1. Promoting IT Industry in Korea KOREA Young Nahn Baek Korea IT Industry Promotion Agency Email : ynbaek@software.or.krynbaek@software.or.kr Date : 18 th October 2004

2. Korean IT : Present & Future

3. KIPA MIC Source: Korea National Statistical Office Global Status of Korean Economy Population 47.9 m Export 194b(US$) Import 179b(US$) Reserve 194b(US$) GDP 194b(US$) 26th12th11th13th4th

4. KIPA MIC Global Status of Korean Information Society Global no. 1 in Broadband Internet Penetration Leader in Mobile Communication Penetration Leader in e-Government

5. KIPA MIC Share of IT Consumption in Total Household Consumption Share of IT Manufacturing in Total Manufacturing Source : OECD (2002) U.S.A 17 th (3.7%) Korea 1 st ( 6.3 %) Germany 21 st (3.4%) Global Status of Korean IT Industry Ireland 1 st (17.1%) Japan 12 th (9.8%) Korea 3 rd (12.8%)

6. KIPA MIC World Market Share of Korean IT Products World market size Billion US $ Market share 1112 6734 637 284 290 577 1123 1870 386 25% 42% 30% 3.5% 1% 2.7% 4% 18% Memory LCD M-phone TV Internet Eq PC Non-Memory Game SW

7. KIPA MIC IT Share of GDP (2003) IT Share of Total Export (2003) 38 % Contribution to Economic Growth (1998~2002) 15.6 % 30 % IT Manufacturing: The Engine of Growth Today

8. KIPA MIC The Engine Getting Old Manufacturing-biased – 3 rd in IT manufacturing, but 21 st in IT Service among OECD Capital-intensive – Capital/labor ratio of IT : 155.2 (non-IT: 99.5) Large Firm-centered – Value-added share of SMEs in IT : 14.5% (non-IT:58.3%)

9. KIPA MIC SW : The Engine of Growth Tomorrow ? Underdeveloped SW Industry in Korea – SW 8.9% in IT Production & 0.5% in IT Export (2003) But Relatively High Market Share of Domestic Firms UKFrance 3.7% GermanyKorea 4.8% 18.4% 18.3% Market Share of Domestic Firms ranked among Top 15 th Source: IDC

10. KIPA MIC Challenges facing the Korean IT Industry Changes in IT paradigm Convergence and Ubiquitous Computing Growing Competition Newcomers to IT hardware manufacturing Moving up and Finding New Opportunities

11. KIPA MIC Converged Services Balance in HW & SW Where We Go from Here – Ubiquitous Korea Data Media Voice Communication Movie Music News Broadcasting VOD Game E-ComE-Com Internet

12. A Trinity of IT Policy Strategies

13. KIPA MIC A Trinity of Policy Strategies Informatizatio n Policy Industry Policy Competition Policy

14. KIPA MIC Informatization Policy : Market Creation Advancing the Information Infrastructure – Korea Information Infrastructure (KII) Utilizing IT for Change – E-Government Bridging the Digital Divide Creating New Demands for IT

15. KIPA MIC Competition Policy : Fair Competition Liberalizing Markets – Opening the Telecommunication Market – Privatization of KT Monitoring Competition – the Regulation by Korea Communications Commission Enhancing the Competitiveness of IT Firms

16. KIPA MIC Industry Policy : Facilitating Market Building Infrastructure for R&D & Education – Supporting cooperation among Industry, Academia and Public Research Institutes Providing Information and directions Revising the Law and Regulation – Transforming the legal system for information society Promoting Entrepreneurship

17. Adam Smith for IT Industry

18. KIPA MIC What Free Trade (ITA) Has Brought to Korea Source: Korea Customs Service IT industry Non-IT industry 17.5 b$ 65 b$ 172.3 b$ 198019902000 55.8 16.6 9.2 51.1 121.2

19. KIPA MIC From Hardware to Software Expansion of free trade to services and intellectual properties Issues concerning monopolistic market power in software and communication industry Promoting free trade based on fair competition and equal opportunities

20. Thank You !!!