Korea’s IT Policies and Korea-China Cooperation October 25, 2011 Dr. J. Y. Kim Executive Director, Int’l Cooperation Division of NIPA

Contents Today’s IT Industry in Korea IT Industry Trends 1 2 3 4 Today’s IT Industry in Korea Korea’s IT Policies Korea-China Cooperation Programs IT Industry Trends

1. Today’s IT Industry in Korea

1. Today’s IT Industry in Korea IT as the Driving Force of the National Economy IT industry in Korea occupies about 30% of total exports as a core growth engine for Korean economy. Total Export vs. IT Export (2010) Total Trade Balance vs. IT Trade Balance 78 58 59 -13 40 ‘08 ‘09 ‘10 + = IT Trade Balance Total Trade Balance [Unit: $ Billion] -71 -19 Trade Balance except IT $ 466.4 Billion IT Export Total Export $ 153.9 Billion 41 ‘08 ‘09 ‘10 -37 1/14

1. Today’s IT Industry in Korea Leading Items NO.1in the world NO.2in the world Displays with a Global Market Share (46.5%) Mobile Phones with a Global Market Share (30.2%) Semiconductors with a Global Market Share(42.8%) ※ UN e-Government Readiness Index (’10) World’s No.1, ITU Information and Communications Development Index (’10) World’s No.3 , EIU Government Broadband Index (gBBi) World’s No.1 2/14

1. Today’s IT Industry in Korea Korea e-Government from Catch-up perspective

2. IT Industry Trends

2. IT Industry Trends Increasing Importance of IT and Software IT industry is showing a high growth rate with an annual average of 10.7% growth since 2002. Particularly, the source of competence in the IT Industry moved from hardware to software. Average annual economy growth since ‘02 Software portion in the product development cost Transition of the competitiveness of mobile phones Process of hardware manufacturing was mobile phone’s competitiveness. Software (OS,UI) makes mobile phones competitive. 53.7% 52.7% 45.5% Electronic information Communication device Medical device IT Field General 2.9% 10.7% 3/14 8

2. IT Industry Trends Convergence is Essential for Creating a New Growth Engine Expansion of the concept of the single line method to the productive improvement method This change is based on fusion and application for the productive improvement of the country and the entire industry. ** “Convergence” needs to be capitalized. 4/14 9

3. Korea’s IT Policies

3. Korea’s IT Policies Competency Level-up in the global IT convergence market IT Convergence Diffusion Next-generation Mobile Technology Development Human Resources Development 5/14

1) IT Convergence Diffusion 3. Korea’s IT Policies 1) IT Convergence Diffusion New market creation by converging IT with manufacturing and service industries - Automobile, Shipbuilding, Robotics, Healthcare, Smart Grid, etc. Deregulation for the new IT convergence markets - Medical Treatment, Automobile, Machinery, etc. Promotion of embedded software and system-on-chip development - Supporting world best softwares and star fabless companies 6/14

2) Next-generation Mobile Technology Development 3. Korea’s IT Policies 2) Next-generation Mobile Technology Development World’s 1st demonstration of the 4G mobile communication system (January 2011) Strengthening mobile related softwares - Technology development - Application testing support, etc. Creation of new mobile markets - Mobile RFID, Mobile cloud computing infrastructure 7/14

3) Human Resources Development 3. Korea’s IT Policies 3) Human Resources Development Nurturing next-generation creative and talented engineers - Software MAESTRO program, etc. - Program for high level engineers (Architects) Cooperation between school and industry - Resolving skill mis-matches between universities and industries - IT mentoring : Students training in the IT companies - Increase of internship programs - IT job fair (Job Expo 2011,Seoul) 8/14

4. Korea-China Cooperation Programs

Cooperation Procedure 4. Korea-China Cooperation Programs 1) IT Consulting National Informationization Master Plan Feasibility Study for a specific project Cooperation Procedure ① Project Identification MKE(Korea) Counterpart NIPA ② G2G Cooperation MOU ③ Executive Committee ③ ④ Working Group ADB, IDB, AfDB World Bank KOAFEC for Africa ⑥ KEXIM, KOICA ⑤ Project Execution Dept. of Budget Budget Arrangement Support ⑥ Economic Development Board 9/14 16

Public Sector Solution Industry-Specific Solution 4. Korea-China Cooperation Programs Cooperation Areas E-Government Sector Public Sector Solution Industry-Specific Solution Resident Management System (NID) Tax Management system Customs Management system Procurement system Education Management System, E-Learning Land Registration system Financial Information Management system e-Security (Police, Crime control, 911) Immigration Management Systems etc ITS (Subway, Railway) system (fare collecting equipment, etc) Election management system (vote counting equipment, etc) Post Office system (Auto-classification equipment, barcode reader) Surveillance system based on DVR, FOM(Fiber Optic Mesh), etc Airport Information system Auto Giro system (Giro reader, OMR equipment) Hospital Information system (PACS) Network Integration (WAN, LAN equipment) EAI(MFC) for electronics, Assembly lines, semi-conductor, etc Plant and engineering embedded SI system Home trading system, Core banking system POS system (Barcode), Retail, Logistics, Pos… Wireless Internet Platform (WIPI), Billing System 10/14 17

4. Korea-China Cooperation Programs 11/14 18

4. Korea-China Cooperation Programs Consulting Projects in 2011 - Master Plan (3 projects) - Feasibility Study (14 projects) - Cooperation with International Organization (6 projects) → World Bank-NIPA Cooperation : 5 consulting projects Russia ITS for Saint Petersburg Kazakhstan Mobile Platform Bangladesh Mobile Application Uzbekistan Mobile Payment Mongolia Health 12/14 19

4. Korea-China Cooperation Programs 2) Capacity Building – Annual Conference Title : Sharing Experience in IT Service 2011(8th) Format : Conference & Reference site tour (3-day program) Date : November 23~25, Seoul, Korea Key Values Sharing experiences with CIOs and IT decision-makers from other countries Experiencing and benchmarking advanced information systems of Korean IT industries Developing cooperation between NIPA and other countries’ organizations 13/14 20

4. Korea-China Cooperation Programs 3) Senior Experts(Retired from Public & Private Sectors) Provides IT consulting services, related to the socio-economic development 67 Experts in 25 Countries - Areas : Government Data Center, Postal Information System, e-Trade System, Port Logistics System, etc. - Countries : Uzbekistan(SMB policy), Ajerbaijan (IT Management and Water Treatment), Kyrkyzstan(IT and Economic Policy) 14/14 21

Thank you 22