Not all that long ago you couldn’t swing a cat in a room without hitting somebody who was talking about e-commerce. It was the hottest topic in the industry: “Get into e-commerce or die” was the clarion call to the faithful. Companies spent millions on panicky solutions based on the fear that there was about to be a massive change and they might “lose out”. The whole “dotcom bubble” was in fact founded on the fear that when the steam roller of e-commerce came rolling by you would either be part of the machine or part of the road.

In Hong Kong, one of the more reasonable advocates of e-commerce over the years has been Dr David Cheung of the Hong Kong University. E-commerce is now more widespread than ever before, yet he agrees that some of the steam in that steam roller has dissipated, and there’s less urgency and panic in corporate decision making on e-commerce matters. However, along with acceptance as part and parcel of daily business life, IT in general and e-commerce have lost some of their mystique and glamour, and he notices that it is not as appealing as it once was as a career path for Hong Kong’s “best and brightest”. This may eventually have an effect on our competitive edge in global e-commerce - unless businesses adopt other methods to get the IT service and staff they want.

“I think it is less popular than a few years ago,” he says. “If you look at some of the programmes that started then, the enrolment has gone down quite a bit. It is natural, of course. Good things have to go through hurdles and there will always be ups and downs,” he said.

Outsourcing: to buy or supply?

But it is not just e-commerce that has seen a bit of a down-turn: in most parts of the world, computer science in general is not quite so sexy as it once was. There are, as one would expect, two glaring exceptions: China and India. “University admissions are down, not just in Hong Kong but throughout the whole world - except China and India, of course. Most of the IT jobs are now in those two countries. Young people everywhere have read that those places are where the jobs are, so that is where they are going. The media is convincing them to do that,” he said.

Dr Cheung also believes some of this decline in popularity is due to the fact that IT has become more diverse and complex. Not too long ago, a single programmer could “do it all” - design a system, write the code, create the documentation, etc. That is no longer possible. He used an image from the construction industry to describe this.

“In IT, the division of labour is getting clearer and clearer. It is a lot like construction where you have a multi-layered workforce. There is the architect, one or more consultants, engineers, draughtsmen and others right down to the men who work in the filed and actually construct the building. In IT ten years ago, a programmer could do it all. That era is gone. Now you can have a project that begins in North America but some of the design issues are done here in Hong Kong. The actual code could be written in China and the support could come from India,” he said.

This naturally touches on the subject of outsourcing, something that is of great interest to many businessmen who are faced with the challenge of maintaining a global edge in their IT. Dr Cheung not only believes that outsourcing is the future, but that it is already producing clear results.

“As far as outsourcing is concerned, I think it is definitely working. Absolutely. There will be problems along the way, of course. There will be issues such as how much design needs to be done before you send the specifications to the outsourcing company, and there will likely be communications difficulties. However these will be overcome eventually,” he said.

Hong Kong has not been so quick to take advantage of this as India or even China. This is not because of a lack of interest, but because some of the factors that are needed to get this kind of industry started are not in place yet. However, he adds that here in Hong Kong we are getting close to it.

“The first part - the technology to do outsourcing - has not matured here yet. We cannot just do the same sort of copycat processes we have done in other industries in the past to get ourselves started. For example, remember how Hong Kong took the world of toy making by storm? We were incredibly successful at that. But look at how we started … Outsourcing will be a little more difficult, but I think we can do it,” he said.

India has been doing this for quite some time, and now has their infrastructure in place. It’s a good example to look at.

“India has been developing their outsourcing business for 10 years, so they have the core processes in place. Many people here in Hong Kong and in China want a share of this business, but we’re not competitive yet,” he said.

The software connection

One key factor is the software business. Neither Hong Kong nor China is in a great position here. China may be a bit ahead of Hong Kong, but compared to India, we are far behind. If a local software industry was established, Hong Kong would have a far greater impact in other areas of IT.

“We certainly don’t have much of a tradition in the software industry. Not here in Hong Kong nor in China. We are, however, excellent users of software. There is a difference between using and creating technology. We need to do a lot more in this area. I do believe there is a great opportunity here but we must work hard if we are to realise it. China is keen and they have tremendous resources. There is a lot of talent around but it must mature. It is coming,” he said.

Dr Cheung dismissed the language issue as a major factor. Some people have said that India’s advantage has been its proficiency in English. It is a factor, but not as significant as many believe.

“Language has something to do with it. It gives India an opportunity to access the market. But I must say that the language skills of the people of Hong Kong are not that bad. True, we may not speak as well as the Indians but we speak well enough to do business and that is all that really matters here,” he said.

DTTN: proving our point

But if pure innovation is somewhat lacking here, implementation is not. Dr Cheung said that Hong Kong was particularly good at the practical side of things. As an example, he pointed to the development of the DTTN (Digital Trade and Transportation Network). Although not yet universal, the DTTN is moving along nicely, he said.

”The widespread adoption of the DTTN is it just a question of time. People will get on board because it makes sense,” he said. There are some issues, of course, but in time, particularly when some of the standards are worked out, it will be successful. One area that is critical is that of establishing universal standards, and what in the industry is called a “canonical format” - or a format for data or documents that is independent of any specific application or program.

“I think technically, it is there. I won’t say it is 100 percent resolved because there still are issues, but it’s close. DTTN is creating a de facto standard and that’s good, even though some people are often bothered by the word ‘standard’. They find it difficult to agree and are looking to create a ‘canonical format’,” he said.

There are many different businesses involved in all of this, from shipping to banking to air cargo manifests. All these business areas have quite different formats for the necessary documentation. As the DTTN attempts to bridge the gaps, the technology will make an enormous difference. Dr Cheung said there were about 80 document formats involved and the system must be able to interpret them and enable a universal communication. This, he says, is the sort of thing computers were really designed to do.

Although the DTTN is seen as on the verge of great success, other attempts in Hong Kong have not always gone so well. ESDLife, for example, has suffered a great deal from numerous problems. “The problem is not technical. If you have tried paying your tax on ESDLife you will see that it is a nightmare,” he says. “It takes longer to do it online than by paper and that is just crazy. If technology is to be widespread, it must make the process easier, not more difficult,” he said.

Even though this has not been a rousing success, things such as the Octopus card have been, and Hong Kong has shown the world that it can lead the way in innovative implementations of technology. What is now needed is for Hong Kong to merge its practical ways with China’s energy and raw talent. New projects and new ideas can be tested here easily. Once the bugs are worked out, they can be moved to China.

“You can start here in Hong Kong, if you want to do something big with technology, but you cannot survive in Hong Kong. You must move your idea into China. Hong Kong and China are in this respect moving together, even merging, if I may say so.”