World Electronics Forum

Citation

Ling, J. (2006), "World Electronics Forum", Microelectronics International, Vol. 23 No. 1. https://doi.org/10.1108/mi.2006.21823aab.009

World Electronics Forum

World Electronics Forum

Keywords: Electronics industry

What is WEF?

The World Electronics Forum (WEF) is a voluntary gathering of CEOs and Directors of electronics industries associations worldwide. Founded in 1995, WEF meets annually to discuss major topics of common interest to the various associations, exchange information on services and data and strengthen relations between associations for the benefit and service of their industries.

The host associations for this year's 11th annual forum in London, England were Intellect and the EICTA. Meeting between 14 and 16 September 2005, sister organisations attended from 28 countries.

September 14, 2005

Opening the first day at the Conference Room of Intellect's Russell Square headquarters, John Higgins CBE, Intellect Director-General set the scene, for what he described as two days of understanding the environment in which the companies operate. What are the constraints, the pressures that make them behave the way they do. How they prosper and compete. How are they responding? We were to find out.

Answering this proposition, Mark MacGann, Director General of EICTA spoke first. His organisation represents the most promising industry sectors in Europe – telecom, IT and consumer electronics, and has 55 of the worlds best companies as members. EICTA brings together all the major European companies together with the national organisations within Europe. Mark was frank. That no EC budget had been agreed on how the EC will be run over the next 5 years had affected his association. All the grand plans, such as Lisbon and Barcelona, have not really come into fruition. Europe is falling fast behind our trading partners in the rest of the world; our GDP is worse, and the three essential pillars of R&D investment, a strong education system, and intellectual property protection are being weakened. Strong competition from Asia is growing by the day, and we do need a strong European industry to be able to compete. The prospects seem bleak – with R&D investment the 15 core members of the EC have fallen so far behind with GDP investment in R&D that it is now an insoluble problem. Broadband, high definition TV (HDTV), all are exciting technologies, part of the answer of the problems of the EC, and Brussels should be paying more attention than it does.

Digital Technology Industry (DTI) increasingly is the TLA for the DTI, but Mark Beatson of the real DTI is an economist and said that there would be some slight slow down in economic growth for most of the major parts of electronics this year and next. There would, however, be strong growth in China and India. And what is driving all this? Rapid growth. What we will see is the BRIC countries (Brazil, Russia, India and China) have better GDP than the ROW. Currently, oil prices do have an impact on real economy, whether you are a net importer or exporter, and there is concern about the current US account deficit. Long term effects on world economy will include – energy and commodity prices – population ageing – the extent of opening up of world markets – and the speed of technology change. The implications of a challenging environment include R&D investment, education and skills, and government should also pick up particular policies, to stimulate the innovation process.

John Fisher is the Chief Executive of Citizens Online, a national UK based charity focusing on digital inclusion, ensuring that everyone has access to the digital technology. Who are your customers, he asked. Some facts first – only 52 per cent of UK homes are connected to the internet; one-third of UK adults have never used the internet, and of them 40 per cent have no intention of ever using it! However, only 20 per cent of those aged over 25 have never used the internet, so maybe it is a generational thing. Is it important that people have internet access? Yes. The UK Government will have all its' services on line by the end of 2005, as an example, and we now have 100 per cent broadband connectivity in the UK, with the price of PCs coming down in real terms. But levels of internet access take up in the UK have gone flat, and one wonders why. John suggested that computers are difficult for many people, to use, and usability is a key difficulty for those who have numeracy and literacy deficiencies. In the UK only one adult in five will pass an adult literacy rate. In the whole of Europe, only Latvia has worse adult literacy than the UK. For Governments a sense of social responsibility is key here.

