any national economy.

There is a lot more to read in the study, if you’re interested follow this link to have a look for yourself.