National competitiveness no longer depends on traditional real-world strengths, but on an enhanced information infrastructure that makes virtual reality applications possible.

In recent years governments and corporations have been loudly touting the term digital convergence – the digital delivery of previously separate industries, such as telecommunications, computers, and entertainment.

This year competition will be particularly fierce with regard to digital television and the merger of the three networks – cable television broadcasting, telecommunications and the Internet sector.

The industrialized nations have made digital convergence a priority in national development to boost competitiveness, having reached or aiming to reach 100 percent broadband Internet penetration this year. 

Likewise, the developed world is rapidly phasing out analog television altogether, and replacing it with digital TV.

Even the scantly populated developing nation of Mongolia is rolling out digital convergence in full force.

On a visit to Mongolia in August last year Su Herng, chairperson of the National Communications Commission (NCC), was surprised to find that already more than 4 percent of Ulan Bator's one million residents use Television Over Internet Protocol (IPTV) services, which deliver TV programs via the Internet.

"In 2011 Univision, whose parent company is the Mongolia Telecom Company, already provided bundled triple- play services of television, phone and Internet via an optic fiber network. They are making progress very rapidly. Taiwan needs to make an extra effort," says Su with obvious concern.

Battling for the Gigabyte Generation

In Sweden telecommunications providers already offer high-speed broadband Internet services with up to 1Gbit/s (a transmission speed of up to 1Gb or 1024Mb, per second). Japan and South Korea are also competing in rolling out 100Mbit/s broadband networks. International competition in digital convergence has begun in the " Megabyte Generation" and is quickly moving into the " Gigabyte Generation.

Once every household has high-speed broadband access, not only going online will be faster, but also all kinds of customized two-way interactive applications such as multiplayer gaming. It's these potentially huge business opportunities that broadband Internet providers are after.

Chiang Han-i, who heads the Digital Life task force  at the Market Intelligence and Consulting Institute (MIC) under the Institute for Information Industry, notes that the biggest impact from digital convergence on corporations is that"two-way interaction allows all consumers to personally customize the services they need. This has brought about an era of fragmented audiences in media and advertising . Managing online groups and communities is what strategists must go for."

In late 2011 the executives of some 2,500 telecom,Internet, and gaming companies from around the world gathered at the glitzy Shangri-la Hotel in Guangzhou.

They attended the first global R&D conference hosted by China Mobile Limited, the world's largest telecommunications company. For a whole day conference participants discussed how a platform for digital convergence could be established on mobile networks.

"China Mobile wants to become a world-class leader in digital convergence. It is very ambitious," observes Roger Chen, a vice president of Taiwanese mobile operator Far EasTone Telecommunications and the only Taiwanese executive invited to deliver a speech at the conference.

For the traditional media the changing environment constitutes a formidable challenge.

In olden times consumers were only able to select channels with their remote controls.With the arrival of digital convergence, they can hit a computer keyboard or manipulate the touchscreen controls of a smart phone or the display of a tablet PC to select the digital content they want, whenever they want it.

Even Britain's tradition-steeped British Broadcasting Corporation (BBC) has jumped on the digital convergence bandwagon in a bid to establish an interactive relationship with the younger generation of electronic gadget fans.

In fact, the BBC already established its iPlayer TV and radio services two years ago. In cooperation with Sony, Microsoft and Apple, the BBC's entire TV and radio content was integrated for viewing on smart phones, tablet computers, PCs and digital television sets.

Users can select their favorite program anytime. Presently more than 1.8 million people are using such services every day, opening up a digital delivery channel for the traditional broadcaster.

Around the globe content producers and service providers are trying to figure out how to make profits from investing in the huge digital convergence market.

As Minister without Portfolio Chang Jin-fu, head of the the Executive Yuan's task force on digital convergence, puts it: "It feels like everyone has just started, and no one has found a successful development model for digital convergence yet."

Translated from the Chinese by Susanne Ganz