Craig Burchell is the Chairman of the EICTA Trade Policy Group and is VP International Trade for Philips Electronics, so he knows what he is talking about. He wanted to talk about trade and its impact on peoples' lives, and the trends we should think about. Multilateral and open trade improves lives of peoples, it lifts them out of property, and more liberalisation is good as it raises living standards. But in the EU weak leadership is a worry. As an example, he cited the recent “bra wars” dispute with China. The EU had 10 years to prepare for the textile changes, but in the end was caught out, it smacks of protectionism, and even the US and Japan are showing signs of this. Craig maintains stoutly that WTO agreements should be adhered to, and we should shout loudly to get a good framework for the future. Although multilateral trade agreements have a better balance, regional trade agreements now account for 59 per cent of world trade. China is looking to the West to help them change their ways of working. What we all must do is increase our protection of intellectual property. Developing countries see electronics as a means of competing, and joining into world trade, but they see regulation as a form of protectionism.

After these speakers came a Q&A session. One delegate asked if our political leaders are aware of what is needed? MM responded with the comment that the electronics industry has seen the boom years go, but we have learnt from our mistakes, or have we? European governments tend now to be sceptical about our sector, wondering if we can deliver real productivity growth. His view is that there is a lack of true leadership in Europe, and thus industry is much at the risk of polarisation. Would governments put public money into ICT? Strong political leadership is needed to promote electronics sector to compensate.

Someone else asked about ways in which governments might assist in some way. Yes, they can, came the response, through education; education policy in Europe is an unmitigated disaster. Ireland did a great job on education and it worked just fine for them. The Lisbon Agenda is a nonsense, of course, we have had to shed jobs, we do not want to keep them, what we want is to create the environment for higher quality employment.

Dave McCurdy is the President of the Electronic Industries Alliance in the USA and introduced a session which was all about colliding sectors, and disrupted markets. How is convergence affecting our industry? We all like to see constant change (do not we?) and ultimately it is the consumer who benefits from the dynamic industry we represent. He introduced Lucas Covers, who is the Chief Marketing Officer for Philips Consumer Electronics. Lucas was emphatic about the need for simplicity; simplicity about service and products is about the way we do business. He cited the example of HDTV, which will see the biggest change in technology since colour TV arrived. There are three components to use to simplify your business:

1 De-verticalisation. Unbundling outsourcing, keeping your core business, core competence, and design intellectual property; d Dismantle the other bits. This is a platform for profitable growth.

2 Partnership. Philips sell equipment made by LG in Korea as a partnership. The set-top boxes are Philips own innovation and technology, but are manufactured elsewhere.

3 IVM. Integrated value marketing means that you are also applying simplification. You can provide services for those with special needs. Health care is a growing market, and the modern TV screen in the home can help deliver tomorrow's health care. As an example, he spoke about a system called Motiva, where set-top boxes are installed at a patients home and they can measure their own vital signs, which are monitored by their local surgery or hospital. They have 600 such patients in Rotterdam on a pilot scheme and this is seen to be breaking with tradition, and creating completely new business.

Last phase for Philips will be creating a digital eco-system. By the end of 2012 we shall see no more analogue signals, and HDTV pilot programmes are already being transmitted by stations such as Sky, Canal Plus, etc. Philips have met the challenge of convergence.

Gary Shapiro is the President and CEO of the Consumer Electronics Association in the USA and he came across the pond to talk to the meeting about the benefits of working together with his counterparts in other countries. CEA is committed to free trade, and as a collection of electronic industries we can and should work together. Electronics is a disruptive business, all these inventions means that there are fewer travel agents, broadcasters, making life easier and simpler for the consumer. We have created a $120 billion industry in the USA. Electronics has changed the recording industry. “shifting content” he calls it.

Then came Wang Ning, Secretary- General of the CECC in China. No surprise to hear him say that China has the fastest growing economy in the world, with growth exceeding 8 per cent per annum. Within that figure, the industry that is developing fastest is consumer electronics, where the growth rate is above 12.5 per cent per annum. In the consumer electronics industry the most important products are personal computers, digital products, mobile phones, video recorders and HiFi. He does not include domestic (white) goods, however. Last year China produced 39 million colour TV sets, and 45 million personal computers. This year they have produced 25 million colour TV sets in the first half this year alone, and some 8 million VCRs. They have a large domestic market for which such items are a novelty.

