ICT Investment Opportunities in Myanmar(U Ye Yint Win)
Transcript of ICT Investment Opportunities in Myanmar(U Ye Yint Win)
ICT Investment Opportunities in Myanmar
Presented ByYe Yint Win
President , Myanmar Computer Professionals Association
September 14, 2012
Table of Contents
• Introduction• Changes in Myanmar• Analysis of Current ICT Environment• IT Investment Opportunities in Myanmar• Cooperation for Mutual Benefits• Conclusion
Introduction to Myanmar
Land Area 680,000 m2
(1.8 times Japan)Population >60 Millions
Capital Naypyidaw
GDP/Capital $821/Capital(estimated IMF:2011)
Economic Growth Rate
5.5%(estimated IMF:2011)
Unemployment 5.5%(estimated CIA:2011)
Inflation 8.9%(estimated CIA:2011)
Changes in Myanmar
• Changes in Political Environment– New Constitution and Elections– Balancing of the three branches of power is really
happening– Dialogues between Government & Opposition and
opposition participated in by-election– Freedom of Media
• Changes in Economic Environment– Improving Legal Framework– Improving the Infrastructure– Creating conducive environment for Foreign Investment– Privatization and Liberalization
ICT Industry Development
Human CapitalTechnology & Telecommunication InfrastructureOrganizationLegal InfrastructureFinancial Capital
Capital
AccessLiteracyUse
ICT Index
Good GovernanceClean GovernmentTransparencyFair CompetitionInclusiveness
Fundamentals
AgricultureTradeManufacturingTransportationServiceHealthEducation
Sector Development
Economic Development Food Clothing Shelter Transportation
Social Development Education Health Entertainment
(Leisure)Political Development
Participation
Impact (Values)
Millennium Development Goals
Access to KnowledgeAccess to MarketAccess to TechnologyBetter Communication
Reduce CostImprove ProductivityGain Competitive Advantage
ICT for Development: The Framework
1. Eliminate Poverty and Hunger
2. Ensure primary education for all
3. Promote gender equality4. Reduce juvenile mortality5. Better maternal care6. Combat diseases 7. Ensure sustainable
environment8. Build global partnership
for development
ICT Development Index (IDI), 2008 and 2007
Singa
pore
Brunei
Darussa
lam
Malaysi
a
Thail
and
Viet Nam
Philippines
Indonesia
Lao P.D.R
Myanmar
Cambodia
0
1
2
3
4
5
6
7
8
IDI 2008IDI 2007
Economy Rank 2008 IDI 2008
Sweden 1 7.85
Singapore 14 6.95
Brunei Darussalam 42 5.07
Malaysia 58 3.96
Thailand 76 3.27
Viet Nam 86 3.05
Philippines 90 2.87
Indonesia 107 2.46
Lao P.D.R 118 1.74
Myanmar 119 1.71
Cambodia 120 1.7
Singa
pore
Brunei
Darussa
lam
Malaysi
a
Viet Nam
Thail
and
Philippines
Indonesia
Cambodia
Lao P.D.R
Myanmar
0
1
2
3
4
5
6
7
8
9
IDI 2008IDI 2007
IDI access sub-index, 2008
It is learnt that Myanmar teledensity will reach 50% by the end of 2015. It may be a challenging job. If fulfilled, Myanmar’s ranking may go up.
Economy Rank 2008 IDI 2008
Hong Kong 1 8.82
Singapore 10 8.02
Brunei Darussalam 43 5.92
Malaysia 62 4.38
Viet Nam 72 3.76
Thailand 80 3.41
Philippines 86 3.3
Indonesia 106 2.6
Cambodia 118 2.06
Lao P.D.R 121 1.91
Myanmar 132 1.74
ICT skills sub-index 2008 & 2007
Thail
and
Brunei
Darussa
lam
Singa
pore
Philippines
Indonesia
Malaysi
a
Viet Nam
Myanmar
Lao P.D.R
Cambodia
0
1
2
3
4
5
6
7
8
IDI 2008IDI 2007
Economy Rank 2008 IDI 2008 Rank 2007 IDI 2007
Korea (Rep.) 1 9.84 2 9.74
Thailand 52 7.74 52 7.56
Brunei Darussalam 78 6.91 75 6.9
Singapore 71 7.07 68 7.07
Philippines 83 6.72 82 6.73
Indonesia 95 6.33 99 6.19
Malaysia 98 6.19 98 6.19
Viet Nam 105 5.85 104 5.83
Myanmar 112 5.05 112 4.99
Lao P.D.R 120 4.33 120 4.27
Cambodia 121 4.28 125 4.06
Niger 159 1.36 159 1.34
ICT skill index is not bad for Myanmar. We may able to improve considerably if we give priority to e-Education and ICT HRD.
