American businesses have proven to be the most successful at exploiting IT to become more productive and competitive, and companies in Asia should be trying to emulate that model, Singapore’s senior minister Lee Kuan Yew said Wednesday in Singapore.
“IT and WTO (World Trade Organization) have enabled all companies to compete in one global market. Like the Americans, they (European and Japanese companies) will have to constantly reconfigure their corporate architecture and learn to exploit IT to achieve maximum productivity and competitiveness or they will lose out even in their home playing field,” Lee said in a transcript of a speech given at a dinner for the Forbes Global CEO Conference.
Lee cited several aspects of the U.S. business model which use technology to provide a competitive advantage. These include:
– the ability to make decisions on real-time information;
– maximizing the corporate knowledge base;
– cutting transaction costs;
– reaching out to and capturing new markets;
– making feasible new production and delivery systems.
The United States has also prospered because of its entrepreneurial culture, where entrepreneurs can raise capital from IPOs (initial public offerings) and from venture capital companies who also provide management support, Lee said.
Companies in Europe, Japan and Asia will have to adopt these ideas in the globalized world of the 21st century, according to Lee.
“The American model will be brought into European and Japanese playing fields by American companies,” he said. “This will aggravate the conflict between the generations in Europe and Japan where older managers who are more set in their ways are usually unable or unwilling to change and adapt quickly. They will find themselves at odds with their younger colleagues, who are more familiar with IT, aware of what their American counterparts are successfully doing, and eager to catch up.”
Globalization poses additional challenges for Asian nations such as Singapore, Lee said.
“To succeed, every developing country in East Asia has to boost its intellectual capital to nurture entrepreneurship and innovation,” Lee said. “Many U.S. venture capital (VC) firms have opened their Asian offices in Singapore. The VC industry in Singapore now manages a total fund size of about US$11.5 billion. This money will move to where inventiveness is high in the region.”
Lee said that Singapore was taking steps to shore up its competitiveness.
“We recognize that we cannot just adopt and adapt technology developed elsewhere,” he said. “We have to create new technology products and services and be the first to take it to market.”