NewsForge: Linux and the market's big geographic change
Sunday July 14 2002 @ 10:32AM EDT

Is the IT slump in the United States and Western Europe a temporary setback or a permanent change in the marketplace? Increasingly, Asian IT developers think that something fundamental is happening in global markets, and they are turning their efforts away from Western markets. They are also shifting away from their past emphasis on hardware, on Western exports, and on U.S. developers of proprietary software. Many leaders in Japan and other Pacific Rim states believe Open Source software may be a way to improve their domestic markets and help them penetrate nearby Asian markets still growing at double-digit rates.

Japan's shift of emphasis is instructive. During the '80s and '90s, Japan's superior manufacturing skills helped it contend with the United States for dominance in the personal computer marketplace. The country's once formidable Ministry of International Trade and Industry (MITI) orchestrated a flood of innovative computer products by Japanese manufacturers. At the time, many analysts thought the country would dominate the global PC industry the much the same way it same way it took over consumer electronics in the '60s and '70s. Unfortunately, MITI never appreciated the importance of software. The country never developed a software industry on a par with North America's. Over time Japan's position deteriorated as the software and services sector became an increasingly important part of IT, and as other Asian states took over a greater share of the chips and commodity components marketplace. That slump became a crash as the U.S. and European markets faded over the last couple of years.

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