Skill may be the deciding factor in the future.
IDI use sub-index 2008 & 2007
Singa
pore
Brunei
Darussa
lam
Malaysi
a
Viet Nam
Thail
and
Philippines
Indonesia
Lao P.D.R
Cambodia
Myanmar
0
1
2
3
4
5
6
IDI 2008IDI 2007
Economy Rank 2008 IDI 2008 Rank
2007 IDI 2007
Luxembourg 1 7.09 3 5.52
Singapore 5 5.81 8 4.84
Brunei Darussalam 36 3.29 31 2.8
Malaysia 44 2.43 42 2.18
Viet Nam 83 0.93 74 0.77
Thailand 86 0.89 78 0.74
Philippines 99 0.51 103 0.32
Indonesia 106 0.39 111 0.25
Lao P.D.R 116 0.29 141 0.06
Cambodia 145 0.06 154 0.02
Myanmar 159 0.01 159 0.01
We may still need to improve awareness that ICT is key for development and systematic efforts need to be invested.
ICT Price Basket 2009 & 2008
Rank EconomyICT Price Basket
2008 2009
3Singapore 0.33 0.41
46Malaysia 1.65 1.93
88Thailand 4.15 3.25
98Indonesia 5.81 7.65
113Philippines 9.25 10.68
114Viet Nam 9.34 11.9
137Lao P.D.R 37.24 38.09
145Cambodia 41.86 43.01
159Myanmar 58.18 N/A
Myanmar is the country whose citizen need to use highest percentage of their income to have access to ICT.
Status :Human Resource Development (2011-2012) Students intakes
Type B.C.Sc. B.C.Tech Total
Bachelor 21103 5495 26588
Honors 8447 1826 10273
Master 2337 535 2872
Ph. D 178 54 232
Total 32065 7900 39965
25 Computer Universities and colleges in through outMyanmar
Private training institutions also provide certificate, ungraduate, post graduate courses.
Status : ICT Industry
Co.s by Region/State
Companies
Yangon Region 357
Mandalay Region 82
Sagaing Region 37
Shan State 26
Ayeyarwady Region 16
Mon State 46
564
Type of Business
Training 62
Software 63
Trading 10
Computer Books 2
Web & Internet Service 8
Network & Maintenance Service
5
Hardware 207
Total 357
PC Penatration 2006 2007 2008 2009 2010 Re-mark
Population 55.4 56.5 57 59.13 60 Million
Household
Desktops 258,000 276,000 300,000 327,000 210,000
Notebooks 172,000 184,000 200,000 218,000 390,000
Total number of PCs
430,000
460,000
500,000
545,000
600,000
•Public sector is lagging behind private sector
•e-Government at the initial stage
•Increasing effort on development of e-Commerce systems
•Trading : Only big supermarkets use IT
•Finance :Private banks are ahead of public banks
•Manufacturing :Use only in traditional data processing area
Little use of CAD,CAM,MRP,ERP
•Education :Increasing very rapidly
•Health :Starting with medical education
Private clinics are ahead of public hospitals
•Regional :Concentrated only in Yangon and Mandalay
Status: ICT Application
Status: ICT Use
• At the early stage.• Functional systems.• Most have static Web page.• A few interactive systems. • Not at SCM, ERM, CRM, ERP• Not integrated.• Only in major cities.
SWOT Analysis of Myanmar ICT Environ-ment
Strength Weakness- High demand in ICT services- High profitability of mobile industry - The government’s high interest in ICT development
- Increase in number of well-educated human resources discharged from national universities and private institutions
- Relatively cheap labor cost in S/W area comparing with neighboring countries
-Limited and unstable telecom infrastructure -Weak ICT industry base -Strong regulation imposed on most of industry sectors
-Lack of national informatization strategy -Bottleneck from basic infrastructure industries: electricity, transportation, etc.