Kazuo Kaneko is the President of JEITA in Japan. They have 500 companies such as Toshiba, Sony, etc. as members. Japan wants a larger private sector, and smaller government which is probably what they will get under their enlightened Prime Minister. It is taken 10 years of stagnation to make this happen. He described how digital technologies would impact upon the home of the future, and that future is now, almost. Two forecasts were of interest – the first showing the Japanese market for digital home appliances networking, which is 2004 was $24.59 billion. By 2010 that will have risen to $102.98. The second was that by the end of this year, every home in Japan would be connected to optic fibre cable. His view is that the convergence of CE, IT and communication products will raise the living standards for all consumers, even those in developing countries, so the benefits are not just confined to countries like Japan.

Joseph Cheng is the President of TEEMA in Taiwan; they have over 4,000 members, and in 2004 their (electronic and electrical) industry total value was $169.7 billion, of which the value of exports was $86.6 billion, or 49 per cent of total export value. Much reference to BMW, which could have been confusing until one realised that this is the new nomenclature for Broadband, Mobile and Wireless. But Taiwan is looking at cars, especially if electronic products account for 40 per cent of a vehicle price tag. Whilst consumer electronics and mobile communications are proven technology, now that the analogue content is to be changed into digital, the traditional home will be the digital one. Is there a paper on how this might impact the garden, perhaps?

In a subsequent Q&A session, it was felt that Europeans were not so optimistic of the role of the European Commission in supporting growth through technology.

After lunch, expertly arranged by Intellect, the afternoon set out to look at the telecommunications perspective.

Anthony Walker is the CEO of the Broadband Stakeholder Group. He praised the far-sighted vision of HMG in making it possible for all the people in the UK to be involved in the future of broadband. Conventional broadband has been adopted so quickly in the UK that we do not know the sources of competition. Even from a telecom perspective. Digital is transforming our landscape, with voice over IT, and we are now coming to the end of an era of voice and broadcasting. We will see some dramatic changes, with lots of unknowns, we do not really know the pace of change. It is the consumers who will define convergence; the industry will need to deliver flexibility. What is the UK market looking like?

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  Fixed line. BT is investing heavily with a new wave of services (21CN) but there is real pressure on BT from cable.

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  Mobile. There are now five operators who have invested heavily in 3G services, and we are seeing the advent of mobile TV.

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  Television and Broadcasting is a most interesting area, with the BBC being an influential player but it is publicly owned. Whilst the BBC can be a tremendous driver in terms of technology, they have to get the balance right, and deliver value for (public) money.

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  Satellite. Sky have a very clear strategy, with more activity through the SkyPlus PPR facility.

The UK market is vibrant and innovative, but there are huge problems with convergence, and Intellect has been busy bringing in specialists from abroad to assist. If we are to capitalise on convergence we need a better dialog between the players, and a robust regime which needs to protect intellectual property rights. Our Government needs to know how to talk to the industry, and he felt that the industry needed its own minister, who could assist with more converged regulation.

Shigeru Ikeda, President of CIAJ in Japan said that further convergence of telecom and broadcasting is taking place under the guidance of the Government of Japan, so all will be digital by the year 2011. Backbone (optical-fibre cable laying) is 100 per cent completed, and terrestrial digital broadcasting via FTTH using IP multi- cast technology will be available to 21 million subscribers to broadband in Japan by the end of 2008, 30 million by 2010.

Matthew Flanigan, President of TIA in the States, said that his members have been providing what he calls “supercom” for the last 18 years, and in 2006 they will be introducing “globalcom”. In the US there are some specific challenges – subscribers are changing over to wireless, and to broadband, and voice and landline are disappearing fast. Every regulator in the world will face the same issues. It is an IP based world. TIA maintain that regulations should be light-handed, as onerous regulation will stifle investment. He wondered if we would know what a network looks like in the future, they are changing so rapidly. Work continues and advances rapidly on next generation networks (NGNs), and an entirely new regulatory body is needed to handle this, with due despatch.

