Hong Kong Government’s e-government initiatives discussed later reveals that the Hong Kong Government envisions a wired government will stimulate households and then business IT usage. Type of international Internet connections, Internet Service Providers (ISP) availability ISP costs for consumers and businesses, historical stimulus, current stimulus and special factors that help IT diffusion & growth can reveal insights on IT diffusion in Hong Kong. The open social environment in Hong Kong consistently stimulates the acceptance and adaptation of new ideas and technology.
By the end of 2001, the number of Internet Service Providers (ISPs) and web sites stood 259 and 150,000 respectively. Web users as a percentage of the population was 35% in March 2000, in comparison with 33% in Singapore and 59% in the US. There were 385 PCs for every 1000 citizens in Hong Kong in comparison with 508 for every 1000 citizens in Singapore in 2001. In the meantime, there were 170 PCs for every 1000 employees in Hong Kong business establishments in 1999 with a projection of 590 PCs for every 1000 in 2003. In comparison, there were 280 PCs for every 1000 people in Singapore business establishments in 1999 with a projection of 510 PCs for every 1000 in 2003. (21)
Narrative and Analysis (22)
Type of International Internet Connections
The number of new submarine cable constructions and the growth of PCs per capita basis indicates Hong Kong aggressively asserts its IT infrastructure and diffusion leadership in the region. Currently, there are two large Internet exchanges around the world. The New York International Internet Exchange serves the international and the U.S. domestic ISP market while the Amsterdam Internet Exchange serving as a neutral and independent Internet exchange. There is no such Internet exchange for the Asia Pacific region. Hong Kong has the ambition of establishing the city as the Internet exchange hub for the region by leveraging its location and telecommunications infrastructure leadership. The heavy build-up of IT infrastructure aims to attract the investments from neighboring cities and countries in the region, such as China. The early build-up serves to convince them it is more cost-effective to tap on Hong Kong's infrastructure, rather than investing heavily in their own.
Internet Service Providers (ISP) Availability and Costs for Consumers and Businesses
With 259 ISPs, the Internet Access Services are highly competitive in Hong Kong. The licensing system serves to identify the service providers where necessary and to hold them publicly accountable for the quality and delivery of their services. The competitive nature of the market also keeps the ISP fees low for consumers and businesses. Hong Kong users now enjoy the average rate of USD 18 for monthly ISP access in comparison with the USD 20 rate in the US.
Historical Stimulus for IT Growth v. Current Stimulus
Consumers and big businesses’ enthusiasm for new technology and demand for efficiency have driven the growth of the IT sector for decades. In Hong Kong, hardware products made up more than 70 percent of total IT spending in 2000. China's WTO entry and economic reform will become the stimulus for the IT growth in Hong Kong as China is expected to account for 35 per cent of Asia-Pacific's IT market by 2005.
Special Factors that Help IT Diffusion & Growth
In Hong Kong, no distinct cultural attributes hinder IT diffusion. In fact, the technology-savvy society’s enthusiasm for IT only spearheads its diffusion. The success of Octopus e-cash card and Hong Kong’s global leadership in e-cash only demonstrates the population’s IT sophistication in Hong Kong. The customer base of the e-cash card is more than 95% of Hong Kong residents between the ages of 15 and 65. The 8.6 million cards in circulation generate annual transactions of USD 2.2 billion. Concurrently, the liberalization of the Hong Kong telecom market in 2000, and the growth of and competition in the ISP sector stimulate the growth of the IT market.
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