2010-07 - Korea IT Times

Policy
broadcasting equipment is Korean-made.
Still, the Korean IT industry's level of globalization
is as low as that of underdeveloped
nations. As for broadcasting equipment,
demand-based joint technology development
needs to be pursued, in which
parts and materials suppliers team up with
demanders who pro-mise to purchase the
finished goods. Do-mestic broadcasters
can be the buyers of jointly developed
broadcasting equipment that also needs to
be exported to other nations.
Director General Jeong Marn-ki continued,
"Most of the Korean software in use
is far from globalization. For instance, a
comparison between maps provided by
some Korean company and Google Earth
shows that while the map offered by some
Korean company does not go beyond the
Korean peninsula, Google's map services
allow users to explore every nook and cranny
of the world.
Therefore, Internet users living abroad
have no access to Korean-made products
and a majority of Koreans prefer Google
Earth to Korean counterparts. Take computer
vaccines for example, most Internet
users think that foreign-made vaccines are
better in performance and interpretability
and relatively light compared with Korean
ones. Although Korean vaccines are good
at fighting against domestically wellknown
viruses, they are vulnerable to foreign-born
viruses. As a result, the competitiveness
of the Korean software industry
can be strengthened only through globalization."
Competitive industries have
also weaknesses.
"Competitive industries such as semiconductors,
mobile phones, displays, fiber
optic Internet, digital TV and DMB also
have vulnerable areas that need to be reinforced.
As for displays, Korean display
panels' global share exceeds 50 percent,
but most of the raw materials of display
panels are imported. Over 80 percent of
the core equipment related to exposure,
deposition, etching and heat treatment is
imported. This is true of semiconductors
as well. Korea is often called a semiconductor
powerhouse. But it is true only in
terms of memory semiconductors like
DRAM and flash memory. Korea has almost
nothing when it comes to non-memory
semiconductors like SoCs (System on
Chip)," explained Director General Jeong.
In the case of Korea's display industry, if
Japanese and US display equipment manufacturers
fail to supply global leader
Samsung Electronics and LG Display
with key equipment, the two display makers
have to bring their entire production
lines to a halt. Moreover, the global SoC
market has been a playground for US giants
like Intel, Qualcomm and Broadcom
(a combined share of 60 percent), Japan
(20.5 percent), the EU (10.9 percent) and
Taiwan (5.1 percent). Korea's share in the
global SoC market is less than half of
Taiwan's.
Director General Jeong mentioned, "The
Ministry of Knowledge and Economy
plans to unveil Plan for the Development
of the SoC Industry," under which KRW
2 trillion in public-private funds will be invested
by 2015 to raise the exports of SoCs
and its global market share to as much as
USD 33 billion and 9.5 percent respectively.
The plan also includes four strategies.
Firstly, implementation of a project in
which system manufacturers and fabless
semiconductor companies jointly develop
SoCs, creation of an SoC cluster in Pangyo,
building a KRW 70 billion fables
cluster fund and fostering SoC experts.
Along with the four strategies, 13 sub-tasks
will be hammered out to fully implement
the plan next year.
What's more, factoring in the fact that
development of next-generation equipment
costs tens of billions of won, the
Ministry of Knowledge and Economy
plans to provide a total of KRW 500 billion
in R&D funds so as to achieve "demand-based
localization of equipment development
and production," in which
equipment makers participate in joint development
projects two to three years before
scheduled commercialization.
Deregulation is not an option
but a must.
When President Lee Myung-bak took
office he said, "Since 2000, companies' facility
investment has stood at a mere 2.2
percent, which greatly stunts economic
growth. The sluggish facility investment
can be blamed on various kinds of government
regulations." Government regulations
on companies are a very serious
problem.
The Federation of Korean Industries
(FKI) and Korea Economic Research
Institute (KERI) have recently evaluated
about 5,000 government regulations and
concluded that 1,664 of them need to be
reformed. In other words, three out of 10
regulations are unnecessary. Director
General Jeong said, "The Electronics and
Telecommunications Research Institute
(ETRI) developed WIPI (Wireless Internet
Platform for Interoperability), which is
Korea's standard mobile platform that
standardizes mobile carriers' different mobile
platforms to allow them to offer the
same contents. Although WIPI itself is so
well-intended, use of WIFI is not an option
but a requirement. As a result, Black-
Berry, developed by Canadian company
Research In Motion (RIM), failed to break
into the Korean market two years ago due
to the requirement of using WIPI. If it
hadn't been for the regulation, Koreans
would have got their hands on smartphones
much earlier."
Thus, the Ministry of Knowledge and
Economy (MKE) is determined to scrap
or scale back conventional and perfunctory
industry-wide regulations imposed on
broadcasting & communications, the media
and the IT industry's R&D. In particular
the "2009 MKE Plan for Regulatory
Reform" has been implemented to lower
the entry barriers in 29 sectors for foreign
investors. Those sectors will be opened in
stages this year through consultations with
relevant ministries.
An era of convergence
The IT industry's growth is not as impressive
as it used to be. Its growth had
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