Intellect Deputy President Sean Finnan chaired the next session, which was all about staying competitive. This was a session sponsored by TATA Consultancy Services of India who know about being competitive in a global market place.

Convergence, said John Woodget, Chairman on Intel Corporation in the UK, is when different things come together, and you then have integration or disintegration. We all have to think about the global nature of what we are dealing with in convergence, and Intel now has had to think globally. Obviously Asia is the biggest revenue generator, in the UK Intel are very heavily involved with Intellect and the Wimax project in the telecoms sector. Leading companies do need to educate governments and markets, you have to be the driver, and influence what is happening, that is always a profitable approach.

Supply chain security was the subject of a talk by Steffen Schaefer from IBM, who painted a picture of the daily business hazards of supply chain maintenance, and in an uncertain world, one in which there is a security threat. Stefan explained about the role of RFID tags that can allow companies to meet known security regulations, monitor container transportation, measure storage temperatures, routing, etc. RFID tags are sensors, they are intelligent devices that can measure data, including access, the environment, security, and their application is taking place rapidly.

Tom Abram is the CEO of Mantix, and wondered how UK SME's could succeed against global competition, how they would access the global market. What was the effect upon them of competitive strategy, and the (often unhelpful) political, economic and regulatory issues. Their weaknesses included a limit of time and investment for business development, having visibility in the market, operating at a higher risk, and having a full understanding of regulatory opportunities, and threats. However, SME's invariably were committed to quality and excellence, were innovative, were customer focused, and had a strong core values in small teams. So exploit your strengths, do not compete in commodity markets, be agile, be adaptive, and continue to be innovative.

Ravi Gopinath is the Global Head of Industrial and Engineering Services at Tata Consultancy Services. TCS is now a 40,000-person organisation operating IT services around the world. There has been huge growth in India, and the Indian IT service industry will be valued at $50 billion by 2008. What drives it all? Price, basically. Cost was the primary driver, and in global markets, operating in China and India, meant that you could be close to the customer. Companies in India drive innovation, which means that you have to leverage the service of these companies who are close to the market, and who operate to quality world-class standards. Some of the best brains are coming from India, there were one million graduates from universities last year, and all are now fully employed.

Florin Vrejoiu is Executive VP at ARIES and told us something about Romania. His country is in the middle of three big markets. There is a good education system in Romania, so human resources are an asset, all of them speaking English. The IT sector is growing fast, about 25 per cent per annum, and in telecoms there is a good situation. Companies such as Alcatel have elected to base their R&D facilities, and ARIES is the largest IT association in central Europe, and his country has an IT&C export business valued at $250 million. A lot to offer in Romania, maybe the 12th WEF should be there next year?

An Australian perspective came from Christopher Janssen, President of AEEMA. The electronics industry in Australia maybe only 1 per cent of GDP but it is a $6 billion business with 33,000 people working in it, and it enjoys the full support of the Australian government. Australia outranks major OECD countries including the USA, Japan, Canada and the UK for public expenditure on research and development as a percentage of gross expenditure on R&D.

In Australia they are focusing on photonics, microelectronics, wireless, and nanotechnology industry development, and have a strong services economy to compliment it all. True, Taiwan and Japan have lost out to China on labour costs, but Australia has language, education, skills, and abundant well-skilled people available. How we do we then compete? The big strength is in management skills (an Australian running British Airways might be a good example). Material costs may be similar, but in the value- added aspects the Australians win rather well. They have sophisticated RP portals, and are capable of producing complex products on an international level, especially in partnership with Taiwan, China, Hong Kong, Korea. Always worth considering Australia.

In the closing KeyNote Speech of the day, Ramon Olle Ribalta, the CEO of Epson Europe asked – what is a good company? It is the one that takes on Corporate Social Responsibility, or CSR. How does that affect the perception of a good company? Companies which have CSR are aware of the environment, do not require excessive legislation by governments, and have acceptance of responsibility by companies. In 2001 less than 20 per cent of companies had a CSR strategy, but things have changed rapidly. CSR is not an exception, and his organisation, Epson, it is a top priority. On the one hand it deals with everything within their own company as their own culture, and with their specific activities. It allows for:

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  the involvement of employees and recognition of their work;

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  transparency that is a warranty of quality;

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  environmental responsibility and compliance; and

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  social projects.