-Constant lack of ICT manpower supply and mismatch of supply and demand
-Less competent ICT human resources -Public’s lack of ICT knowledge
Opportunity Threat-New administration with new ICT policy direction
- Improving international cooperation environment
-Gradual growth in S/W and ICT services industry
-Strengthening regional cooperation with ASEAN, China, India
-Government and private sector’s determination on informatization
- Increasing demand for ICT outsourcing
- Intense competition from neighboring countries in ICT area
- Instability and low efficiency in macro economy
-Weak financial industry base and structure -Limited foreign investment due to U.S. and Europe’s economic sanction
-Outflow of ICT human resources to foreign countries (Singapore, Thailand, etc.)
Focused Areas
e-Education
ICT Industry
Liberalization
Standards
ICT Human Resource Development
6
7
5
4
2
Infrastructure Building
Industry Promotion
Legal Framework
e-Society11
Informatization10
e-Government 9
e-Commerce 8
ICT Infrastructure
3
Utilization
1Infrastructure
Building
Industry P
romotion
Utilization
Productivity Quality Products Good ServiceNecessary Outcome
ManufacturingTrade
Finance & Service
Life Stock & FisheriesForestryMining
Oil/GASAgriculturePotential Sectors
Capital InvestmentElectricityTelecom
InfraLogisticHRDLegal Framework
Enabling Environment
Strategic Direction
Inclusive Social Economic Development & Poverty Reduction
InclusivenessFair CompetitionTransparencyClean
GovernanceGood
GovernanceHuman RightsBasic Elements
Involvement in ICT HRD in Myanmar?
• Assistance in HRD Projects• Establishment of IT educational Institutes• Internship programs
Productivity Quality Products Good ServiceNecessary Outcome
ManufacturingTrade
Finance & Service
Life Stock & FisheriesForestryMining
Oil/GASAgriculturePotential Sectors
Capital InvestmentElectricityTelecom
InfraLogisticHRDLegal Framework
Enabling Environment
Inclusive Social Economic Development & Poverty Reduction
InclusivenessFair CompetitionTransparencyClean
GovernanceGood
GovernanceHuman RightsBasic Elements
Investment in ICT Infrastructure Development?
• Assistance in Infrastructure Building• Any Companies should find opportunities to invest in Infrastructure Projects
Productivity Quality Products Good ServiceNecessary Outcome
ManufacturingTrade
Finance & Service
Life Stock & FisheriesForestryMining
Oil/GASAgriculturePotential Sectors
Capital InvestmentElectricityTelecom
InfraLogisticHRDLegal Framework
Enabling Environment
Inclusive Social Economic Development & Poverty Reduction
InclusivenessFair CompetitionTransparencyClean
GovernanceGood
GovernanceHuman RightsBasic Elements
Involvement of Capital Investment in IT Sector?
• Creation of State Investment Funds or Private Investment Funds for Investment in ICT sector in Myanmar
Productivity Quality Products Good ServiceNecessary Outcome
ManufacturingTrade
Finance & Service
Life Stock & FisheriesForestryMining
Oil/GASAgriculturePotential Sectors
Capital InvestmentElectricityTelecom
InfraLogisticHRDLegal Framework
Enabling Environment
Inclusive Social Economic Development & Poverty Reduction
InclusivenessFair CompetitionTransparencyClean
GovernanceGood
GovernanceHuman RightsBasic Elements
Involvement in Development of economic Sectors?
• Find opportunities in interested Sectors and conduct feasibility studies quickly• Find good business partners and build good relationship in interested Sectors quickly
Productivity Quality Products Good ServiceNecessary Outcome
ManufacturingTrade
Finance & Service
Life Stock & FisheriesForestryMining
Oil/GASAgriculturePotential Sectors
Capital InvestmentElectricityTelecom
InfraLogisticHRDLegal Framework
Enabling Environment
Inclusive Social Economic Development & Poverty Reduction
InclusivenessFair CompetitionTransparencyClean
GovernanceGood
GovernanceHuman RightsBasic Elements
Involvement in Myanmar Development?
