Geography of World Commerce

Demographics and World Commerce Paper

Josephine L. Barrales

GEO 150

Mr. Bruce Lee

June 6, 2005

The recent development of the Internet has created a technological and commercial revolution throughout the world. By essentially shortening the distance between companies and consumers, the Internet has created a competitive global market unlike any other. Many countries are fighting hard to become major players in this potentially lucrative venue. Over the past five years, Western nations have had a considerable advantage in this race, since the concept of the Internet originated from the Western Hemisphere. Yet many Asian countries have a huge market potential for on-line

businesses, and have been steadily catching up to the West and are currently within striking distance of the West's lead. The world has been increasingly interested in the market potential of the Asian Internet, especially the various Asian nations themselves. In the past three years, a veritable battle has broken out amongst a handful of Asian nations that are all vying for the coveted position of becoming the "Asian Internet Superpower."

My paper will discuss the role of Japan, one of the four major e-commerce players (Japan, China, Hong Kong, and Singapore). Each country or region has unique strengths to aid them in the e-commerce race. For example, Japan has one of largest economies in the world, which means that it has the money and resources to create reliable infrastructures for the development of e-commerce. China is also likely to become the e-commerce epicenter of Asia with its rapidly growing economy, fast building infrastructure and immense human population. Hong Kong, a capitalist territory of China, is currently one of the strongest international finance and trading centers in the world. With its well-developed economic and technical infrastructure, it also has the potential to become the next e-commerce leader. Lastly, Singapore has one of the highest percentages of computer literacy among workers and some of the best telecommunication networks in the world. E-commerce and Internet development has become an integral component of the government's strategy to turn Singapore into the e-commerce hub of Asia. I have examined Japan's historical trends, socio-political developments, current IP, and copyright regulations in e-commerce, and how these various factors will affect the development of Japan's Internet markets.

Japan: As the second largest economy in the world after the United States, and by far the biggest economy in Asia, Japan certainly possesses impressive economic and political clout. Japan alone represents well over 60% of all of Asia's economy. Indeed, despite its deep recession in the 1990's and its continuing economic struggles today, Japan continues to maintain a strong position in the global economy as well as a prominent role in the high technology industry. The Japanese government realized the importance of the Internet and how far behind their country was in developing and implementing web-based technologies. Disliking the idea of becoming second-rate in any technology and quickly realizing the Internet's enormous potential for financial and social gain, the Japanese government began creating initiatives and laws to accelerate the growth of the Web. Since then, Japan's technical infrastructure and web presence has blossomed. Between 10%-20% of the world's Internet markets are now based in Japan. The number of Japanese web users is also steadily increasing and diversifying across gender and generations. There is, in fact, a strong and very relevant parallel between the expansion of the Internet and the ongoing shift in the nation's sociopolitical atmosphere from an ultra-conservative "Old Japan" regime to a more liberal "New Japan." The question now is whether or not Japan can construct an Internet and e-commerce infrastructure fast enough to win the singular title of "Asian Internet Superpower."

Foreign companies were almost never allowed to set up shop in Japan, and international trade was very closely monitored. Heavy trade tariffs were imposed on foreign imports to ensure the success of Japanese goods and international trade partners were always watched with a wary eye. Needless to say, Japan was extremely cautious regarding any foreigners, especially when it involved business and finance. Foreigners were disliked and excluded from all forms of Japanese business. This austere sociopolitical atmosphere is what defined the "Old Japan" before the 1990's.

Keep in mind that the concept of a truly integrated, global economy is an invention of only the past decade or two. While it would probably be economic and technical suicide to segregate oneself from the world today, isolationism was not so dangerous twenty years ago. Indeed, Japan was certainly successful enough to build itself into one of the most aggressive, powerful economies in the world and with manufacturing giants like Sony, Panasonic, and Hitachi, Japan was certainly not lacking in technical prowess either.

Japan's socioeconomic system is today a lumbering giant. At the same time, countries such as the United States, and some countries in Asia, attribute much of the success they have had in revitalizing their socioeconomic structures to the increasing sophistication of their info-communications. This realization prompted the Japanese government to consider seriously some aggressive Internet and e-business initiatives.

To encourage foreign investment, the Japanese economy has been deregulated. The rules for interconnection have been established and the Nippon Telephone & Telegraph Corporation (NTT), Japan's erstwhile telephone service monopoly, has been restructured into three separate companies so as to allow cheaper and easier access to network services. The government has also stopped playing favorites with businesses. Instead of focusing on just a few corporate giants, the government is now lending a hand to venture initiatives and smaller businesses. Low interest loans have been doled out to many companies, enabling them to acquire the equipment required to join the world of cyber-business. The exclusivity of