  A display of social commitment shows a company's health.

CSR should not be seen as a passing tendency, it is an investment; a company, which is deeply committed to CSR, will be the first to see market benefits. A sound CSR policy Attracts investors, and such ethical and social responsibilities are worth a 20 per cent premium in share price. CSR will maximise innovation and responsibility, and will minimise legislation, which stifles incentive.

September 15, 2005

At a breakfast briefing, Gavin Isle the National Head of Technology and Telecoms at Barclays Bank PLC welcomed the delegates to the first session of the day, entitled Capital Markets. Barclays Bank have invested heavily in the electronics industry, enjoy an unrivalled reputation, and they are developing close links with Intellect.

Peter Rowell is the Executive Chairman at Regent Associates, who specialise in mergers and acquisitions. He operates in a $4 trillion industry, divided into four main sectors, IT – Telecoms – Electronics (the centrepiece of disruption) and Media and Information. His view is that print media will be flat over coming years; fixed telephone lines are declining at 1.5 per cent per annum, but Information Content in e-services will be the centrepiece of the growth going forward, running at16 per cent per annum. E-services, e-trade, are taking business from elsewhere, and he foresees nanotechnology disrupting the medical business.

Buyout activity is increasing, whereas venture capital investment is declining. Acquisitions have been active, 2004 was a peak year. Companies are selling for the right reasons, to access capital, management, brand image, and buyers are buying to get into new markets, or see a fit with their long-term strategy. The situation is very healthy.

Frank Sekula, Director at Barclays Capital, talked about the Debt Capital Markets. They are extremely liquid right now, where too much money is chasing too few credits. Defaults are way down, so there is plenty of money to lend. Technology is but a small slice of the global debt market. He mentioned Flextronics, a rather well- known CEM, who operate in 25 different countries, they have been on a high growth path and have levelled out, and have $3 billion debt capital of which only $1.6 drawn on a non- covenanted basis. As an example of a cheap funding exercise they are a prime example.

Guy Warren, MD at Logica CMG, mentioned that his company holds the second largest technical stock in the FTSE. They are a services company, operating in the mobile telecoms sector. Significant in wireless technology, they have a balanced portfolio, and have found that a good global spread is increasingly important, servicing clients around the world, and sourcing suppliers, with the fastest growing business being in India. Five trillion transactions a day are transferred through their software, CHAPS, the banking transfer system being but one example. LogicaCMG are in the backbone of mobile communication, text, and web sites. Worth noting that concerning information technology, there are one billion people living in India, whose universities produced a million IT graduates last year in India. Logica is a working behind the implementation of RFID.

Crispin O'Brien is the Chairman of the Technology Group at KPMG, and talked about “The Good Company” which pursued the CSR line. What is Corporate Social Responsibility? He explained. CSR is now reported by the Fortune 250 companies, and 64 per cent of the worlds largest companies now report on CSR. You may not get on a tender list if you do not. A total of 74 per cent of companies surveyed said it was important for hard economic reasons. A total of 81 per cent of young people believe that good responsible business practice will improve profitability, and graduates will be more attracted to a company that has a CSR policy.

Kei Biu Chan is the Chairman of the HKEIA, the Hong Kong Electronics Industries Association. His view is that a “good company” is one that sees Green Manufacturing as both a challenge and as an opportunity. Who sorts out your waste? He asked, there are no more holes in the ground. Concerns about toxic substances causing water system pollution, was where WEEE and RoHS comes into it all, with a scope that is quite broad. You now have to think “green” – not just in the manufacturing process, but as a management philosophy, a corporate culture, a total environmental responsibility and a commitment to society.

He referred to a new directive, energy-using products (EuP), which will run alongside WEEE and RoHS laws. You now have to “comply” before you can get a CE mark to sell your products in Europe. The basic concept of WEEE is that producers (importers) are responsible for the collection and recycling of all electrical and electronic waste.

