Networker: Picking winners
Since the deregulation of the United States telephone system in the 1980s, a saying has emerged in the information technology field: "Governments shouldn't try to pick winners".
Instead, the wisdom goes, governments should leave it up to the market to see which technologies dominate and which disappear. The uselessness of many technical standards developed by the UN-linked International Standards Organisation is held up as an example of how bad government interference can be.
In fact, neither committees of government bureaucrats nor the market have had much luck with the development of the internet and related technologies over the past decade. Nevertheless, there is one area in which some governments continue to "pick winners": namely, the international division of technological development.
No surprises: rich (advanced capitalist) countries are doing better than poor (Third World) countries. The former socialist countries are generally distinguishing themselves as suppliers to the advanced capitalist countries of very highly trained technologists. Even if "the internet changes everything", the same old divisions remain.
The advanced capitalist countries are not without their disputes. One of the most intriguing has been the fight between the US and France.
France has traditionally banned the use of encoding systems (encryption) that it can't break on its territory. Foreign, especially US, multinationals are unhappy to send anything through France under those circumstances, given the history of government-sponsored industrial espionage. (France, of course, shares this habit with most countries, including Australia and the US.) Only a few years ago the Pentagon boycotted a French air show in protest against this espionage. Now the French security lobby appears to have given in to commercial forces, accepting unbreakable encryption.
The British government, after pursuing a pro-regulation position for the past few years, under both the Conservatives and Labour, is now heading in the same direction as France.
On the poor country side, in Asia, governments are dreaming of capturing some of the real money in the internet market. India and Malaysia, in particular, have developed considerable infrastructure and tremendous hype about their high-technology offerings.
The Malaysian government has developed a plan for a 750-square kilometre US$20 billion multimedia super-corridor. It has promised a new capital city, Putrajaya, with an electronic-enabled parliament, cyber laws to protect intellectual property, a high-tech stock exchange based on the US NASDAQ exchange, the world's tallest building and a futuristic Kuala Lumpur international airport. Microsoft head Bill Gates, futurist Alvin Toffler, Oracle's Lawrence Ellison and Sun Microsystems' Scott McNealy are on a 41-member advisory panel.
The economic crisis of 1998 has left these plans in disarray. Combined with this, the political crackdown of the Malaysian government is causing hesitation among some of the people involved. After the arrest of government deputy leader Anwar Ibrahim, the government ordered all cybercafes to register users and provide the information to the police.
Toffler lodged a protest stating: "The essence of Silicon Valley is not fibre optic cables ... it is the creative, innovative drive, with large numbers of people racing to create new ideas. That's hard to sustain in an atmosphere tinged with political repression." What Toffler fails to mention is that it is the wealth of countries such as the US, drawn substantially from exploiting Third World countries, which gives it so much political flexibility.
At the end of the day, while they continue to accept their part in the neo-liberal play, these countries' role is as a source of cheap labour. While both India and Malaysia talk of their future "Silicon Valleys", in practice, wherever they move beyond low-cost factory labour they are destined to provide cheap programming services and call centres for English-speaking First World countries.
The battles for market share in the internet's future are heating up, but nothing to date indicates that the final international division will be anything but business as usual.
By Greg Harris