NK eager to keep IT sector afloat

By Kim Young-jin

The attention of the technological world is focused on South Korea as Samsung clashes with Apple in a heated patent infringement spat. But North Korea has also pinned high hopes on technology, raising debate over whether it can vie in the industry.

Pyongyang, emphasizing its IT sector as an outsourcing destination, has droves of technicians trained in areas from animation and game design to IT security, analysts say.

“Because it is comparatively far behind in economic development, North Korea doesn’t want to follow the initial steps of other countries and take on declining industries,” said Paik Hak-soon, an analyst at the Sejong Institute. “It wants a jumpstart to keep pace with the 21st century.”

The push is part of the North’s strategy to develop under new leader Kim Jong-un, who during a speech in April stressed the need to “stir up the hot wind of great innovation.” It recently inked a deal with China to develop the Hwanggeumpyong-Wihwado special economic zone on the border into an information hub.

The North benefits from latecomer status in the field, saving dramatically on research and development costs. Newly-developed telecommunications capabilities and a new optical fiber line hooking major cities to a national intranet could impact the process as well.

Some 10,000 professionals work in the field and many more have been trained, according to report by Paul Tija, founder of GPI Consultancy, an independent Dutch consultancy firm in global IT sourcing that offers study tours to the North.

The biggest of the several hundred IT corporations is the Korea Computer Center, which operates overseas branches that allow it to work with clients in Europe and Asia, the report said. It produces its own version of the operating system Linux, e-learning and products including an award-winning version of the popular game “Go.”

The firms offer services from data entry to Web site production and mobile app development. Advanced skills include “programming inputs for enterprise resource planning systems, business process management systems, and e-business applications,” the report said. Specialists also work in IT security such as fingerprint identity products.

Cost may be the biggest selling point.

“Tariffs can be less than $10 per hour, enabling clients to employ experienced software engineers for just a few hundred dollars per month. This means North Korea undercuts not just India but also later emerging software locations like China or the Philippines,” Tija said.

But concerns linger given the country’s notorious isolation.

Limited internet activity and lack of infrastructure hamper communication and geopolitical tensions over Pyongyang’s provocative behavior create jitters. The North has been blamed by Seoul for a number of cyber attacks, raising the likelihood that its security technology was honed to prevent such attacks on its own systems.

“The regime is still consolidating its power,” one South Korean expert said. “So it is too early to say if it will make real moves to bring fuller engagement in this or other areas. When it comes to technology, its main concern is still with the military.”

Tija concluded that while the geopolitical situation could not be ignored, the North was “serious about its aspirations to grow in the area” and that IT relationships could foster rapprochement while tapping into a “low-cost, high-skill talent pool.”