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The wireless communication revolution could make Asia the center of the economy

By Franz Schurmann Pacific News Service
Tuesday January 02, 2001

“Global wireless communication” appears to be the wave of the future, and the world’s corporate giants are racing for first place. Many observers are betting on the Japanese. Global wireless communication may involve very complex technology, but it simply means you can be at the North Pole with your laptop computer and I at the South Pole with my laptop, and we can communicate with each other as clearly as if we had telephone lines or cables strung between us. 

 

The wireless revolution began with radio a century ago and television a half century ago. Now it’s the turn of the wireless multimedia. 

 

The prestigious French newspaper, Le Monde, has a passion for revolutions, whatever and wherever they may be. In a recent special on the Japanese economy (December 12), it wrote, “Japan once again is catching up with the West, this time through new technologies. Americans and Europeans should stop talking about how advanced they are.” 

Co-author of this article, Philippe Pons, who has long lived in Japan, writes, “Japan’s path towards an information society is going to come up with many surprises.” Global Chinese entrepreneurs, though more cautious, express a growing interest in Japan’s advances in communications. 

The Japanese company in the forefront of this revolution is NTT DoCoMo, the world’s number one mobile telephone company. It launched the “i-mode” that allows wireless connection with Internet – and gained a phenomenal 16 million Japanese subscribers in a year and a half. 

 

It appears confident that its technology works and is competitively priced, so it is now moving quickly into the global market – signing an accord with Hewlett-Packard to develop and sell broadband technology, entering into strategic alliances with AOL, Hutchinson Whampoa in Hong Kong and KNP in the Netherlands. On Dec. 8, it presented itself as the first global communications company able to transmit quality video images, music and information over the Internet. 

 

DoCoMo’s sudden foray into the world comes just as the giant of giant chip makers, Intel, suffered severe losses – more than $1 billion – from what it thought would be the “next generation” RDRAM technology. 

 

But as the Chinese language daily, The World Journal, reported, Taiwan firms are stepping up their “nibbling” at Intel’s dominance. Whereas three years ago the great bulk of chips in PC’s manufactured in East Asia (the world center for PC manufacturing) were from Intel, now over half the chips are non-Intel. 

 

The global wireless revolution must still overcome a lot of technological hurdles, such as transmission difficulties over uneven terrain. But it seems that Japan Inc. has finally decided to put its staggeringly huge financial resources behind this newest advance into the global markets. 

 

Japan’s “bubble economy” burst in 1992. The question arises: why didn’t the Japanese rev up their stagnating economy sooner, despite continual urging from the two Clinton administrations? Instead, it kept on selling more bonds and spending more for civil entitlements. Japan’s ratio of public debt to GDP is now 114:100 – the highest in the world. 

 

Maybe Japan Inc. didn’t move because it recalled looking at a similar situation in the United States in 1994. Clinton came into office in 1993 when the U.S. debt was at heights similar to Japan’s today. The new Clinton administration cut spending, and that helped bring down the debt. But what really reduced the debt was an astonishing surge in Silicon Valley production in 1994, spearheaded by Intel. America became the leader of the global communications revolution. 

 

Silicon Valley pulled along the entire American economy. It was like one railroad train locomotive pulling a hundred cars up a mountain side. Both the Nasdaq and the Dow market averages soared. 

 

Now the miraculous freight train is in trouble. 

 

If the Japanese are right that wireless will triumph over wires in the communications revolution, then it could turn out that Japan will succeed America as the leader.  

 

And given the astonishing economic strength of China, South Korea and Taiwan, it could be the giant East Asian locomotive that pulls the American economy out of its own slump. 

 

Franz Schurmann, emeritus professor of University of California at Berkeley, reads the Chinese, Japanese and French press and writes of their coverage for NCMonline.com.