Korea has established competitive advantages in IT industry in terms of Telecommunication infrastructure, large Internet user base and various usages, high-quality IT professionals, government initiatives and policies to facilitate the development of IT industry, and dominant market position in several IT products. However these advantages and some weaknesses mentioned in Analysis- National IT strengths & weaknesses seems have different effects on each of sub-IT industries
1. Impact on Telecommunication / e-commerce industry
Korean Telecommunication market is fully deregulated and most of state-owned companies has been privatized. These liberalization and deregulation will encourage market competition and furthermore market players to offer better product or service at lower price through continuous development of technology and reengineering of its business model.
More than one out of two Korean access Internet regularly. Their usage pattern is not merely searching information or e-mailing but expanded to shopping, entertainments through multimedia or gaming. This indicates that content providers need to consider quality of contents and customer experience which is higher level of offerings. In addition, As penetration rate for mobile internet grows, the demand for the diversity of available contents and functions are growing.
In accordance to growth in total size of e-commerce, the privacy protection and protection from fraud should be strengthened. The credit card usage in electronic transaction both in B2C and in B2B market will continue to grow and the rate of payment through mobile phone in small amount of money will replace the electronic cash eventually as mobile phone subscribers grows.
The demand for the skilled IT labor force will grow accordance to growth in market size. However, there is relatively smaller portion of middle-level skilled human capital such as web designer. Thus the education or re-training institutions for IT skills are demanding.
The enforced policies and government efforts to protect Intellectual Property Right will have impact on overall content provider market in terms of choosing resources for contents and in a way of presenting them.
2. Impact on Hardware Industry
Korea positioned itself as leading nation in terms of semiconductor, mobile phone, and LCD markets. This is because the high-level of technology and skilled, hard-working labor force. The shortage in IT human resource and relatively higher cost for labor force may force hardware manufacturers to move into other nations in which offer cheap labor cost and lower operation cost such as China and Malaysia.
However, the R&D seems to be conducted mainly in Korea by virtue of favorable environments such as IT cluster (DaeDeok Valley), well-developed infrastructure and high level of skilled workforce in Korea. Korean government has showed its willing to support for domestic R&D project and also for joint ventures with foreign investment in R&D area at "Cyber Korea 21" and through "DaeDeok Valley" implementation plan.
3. Impact on Software Industry
The IT professionals combined with IT cluster where aimed to share knowledge and information and commercialize eventually, will facilitate the development of software. In addition foreign investment through either IT cluster or joint venture with domestic firms, may pull the level of Korea's software industry up to global level. The government initiatives for joint R&D project with company and educational sectors will also has positive effects on overall development in software industry.
The enforced policies and government efforts to protect Intellectual Property Right will encourage the domestic development of software and foreign investment.
In accordance with the rapid growth in virtual marketplace, the issue of security is everywhere. Considered the packaged software such as security requires high level of customization and localization which become high entry barriers for foreign companies, the software market will grow and the market share of domestic firm will increases too.
This site was developed for the class,
"Impact of National Information Technology Environments on Business"
at Kogod School of Business, American University, Washington DC
Created by Jung Im Won & Hyun Sang Park
Last updated : December 18, 2002