Wed, Aug 30, 2006 page8

• Take an alternative look at APEC

  • By Darson Chiu 邱達生
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  While the media have been placing great emphasis on the campaign against President Chen Shui-bian (陳水扁), life goes on and APEC moves on. The 2006 APEC Leaders' Meeting will be held in Hanoi, Vietnam, from Nov. 18 to Nov. 19. Put aside the question of who will represent Chen at the meeting; of more interest is a look at APEC from the perspective of its organizational structure and functions.

  Technology is essential for an organization's sustainable development and operation. For a profit-driven organization, technology is an important component for optimizing output and maximizing profit. Technology is also a very important factor for nonprofit organizations; however, identifying inputs, outputs and the relationship between them is not as easy.

  The inputs and outputs of nonprofit organizations do not necessarily have market values, but technology is still needed to transform inputs into outputs.

  APEC is a nonprofit, intergovernmental and regional organization. The technology embedded and adopted in APEC is related to its interplay with member economies and other organizations. There exist intra-relationships between APEC and its member economies as well as interrelations between APEC and other organizations.

  The intra-relationships and interrelationships of APEC are influenced by its core and enabling technologies. In addition, the relevant technologies are closely related to APEC's organizational structure.

  APEC is not only an organization but also a forum that operates based on open dialogue among governments with consensus as the decision-making mechanism. APEC is also a non-binding organization, which means that there are no compulsory obligations for APEC member economies.

  Fulfilling the interests of APEC member economies is in accordance with APEC's mission, which is referred to and categorized as three pillars: trade and investment liberalization, business facilitation, and economic and technical cooperation.

  The first pillar reduces and eliminates tariff and non-tariff barriers that hinder regional trade and investment.

  The second pillar reduces business transaction costs by improving access to information related to regional trade, and coordinating relevant policies and strategies to smooth the progress of economic growth.

  The third pillar brings together APEC member economies and builds the basic capacities for promoting regional trade, whereas developed economies are encouraged to provide technological assistance to developing economies.

  Tremendous gaps exist in economic development among APEC economies. There are no 100 percent service-oriented or manufacturing-oriented economies in the APEC region because economic structures have evolved in response to internal and external needs. The internal and external needs demand a mixture of outputs of services and manufacturing goods.

  A service-oriented economy must focus more on human resource development because humans, or labor, are the most important input for a service-oriented economy.

  Instead of treating labor as a fixed input, like most economists do, a service-oriented economy needs to stress the importance of human relations-focused natural systems to add value to outputs.

  The technology used by a service-oriented economy is the technological activity of human resource capacity building. A manufacturing economy considers labor to be simply one of the inputs, like capital and machinery. The technology required by a manufacturing economy efficiently processes all inputs to generate maximum or optimal outputs.

  In addition to maximizing efficiency, the technology is also used to create added value.

  By comparison, the use and impact of technology in a service-oriented economy and a manufacturing-oriented economy are equally important to create added value.

  The technology used in a service-oriented economy, however, strengthens labor inputs, whereas the technology used in a manufacturing economy empowers technological activity.

  All APEC member economies are partially service-oriented and manufacturing-oriented, which indicates that APEC economies need to take advantage of appropriate technologies to optimize their national interests.

  In trying to promote economic cooperation among member economies, APEC has to realize that adopting applicable technologies impacts on economies differently. It should therefore adopt appropriate core and enabling technologies to fulfill its goals.

  Core technology is that which helps the organization to fulfill its mission and development. Core technology is what sustains an organization. APEC's core technologies are its hierarchical structure and consensus decision-making mechanism that resolve potential conflicts among member economies.

  With developed economies building interest in trade liberalization and facilitation, APEC has taken advantage of its structure and mechanisms to successfully deal with the diverse interests of member economies.

  The development of APEC's core technologies has been influenced by its environments and other international organizations. Whereas other organizations are hindered by their inflexible organizational structures and compulsory obligations, APEC has adopted a unique structure that is hierarchical in implementing action plans, non-binding in commitments, and consensus-based in decision-making.

  The core technologies help APEC fulfill its mission with respect to the particular environments in the Asia-Pacific region. APEC uses its core technologies to optimize outputs and resolve potential problems, such as gaps in economic development and different opinions in cooperation formats among APEC member economies.

  Enabling technologies are those that facilitate the core technology in doing what it does best. The enabling technologies of APEC comprise a management approach to coordinating committees; working groups and task forces; and using the latest information technology to reduce the transactional costs of communication among APEC member economies.

  The management approach is conducted by practicing transformational leadership at the secretariat level and directive leadership at the organizational level. The communication technology of APEC has evolved from face-to-face meetings to planned virtual meetings, and this has updated the enabling technologies that power the core technologies.

  The enabling technologies of APEC are related to new management and information technology, whereas APEC depends more on information technology to reinforce its core technologies because of geographical distances in the Asia-Pacific region. The enabling technologies assist APEC's core technologies in sharing information faster and managing organizational structure and decision-making more effectively.

  The technologies adopted by APEC are different from technologies adopted by profit-driven organizations. The technologies have positively impacted on APEC and its environments.

  Taiwan has been a dedicated member economy of APEC. When we look at APEC from an alternative angle such as organizational technology, we can come up with diverse ideas to contribute to this organization as well to the region.

  Darson Chiu is an associate research fellow at the Taiwan Institute of Economic Research.
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