The government's involvement in the information and communications technology (ICT) industry is crucial to the success of the country's efforts to become an ICT superpower, a leading researcher said yesterday.

The level of the government's role in the economy and local companies' ability to innovate will be the major factors affecting China's ICT landscape in the next five years, said Jamie Popkin, group vice-president of global research at advisory firm Gartner.

ICT is already a "pillar industry" in China's robust economy and the government hopes to spur its use to transform traditional industries and add fuel to economic growth.

The ICT industry is typically broken into five broad sectors hardware, software, services, telecommunications and semiconductors and many countries are striving to excel in one, two or three areas, according to Gartner.

"Only the United States has successfully developed in each of these five sectors but China is striving to equal that accomplishment," said Popkin.

"This effort is being driven by ready access to capital, via massive inflows of direct foreign investment and access to the capital market in Hong Kong, and by strong government involvement through State-owned enterprises, and government agency programs and policies."

Popkin made the remarks at the opening ceremony of Gartner's wholly-owned foreign enterprise in Beijing yesterday.

Popkin said he believes the Chinese Government will have to adjust its policies over time, focusing on facilitation and assistance in ICT export programs and clearing bureaucratic hurdles to investment.

Also, the government itself should invest in ICT, business education and training while continuing to strengthen and enforce intellectual property laws.

Encouraging mergers and acquisitions will help develop economies of scale to support global brands, Popkin added.

And the government needs to strike a balance between domestic interests and market realities when promoting Chinese ICT standards.

The government has been increasingly aggressive in promoting home-grown technology standards for 3G mobile communications, AVS (audio video coding standard) and WLAN in recent years, underlining its growing desire to shed the status of a technology backwater and reduce reliance on foreign technologies.

"Many (ICT) vendors (in China) we speak to are focusing on international markets," said Popkin.

"The government should create policies and provide incentives to help vendors to define new standards."

And Chinese vendors need to move their products and services up the "right" value chain and develop "go-to-market" strategies for the US, Europe and Japan, the researcher added.

(China Daily September 2, 2005)