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Simplifying Business Regulations:Critical for Development of IT

Dan BrodyManaging Director

US Information Technology OfficeBeijing

September 2001

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USITO Introduction

Established in 1994 Voice of the US high tech industry in China Representing 4 US high tech trade associations with an

aggregate 7,000+ companies

Main message:

• Gov’t should lead in trad’l areas; industry should lead new areas

• E-government can improve gov’t coordination, processes

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Time is Golden

IT does not equal .com Rapid CHANGE in IT markets, business models

• All governments struggling to determine best methods Many interests all seeking to promote ecommerce

• Gov’ts seek to maintain leadership in traditional areas like IP, taxation, criminal acts, legal redress, etc

• Business seek ability to experiment with new models, reach new customer, and develop new dev’t/distribution/partnership arrangements

IT-specific issues

• E-commerce – and most IT – is by definition global

• Most IT companies draw significant portion of revenues from int’l

• IT products have faster product cycles

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Time is Golden

The challenge is to develop regulations appropriate in arenas where they are necessary, as recognized in OECD Ottawa Ministerial

Regulating

• First, ask if new regulations are necessary or if existing can be adjusted

• Second, if regs are necessary, work with industry

• Third, outside traditional areas of govt reg, solutions should be industry-led, market-driven and consensus-based

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Governments are Complex

All governments have many different agencies, with complex inter-agency coordination processes

Coordination requires time, and can cause major delays to business

China

• Stupendous growth over last 20 years

• Large bureaucracy makes difficult for SMEs

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State Council

CIRC GAC SATSCDR

CSBQT

SSAFE

NCAC SPPA

CSRC

MoST CASS CASSEIQ

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MOC

SIPO CAE

SC LAO MOFTEC SETC

SDPC MII SARFT

SAIC

SCIO

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Need to Administer Sector

Industry recognizes the need for government oversight Administration of sector made more difficult if government

bureaucracies are getting smaller, fiscal revenues are declining

Governments can improve efficiency and transparency by moving toward e-government

If a government were to ever go public and be subjected to shareholder scrutiny, maybe the CEO (President?) would roll out a plan for serving customers (citizens?) better by offering a ONE-STOP SHOP website where customers (businesspeople?) could fill out a single form at a single place and then the company (government?) would send copies to all the relevant departments internally