ad info




Asiaweek
 home
 intelligence
 web features
 magazine archive
 technology
 newsmap
 customer service
 subscribe
 TIMEASIA.COM
 CNN.COM
  east asia
  southeast asia
  south asia
  central asia
  australasia
 BUSINESS
 SPORTS
 SHOWBIZ
 ASIA WEATHER
 ASIA TRAVEL


Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

AsiaweekTimeAsia NowAsiaweek

MARCH 3, 2000 VOL. 26 NO. 8

Key To Reform
The Internet revolution unleashes a sea-change in Asian business

Last week's stampede by investors to buy shares in Hong Kong tycoon Li Ka-shing's Internet venture Tom.com, a China-related portal, brought back memories of the red-chip mania just before the territory's handover to Beijing in 1997. Reportedly half a million application forms were snapped up within hours by punters eager to board the bandwagon. Indeed, investors are pumping billions of dollars into Asia's mushrooming Internet stocks, anxious to get in on the international gold rush. On the surface, it would appear to be a colossal waste of money. Many of the region's Internet startups offer little more than the most rudimentary services. Assets are few and revenues are scant. It would be easy to dismiss the whole thing as just another stock-market fad, a way for a lot of people to get rich quick - but only on paper.

    ALSO IN ASIAWEEK
Cover: The Scapegoat?
Blamed for the riots surrounding the fall of Suharto, controversial ex-general Prabowo Subianto tells his story
- Investigation: No single "mastermind" was behind the May 1998 turmoil. There were many players, and many plots
- Insight: Re-examining Prabowo's record in East Timor
- Insider: How the general and son-in-law benefited - and was compromised - by being part of the First Family

Editorial: The Internet is the most compelling agent of economic reform
Editorial: A good year for Kim Jong Il - but watch out

Malaysia: The real campaign for national leadership heats up
- Anwar: A decision on Mahathir's testimony is put off again
- Shadows: A play looks at Malaysia's troubled political soul

Hong Kong: The former colony is starting to trust the motherland

Taiwan: Beijing demands unification talks - or else

Japan: Obuchi raises (but doesn't fire) the starting gun for polls

Cambodia: A culture of violence and impunity undermines justice

Fashion: The spirited new styles suit Asia's mood
- Accessories: The rule is - there is no rule
- Menswear: Casual, chic - and inspired by womenswear
- Kenzo: The Japanese couturier bids farewell to the catwalk

Tom.com: Investors rush for a piece of a Hong Kong company with no history, few employees and lots of hype

Kosdaq: Korea's over-the-counter stock market soars

Scandal: Can Manila recover from the BW Resources fiasco?

Investing: Betting on the New India

The Net:
The freebie formula gets tested in Singapore

Cutting Edge: A keyboard you can fit on your Palm

Newsmakers: Japan's crown prince vents his anger

Viewpoint: To fight corruption, reform China's politics
    RELATED STORIES

Asiaweek
If it's in Asia, it's in Asiaweek

TIME Asia

Analysis and commentary from the Asian Edition of TIME Magazine

CNN.com/ASIANOW
Asia's most comprehensive source for latest breaking news and information


Asia's Internet fever, however, is much more than that. And it is not just because the Net and e-commerce are clearly here to stay. Significantly, the advent of the Internet is spurring reforms in the region's corporate landscape along lines that international economic experts have been advocating since the Crisis descended in 1997. The changes, however, are being driven by market forces rather than any high-profile requirements by the International Monetary Fund or government initiatives. In other words, the Internet revolution is altering the way Asia does business - but through the back door.

The evidence is all over the place, from restructuring to compensation policies to management practices. Last week, Japanese electronics giant Toshiba unveiled a major reorganization plan to focus its business strategies on such fast-growth industries as semiconductors and Internet-related services. The latter has become a major new profit center for the company. The restructuring could, said president Nishimuro Taizo, require layoffs in the land of lifetime employment. And some profitable businesses may be dropped so that Toshiba can concentrate on industries it feels will lead it in this new century. In South Korea, Samsung has not only set up an online shopping mall for employees, but also adopted e-commerce and networking technologies in many of its divisions, using information technology (IT) to trim bureaucracy and headcount.

The Net craze has brought fundamental change even to companies less technology-linked than the major electronics players. Conventional, old-line concerns that once had nothing more than a passing interest in high technology are starting Internet subsidiaries. In Hong Kong, it seems like every big property company is scrambling to "dot.com" itself. Tom.com, for example, is nearly two-thirds owned by property giant Cheung Kong and sister firm Hutchison Whampoa. Also preparing to list is Sunevision, which groups new high-tech subsidiaries of Sun Hung Kai Properties.

The Internet boom is already turning traditional ways of doing business in the region on their heads. Take stock options. Previously, they were almost unheard of in Asia, as owners of businesses wouldn't dream of giving away a part of the family patrimony to non-clan employees. But the need of new technology ventures for appropriate talent - and its scarcity - has begun to dent that tradition. Increasingly, stock options are becoming a part of the employment packages required to secure such people.

The high-tech revolution is also changing management styles. In launching their new ventures, many companies have had to import managers from Silicon Valley or other IT centers, usually in Western countries. In Hong Kong, it seems that every such business has its coterie of whiz kids. These managers bring a more open approach to running a business, as well as a leaner, flatter organizational structure where more responsibility and initiative rest with younger and lower-ranking staff members. More than ever, ideas and knowledge, rather than pedigree and seniority, are what determine an employee's success - largely because the stakes, for the company, are so high. And the use of e-mail has reduced the need for middlemen even in non-Internet ventures, which is trimming a lot of the traditional fat in Asian business.

For a long time, a key economic weakness of the region was its paucity of venture capital to fund bright but risky ideas, and the difficulty of money-raising through listing on the traditional bourses. Now the situation has been reversed. Nasdaq clones are proliferating throughout Asia's major financial centers, specifically designed to facilitate start-ups and high-tech ventures. It is no longer a problem of too little capital, but possibly too much of it chasing too few genuinely good opportunities. And amid the raft of new listings, Asian companies have been obliged to become more transparent and adopt higher accounting standards to attract international investors.

Asia's relatively quick rebound from the Crisis has sparked much concern that the region may be tempted to forgo painful but ultimately beneficial economic reforms. Now, the Internet revolution may have made that a moot point, forcing sweeping changes ranging from corporate restructuring and increased transparency to more flexible management styles and merit-based promotion yardsticks. The region looks set to come out much the better for it.


This edition's table of contents | Asiaweek home

AsiaNow


Quick Scroll: More stories and related stories
Asiaweek Newsmap: Get the week's leading news stories, by region, from Newsmap


   LATEST HEADLINES:

WASHINGTON
U.S. secretary of state says China should be 'tolerant'

MANILA
Philippine government denies Estrada's claim to presidency

ALLAHABAD
Faith, madness, magic mix at sacred Hindu festival

COLOMBO
Land mine explosion kills 11 Sri Lankan soldiers

TOKYO
Japan claims StarLink found in U.S. corn sample

BANGKOK
Thai party announces first coalition partner



TIME:

COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state



ASIAWEEK:

COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness


Launch CNN's Desktop Ticker and get the latest news, delivered right on your desktop!

Today on CNN
 Search

Back to the top   © 2000 Asiaweek. All Rights Reserved.
Terms under which this service is provided to you.
Read our privacy guidelines.