RoHS states the limits of hazardous materials used, and he went on to explain what is meant by homogeneous materials.

China is now the factory of the world. Since 2003, over 50 per cent of electronic products are made in Asia, with over 40 per cent of the GDP of Guangdong province alone from electrical and electronic manufacturing, so they have the responsibility for compliance to a greater degree perhaps than anyone else. There are 3,000 factories alone in Hong Kong, and Chan informed the forum that they have now formed the HKGMA, the Hong Kong Green Manufacturing Association, to facilitate the transition of all electronic manufacturing in Hong Kong to this desirable status.

Roland Sommer is a WEEE and RoHS specialist from New Zealand, and explained the model for The Good Company that he had designed. Awareness, Investigation, Education, Implementation and Maintenance were the key stages, and it was heartening to see how much NZ Government commitment lay behind it all, and the comprehensive nature of the support his company could offer.

Gabriel Coron is the Director- General of FIEEC in France, and painted an alarming picture for the future of the electronics and digital industries in France, if nothing was done.

Loss of major government infrastructure contracts, lack of R&D funding, an aborted industrial policy, aborted defence support, saw a decrease in employment I this sector from 500,000 in 200, to 150,000 this year. However, there are now eight major restructuring programmes in place in France, running from high-speed internet, HDTV through to microelectronics that will be the first step towards what is not just a French ambition, but a European one as well.

After an excellent luncheon at the House of Lords, hosted by the Earl of Erroll, the delegates walked along the road to the offices of the DTI where the afternoon session was to take place.

Influencing the policy debateChairing an open forum on such a topic was the job of the energetic Han ten Broeke, Director of Technology, Media and Communications at Weber Shandwick.

What should trade associations do to be effective in the market was the main question?

Eileen Leopold opened the batting for the South African Challenges. Key priorities include social development, but there is recognition of the role of IT in the rebuilding of the economy, which means getting the effective participation of the people into the rebuilding of this economy. Skills development is crucial, as it includes everything from literacy to software development, a wide spectrum indeed. Where is the advantage of SA? No overarching government policy on IT, but government departments all have their own IT policies. Number of players? About 40 members, and the trade unions play a major role. How do we move forward, on consultation, to remove some of the legislation that has been invoked is another question to ponder.

Nigel Hickson of the DTI said that all of us have a role to play here. There must be evidenced-based policy making, and for that you need to look for lots of different inputs. Always think of the end-user, public opinion is a useful weapon. He thought that in general terms HMG bats fairly well on the policy debate, and has been instrumental through the DTI in involving people in the Television without Frontiers process, with the broadcasting and newspaper community all involved in this process.

Angus Robinson of AEEMA said that in Australia their 40 members had lobbied all their ministers, got them involved, and then thanked them for what they were doing to support the industry. It is a long and patient process, but it's hearts and minds as well as facts and figures.

Ian Taylor is the MP for Esher and Walton, and has served time as a Government Minister. He had some advice, and whilst he said that the DTI is there to help, you need to ask yourself – how well do you understand what the Governments objectives are? Great ideas with no budget do not work. Be ingenious. Ask how you might help Government deliver what it wants to, help the Government procure better, apply pressure to Government to pursue policies of mutual interest. Also, understand the constituencies of the MPs what are the benefits for the constituents?

Jan Zneider is the voice of ITEK in Denmark, his association is only 6 years old and the electronics industry there is converging like crazy. He has 200 member companies, and the industry is the largest economic sector in Denmark. He has three main tasks – lobbying; profiling and strategy. They have had certain success with government, for the first time R&D education and innovation were the common themes of the political parties. ICT, nanotechnology and IT were the areas of investment. As a voice in Europe, Jan said that it is “going far too good!”.

