Technology Recovery in 2010

Asian stocks have started showing an upward climb with the MS CI Asia Pacific Index rising with news of Toyota Motor Corp. and Canon Inc. gaining from the global market recovery.

Toyota, the world’s largest car manufacturer, managed to overcome the loss it forecast and ended up making an operating profit.

Canon, a manufacturer of cameras whose market is mostly outside Japan, has made a quick climb in sales with the U.S. dollar showing recovery. Also, Korean firm Samsung Electronics Co. experienced a rise of 20 percent in sale from America.

“The world’s economy is more resilient than has been thought, and investors are more inclined to put their money in stocks. With the current foreign-exchange level, investors are confident in the corporate earnings outlook,” said Yoshinori Nagano, a senior strategist at Tokyo-based Daiwa Asset Management Co.

The MSCI Asia Pacific Index in Tokyo and Nikkei stocks are showing an upward trend. Other indices like Hong Kong’s Hand Send Index, Taiwan’s Taiex index and South Korea’s Kospi Index have all advanced more than 1 percent.

Economy Revives with Technology Demand

The remarkable growth can be attributed to fast recovery in the technology field. This is confirmed by the fact that South Korea’s economy accelerated, owing to the increase in global demand for cars and electronic gadgets, according to a Bloomberg survey.

Honda Motor Co. also showed similar growth in its car sales with demand increasing in North America. LG Innotek, a manufacturer of electronics parts in South Korea, shared similar a story.

The remarkable recovery in Asian markets does not depend only on technology, it also encompasses the oil, copper and petroleum industries. China’s Jiangxi Copper Co. a copper supplier, PetroChina an oil producer in China and Inpex Corp. an oil explorer in Japan also showed recovery signs. Philippines based Petron Corp. showed profits for the first time since 2007.

Technology stocks are rising with higher expected demand for computers. Toshiba is preparing for high volume production as demand for integrated circuits or microprocessors is expected to increase, according to Intel estimates.

The steady increase in technology-related stocks in the Asia-Pacific region has brought cheers to the markets. With demand increasing for computers and other technology- related items, the Asian market could witness a fast recovery in 2010, said analysts.

Taiwan’s Powerchip Semiconductor Corp. and Taiwan Semiconductor Manufacturing Co. are also among the beneficiaries.

IDC and Microsoft research announced last October that the global economic recovery will be powered by IT in Asia. The IT industry in Asia drives GDP , creates more jobs in the IT industry and software sector, results in the launch of new companies, increases in local IT spending besides contributing to the nation’s coffers in tax revenues.

Figures show that IT spend in 2009 in Asia was in the $300 billion range, which is 21 percent of the global IT spending. There will be a rise in employment rates in 2010 owing to the IT industry besides the creation of 32,000 new businesses by 2013.

“Innovation in technology will play a vital role in enabling new business opportunities and employment growth throughout Asia. IT will be a catalyst for the wider economic recovery, as companies take advantage of technology solutions to improve their cost base and service outcomes,” said Microsoft’s president of Asia Pacific, Emilio Umeoka.

Asia’s strong points remain with hardware manufacturing and software development expertise. The ID C study also found that cloud computing was being adopted in a big way in Asia. Companies are able to reduce capital spending as they can leverage Internet-based services including data warehousing and storage. Although in the starting stages, cloud computing and other new technologies will help Asian companies realise greater profit margins.

This tremendous growth in the technology sector in the Asia-Pacific region was expected and the leaders of the nations in this region were proactive in drawing up a regional economic integration (REI ) pact to look beyond recovery. At the APE C meeting in Singapore last November, the leaders of 21 APE C nations pledged to strive for a strong, sustainable and balanced growth initiative.

Recovery of Green Tech

It is no doubt that Asia is leading the economic recovery for the world with China and India in the lead. In the post economic downturn scenario, Asia is looking at green recovery options to further spearhead the recovery process besides trying to make it sustainable.

In April 2010, political and business leaders gathered in China’s Hainan province at the Boao Forum for Asia annual conference to discuss how to make this global economic recovery sustainable so that a future downfall can be avoided. Trying to learn from past mistakes, which led to the financial crisis, the Asian nations have tried to chalk out a roadmap for a green recovery process.

Chinese Vice President Xi Jinping said: “We must further improve the development model, and seek a path of green and sus tainable development.”

This year’s session adopted the theme, “Green Recovery: Asia’s Realistic Choice for Sustainable Growth,” which focused on arriving at political solutions for enhancing living standards of people in a safe way. Low-carbon technology development, adoption of energy efficient technologies and more usage of renewable energy sources in a country’s energy mix were promoted during the conference.

Technology recovery in Asia will result in a spurt of new industries etc. but the initiatives should be green in nature, said attending leaders. Already, Asia is seen as a large emitter of greenhouse gases, although percapita emissions are much less than the U.S. or European countries.

It was decided that Asian countries will strive to keep emissions under check and eliminate reliance on conventional and unsustainable development patterns in order to keep the technology revival going in the right direction.

“Nations should strive to achieve green recovery, no matter how painful the economic transformation is,” said Fidel Ramos, former Filipino president and outgoing chairman of BFA’s board of directors.

Multiple technologies, instead of just one or two technological developments, are needed to address energy use in complex systems including housing, urban development, transportation and agriculture added Ramos in an official publication for the BFA’s annual meeting. The BFA is considered an Asian equivalent to the World Economic Forum which takes place in Davos, Switzerland.

Even nations like Mongolia have pledged to take the technology recovery in the green direction, although Mongolia depends a lot on fossil fuels. Environment friendly technologies will be given a boost here, said Mongolian Prime Minister Sukhbaataryn Batbold.

Sustainability of Technology Recovery

Hitachi Data Systems released a report early this year that stated that chiefs of many companies expected the economy to recover in 2010. The report cautions chiefs and IT professionals in a company to leverage the strategic business value made available by IT . A resilient IT framework should be deployed so as to benefit optimally from the technology recovery scenario. Companies need to align IT and business goals by employing technologies such as virtualization and dynamic provisioning to automate performance and also increase utilisation.

With fast recovery signals in the Asian region, global trade will shift to high technology and knowledgebased industries. The nations here have to implement new policies to promote technology exports and imports. Technology import policies should consider the fact that such technology imports are an investment for the future export of technology-based goods and services. Asian countries used to import technology by entering into joint ventures or by means of direct purchases of technology. Now that investment has borne fruit and has made the region the chief exporter of all kinds of electronics, automobiles, software and business processes.