Korea Needs Bold IT Roadmap
By Kim Tong-hyung
Staff Reporter
Korea has established a leading role as an innovator in information technology and telecommunications, but with other nations catching up, it is crucial for the country to find new growth areas to maintain its edge.
Therefore, the government is willing to spend an outlandish amount of taxpayer money in developing the next-generation of high-tech services and products, which would make companies richer, boost employment and revolutionize the way people live and do work.
Stressing the need for a new, long-term strategy for the information technology sector amid worries of a flattening growth trajectory, the Ministry of Knowledge Economy released an ambitious five-year, 3.5 trillion won ($35 billion) plan last week that it said would propel progress.
However, rather than revealing a fresh approach or purpose, the ``New IT Strategy" seems more like a watered-down version of the ``IT 839" program pitched by the previous government, which has yet to deliver on many of its bold promises.
``Hope the government is right this time," said an official from a Korean software company, who didn't take the ministry's initiative to nurture 10 world-class software makers by 2012 seriously.
``The wish list is long, but the paucity of detailed plans is also evident. An average Korean software maker is likely to be just one of a dozen subcontractors delivering products to a bigger company, and I doubt that the government would have any say over industry structure," he said.
Rosy Predictions
The Knowledge Economy Ministry's roadmap plan focuses on accelerating the integration of information technology in ``all industries," including the manufacturing and service sectors.
The ministry is planning to establish a cooperative framework to strengthen the connection between information technology firms and companies from traditional industries, an effort that would require cooperation from other government organizations such as the Ministry of Defense and the Ministry of Land, Transport and Maritime Affairs.
The government is planning to spend 70.6 billion won this year to research technologies for convergence in five industrial sectors and expand the research to 12 sectors by 2012.
The ministry is also planning to expand the use of radio frequency identification (RFID) technology in six sectors including automobile manufacturing and retail, a project in which there will be 6 billion won invested this year. The advancing of embedded software products was another growth target the ministry identified.
The whole idea is to foster 10 new industries, evolved through the process of technological convergence, that produce at least 1 trillion won in revenue by 2012. By that time, the government hopes to have more than 1,000 information technology companies with more than 50 billion won in revenue, and 10 world-class software makers.
``To put it simply, the growth of the information technology sector is only possible by expanding out of its current circle and integrating better with traditional industry sectors," said Yu Su-geun, director of the ministry's information and communication policy bureau.
Government officials are also planning to build on the success of Korean companies in semiconductors, display panels and wireless communication devices.
Memory chips have been a crucial cash cow for Korean electronics makers, but the government now wants them to expand their brilliance to the emerging area of system-on-chip, which refers to integrating the components of a computer or other electronic systems into a single integrated circuit.
Through the five-year span, the government will invest 130 billion won to cultivate homegrown technologies and build a cooperative framework between semiconductor makers and other companies such as mobile-phone manufacturers and auto makers. Policymakers are looking to help handset makers secure inroads into the development of standard technologies for fourth-generation (4G) mobile telephony.
Plenty of Headlines, Short in Detail
The Economy Ministry was keen to differentiate its roadmap plan from the IT 839 program adopted by the old Ministry of Information and Communication, replaced by the Korean Communications Commission (KCC) under President Lee Myung-bak.
Among the very first sentences of the 20-page news release was: `New IT Strategy' differs from the IT policies of the past in its range and direction.'' However, critics argue that not much is new, some just seeing it as a dressed up IT 839 program.
The IT 839 was intended to develop eight services, three infrastructures and nine products as new growth sources.
It contributed greatly to advancement of some areas ― such as WiBro, the Korean version of WiMax, that provides wireless broadband connections ― but showed mixed results in other areas like mobile television, called digital multimedia broadcasting (DMB) here.
The New IT Strategy seems to share IT 839's thirst for giant expectations and also its lack of execution plans. Amid the crowded lineup of industries the ministry identified as potential growth engines, it's hard to guess where strategic focus lies. And nobody seems to believe that fostering 10 new industries producing 1 trillion won in revenue or having 1,000 info-tech firms with more than 50 billion won in revenue by 2012 are realistic goals.
The heavy reliance on investment from the private sector could also prove unreliable. The five-year plan is dependent on companies investing a total of about 110 trillion won to develop the new technologies and industries, an amount roughly 30 times bigger than the 3.5 trillion won promised by the government.
There is no way to be sure that the companies will induce that kind of money accordingly with the government timeline, and the ministry has yet to suggest ideas on how to induce such massive investment.
Perhaps the biggest flaw of the New IT Strategy is that it focuses on the development of the technology itself, and fails to provide a detailed scheme on how the technology will be implemented under the current legal and administrative environment.
For example, the government has long been declaring its ambitions for ``u-healthcare," or the integration of information technology and medical services. However, the obstacle proved not to be the technology itself, but the current law that prevents doctors diagnosing a patient remotely through telecommunication.