Bryan Cassidy is an MEP and has been in Brussels for so long he now knows all about the 23rd language, which is Eurospeak! The people you need to know if you are planning to lobby the EC are the “Rapporteurs” of the committees, and here your own civil servants can assist you in identifying them. He explained how the EC operated and how you should approach it, through a body called UKREP who have been hugely helpful to British interests. The subject of lobbying and decision-making in Europe is the theme of two two-day conferences, one to be held 28-29 November 2005, the other 18-19 May 2006, both in the Crowne Plaza Hotel in Brussels, and details are available on þ44 (0)20 7632 2399.

To wrap up the session, there was a Q&A time, and the many questions revealed the concerns of those present about the implications for political influence, and how to use it effectively. Certain facts emerged.

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  Use think tanks as special advisers to assist your lobbying approach.

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  The EC only picks up when there are European wide implications. Detailed policy is negotiated by the national governments.

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  It is important to demonstrate technology to policy makers.

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  Get a government minister to have a look at a/the technology company, but make sure it is the right minister. Do not excite someone who cannot in fact help you much.

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  Is it ever possible to have a cohesive policy in Europe?

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  Know where the priorities are, and understand what the government departments want.

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  Only lobby when you know what you are lobbying about. And finally ...

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  Know whom to lobby.

During the three days of meetings, the delegates agreed on the following principles.

WEF strongly supports the WTO non-agricultural market access (NAMA) negotiations of the Doha Development Round. While recognising sensitivities within some product areas, WEF supports the NAMA-framework for negotiations that will result in abroad and comprehensive agreement and ultimate global tariff elimination for many electronics and information communication technology (ICT) products as possible.

The delegates to the WEF noted that while the Doha framework holds the promise to reduce tariffs to ICT products, more must be done to reduce non-tariff barriers. They believe that many trading nations – including nations with negligible formal barriers to trade – maintain unjustified regulations that negatively impact trade in electronics. While the policies in question are generally well intentioned, and linked to important national goals, WEF delegates believed that not all are warranted. The use of electronics and IT technologies plays a key role in the economic development of nations. As a result, WEF supports the removal of tariff and non-tariff (including technical) barriers to trade in order to encourage the use of new technologies and to remove price distortions and other distractions to full economic development. To promote these goals – the elimination of tariffs and the removal of unjustified non-tariff barriers – the delegates to the WEF resolved to create a standing group of members supportive of trade liberalisation.

Members of the WEF Standing Reference Group on Trade Liberalisation will communicate with each other, and their respective governments, regarding barriers to trade. Where agreement can be reached on the impropriety of some trade restrictions, they will express to their governments their support for elimination of those restrictions.

Customs and border securityWEF participants agreed that it is important for industry to work with governments around the world to ensure that increased security measures for cargo are carefully balanced with the importance of the just-in-time economy and the realities of supply chain management. They also agreed to encourage improvements in the visa process for business visitors and foreign students, through measures that are harmonised in some ways throughout the world. Critically, they agreed that information sharing among allied nations is an essential element in creating a secure and efficient trading environment, and that integrated communications systems within each country is vital.

Competitiveness and worldwide sourcingThe delegates to the WEF recognise that an extremely broad range of factors affects national competitiveness. These include workforce skills, infrastructure investment, natural resources, tax policy, trade laws, wage levels, regulatory regime, and many other factors. It is incumbent on policymakers to promote conditions that enhance national competitiveness, and favour the creation and retention of high value-added jobs. They believe that this is the most effective way to enhance economic growth and wealth creation on national and international scales.

One important contributor to national competitiveness is the maintenance of worldwide sourcing policies that allow private enterprises to obtain the best products, services, and labour the world market has to offer. Firms that can are free to invest their assets wisely tend to be more successful than those forced to cope with unnecessary limits. They ultimately create more jobs and greater wealth – to the benefit of all. Additionally, nations that protect the ability of firms to utilise worldwide sourcing are more likely to attract direct investment from firms and investors abroad. In this way, worldwide sourcing policies help create a virtuous circle that enhances economic growth and wealth creation.

The next WEF meeting will take place sometime in September 2006, and is possibly to be held in Hong Kong.

John LingAssociate Editor –Microelectronics International