• Bring in Japanese Technology Knowhow, Work Ethics and Quality Consciousness
Productivity Quality Products Good ServiceNecessary Outcome
ManufacturingTrade
Finance & Service
Life Stock & FisheriesForestryMining
Oil/GASAgriculturePotential Sectors
Capital InvestmentElectricityTelecom
InfraLogisticHRDLegal Framework
Enabling Environment
Inclusive Social Economic Development & Poverty Reduction
InclusivenessFair CompetitionTransparencyClean
GovernanceGood
GovernanceHuman RightsBasic Elements
Opportunities in Myanmar
Myanmar Attractiveness
• Strategically Located between China, India & ASEAN
• Significant Market of 60 Million People
• Young and Dynamic Work Force
• Untouched Natural Environment and Historical Significance for Tourism
• Agricultural Fertile Lands
• Natural Resources
Changes in Strategic Elements
• New Democratic Government
• Dedicated, Open Minded and People Oriented Head of State & Influential Public Leader working together
• Significant Improvements in Rule of Law and National Reconciliation
• Significant Improvement s in International Legitimacy
Cooperation for mutual benefits
MyanmarProblems & Weakness
•Weak Infrastructure•ICT HRD quality • Awareness•Cyber Law•Technological know-how•Job Creation•Entering international Market•Financial resources
InvestorsProblems & Weakness
• Demography• Shortage of ICT HRD • High cost• Legacy Systems• Req. New Applications• Language • Culture
• Technical Transfer• Financial Assistant• Consultation• Outsourcing• Investment
• Outsource Human Resource• Link to ASEAN• Globalization
• Cost Saving•Extension of Working Hours •Overcome Manpower shortage•Investment Opportunities•New Market
•Technology Transfer•Know-How and Experiences• ICT use•Job Creation• High Income •Growth in ICT industry•Increase Competitiveness of Myanmar
Advantages Advantages
Investment in IT outsourcing?
Global Outsourcing/Offshoring Industry Trend
• $425 Billion in 2010• $500 Billion Forecasted for 2011• The offshore outsourcing model can bring cost
saving of 50% to 70%
ACE Data Systems Co., Ltd.
28%
16%15%11%
9%
22%
Outsourcing Activities
ITHRSales & MarketingFinanceAdministrativeAll Others
Source : www.offshoreitoutsourcing.com
Top destinations for IT Outsourcing/Offshoring in Asia
World Rank
Country Overall Index
Cost Competiveness
Resource & Skill
Business & Economic Environment
1 India 7.1 8.3 6 4.2
2 Indonesia 6.7 8.6 4.3 4.4
4 Singapore 6.5 6.4 5.7 9.4
5 China 6.4 7 5.6 5.6
7 Philippine 6.3 9 2.8 3.9
8 Thailand 5.9 8.2 2.3 5.9
10 Malaysia 5.8 7.9 2.2 6.9
17 Vietnam 5.4 7.4 2.5 4.5
18 Sri Lanka 5.4 8.3 1.2 4.3
Current Myanmar Situation
ACE Data Systems Co., Ltd.
Index
HR Cost Competitiveness
Telecommunication Cost Competitiveness
Transaction Cost Competitiveness
Cost Competitiveness
Index
Basic/Beginner Levels
Highly competitive professionals
Resource & Skill
Index
Benefits & Incentives
Tax, Standardization, Transparency, Financial Services, Infrastructure, Legal Institutions
Business & Economic Environment
Current Myanmar Status
• Cost is the Lowest in Japan, China, Philippine, Vietnam, Sri Lanka, Myanmar
• Cost Performance is higher than China
IT Outsourcing
• Project Outsourcing• Personal Outsourcing• Oversea Development Centers
Approach :Low cost : Start with fresh graduates, train them
Conclusion
• Myanmar is really changing and reversal is impossible
• Development in Myanmar presents enormous Investment Opportunities in IT sector
• Any IT cos. is in the very good position to take those Opportunities by working together with Myanmar for Mutual Benefits
• Will be good we can do something by 2015.
Thank You!