1. 한국정보사회진흥원 National Information Society Agency Impact of ICT Diffusion in Key Sectors of Korea October 31, 2006 Jeongwon Yoon Director yjw@nia.or.kr Jeongwon Yoon Director yjw@nia.or.kr

2. 1 Contents ICT Diffusion of Korea ICT Diffusion of Korea Ⅰ.Ⅰ.Ⅰ.Ⅰ. Ⅰ.Ⅰ.Ⅰ.Ⅰ. Changes in ICT Environment Changes in ICT Environment Ⅱ.Ⅱ.Ⅱ.Ⅱ. Ⅱ.Ⅱ.Ⅱ.Ⅱ. From e-Society to u-Society From e-Society to u-Society Ⅲ.Ⅲ.Ⅲ.Ⅲ. Ⅲ.Ⅲ.Ⅲ.Ⅲ.

3. 2 Korea’s Journey in ICT Diffusion 1997199819992000200120022003 20042005 22 nd 19 위 14 th 12 th 7 th Cyber Korea 21 (1997) e-Korea Vision 2006 (2002) Broadband IT Korea Vision 2007 (2003) U-Korea 3 rd Internet users 10 mil. (1999) Internet users 10 mil. (1999) PC users 20 mil.(2000) PC users 20 mil.(2000) Internet banking 10 mil. (2001) Internet banking 10 mil. (2001) Korea’s advancement in National Informatization Index (NCA 2005) Broadband internet 10 mil. households (2002) Broadband internet 10 mil. households (2002) Internet users 30 mil.(2004) Internet users 30 mil.(2004) Mobile phones 30 mil. (2002) Mobile phones 30 mil. (2002) E-Commerce volume KRW 300 trillion (2004) E-Commerce volume KRW 300 trillion (2004) 20102006 New social demand and IT environmental change U-Society

4. 3 Milestones in Korea’s ICT Diffusion 2000200520102015 Mobile Phone >Fixed Phone Portable PC >Desktop PC Digital TV >Analog TV Internet Use >TV Watching Wireless Internet >Wired Internet MP3 Market >Music Disc Market 1999 2003 Internet Banking >CD/ATM Use 2004 When New Technology Supersedes Old Technology

5. 4 Internet and Mobile Telecommunications Internet Users (Units of 10,000) 19942002 13.8 96 2,627 Mobile Phone Subscribers (Units of 10,000) 3,234  Annual growth rate of Korea : 72.2%  Annual growth rate of the World : 41.9%(1994  2004) 2005 3,301  Annual growth rate of Korea : 43.9%  Annual growth rate of the World : 41.1%(1994  2004) 3,834

6. 5 Public Administration e-Signing and e-Document Exchange

7. 6 Public Services Usage Rate of Internet-based Public Services

8. 7 ICT Export Leads Korea’s Economic Growth 500 800 % of Total Export ’01 ’02 ’03 ’04 ’05(p) ’06(e) 385 463 575 747 780 883 5 Major Export of Items (’05) *MIC/MOCIE 207.5222.4248300380 Petro- Chemical Machinery Mobile Phones Semi- conductor Car (Units of 100 mil. USD) IT Export (Units of 100 mil. USD) 25.625.6 28.528.5 29.729.7 29.429.4 27.427.428.028.0

9. 8 Key Success Factors Establishment of Ministry of Information and Communication Framework Act on Informatization Promotion Informatization Promotion Fund, etc. Comprehensive and systematic informatization promotion Mapping out of Cyber Korea 21, Broadband IT Korea Vision 2007, etc. Timely establishment of informatization vision and strategy Promotion of TDX, M-DRM, CDMA, ADSL, etc. Advance investment and competition promotion for strategic sector Huge base of tech-savvy users active in early adoption of new technology, Wide penetration of ‘PC rooms’ (cyber cafes) Active expansion of an Information-Hip Culture

10. 9 Changes in ICT Environment Changes in ICT Environment Ⅱ.Ⅱ.Ⅱ.Ⅱ. Ⅱ.Ⅱ.Ⅱ.Ⅱ.

11. 10 Changes in Industrial Structure (1) Game Industry Market Size (unit : KRW trillion) Data for 2005 are estimates (Source : KGDI) Emergence of New Industries Game Industry -Market size: KRW 2.9 trillion (2000) → KRW 5.1 trillion (2005)  More than double the size of music (368.3 billion) and film (1.4 trillion) industries (2003) Internet portal, DB construction, Information processing and operation businesses have emerged S/W Industry -Domestic production: KRW 6.5 trillion (1999) → KRW 19.8trillion (2004) -No. of employees: 62,000 (1999) → 130,000 (2004)

12. 11 Online Financial Activities ’02.06.12.’03.06.12.’04.06.12.’05.06.12. 10 20 30 40 50 0 31.6% 30.1% 28.3% 12.0% CD/ATM internet banking tele- banking Bank windows (unit : %) (unit : \ billion, %) 2001200220032004 real commerce volume(estimates) electronic commerce volume electronic commerce rate 1,552,958 1,834,204 1,653,732 1,741,896 7.7 10.8 13.5 17.1 118,796 178,810 235,025 314,079 (source : Korea National Statistical Office, 2005.) Internet Banking - Internet banking usage rate: 31.6%(Dec.2005) - No. of Internet banking subscribers: 26.74 mil. Internet banking usage rate by banks: 33.2% Online stock trading rate: 65.3%(April.2005) e-Business, e-Commerce - Market size: KRW 55 billion (1998) → KRW 314 trillion (2004) Internet Auction: the largest online marketplace in Korea - Average daily visitors: 1.09 million (March 2004) vs. 0.3 million of Namdaemun Market (2003) Changes in Industrial Structure (2)

13. 12 Changes in Society and Culture Online Cultural Contents(music, movies, etc.) Netizens - internet users : 71.9% (33.88million) - internet users at age 3 ~ 5 : 47.9% - 45% of netizens use instant messenger Online communities - No. of online communities at ‘Daum’ exceeds 5.9 million (2005) - 37.1% of netizens use Blogs(cyworld, etc.) Digital Music Market - market size : KRW 2,550trillion E-sports : 17million digital Offline 2004200520022003 * www.cyworld.com * www.naver.com (unit : age, %) 3456-1920-2930-3940-4950-5960~ 33.5 44.6 64.3 97.8 97.9 91.0 68.7 35.7 11.9

14. 13 From e-Society to u-Society From e-Society to u-Society Ⅲ.Ⅲ.Ⅲ.Ⅲ. Ⅲ.Ⅲ.Ⅲ.Ⅲ.

15. 14 Now, another paradigm shift to ubiquitous Society Environmental Demand Broadband DMB,WiBro Mobile Banking Telematics Digital Home Digitalisation of TV 4G, BcN Intelligent Robot 20072005200620102015 Netizen Ubi-Nomad 1 1

16. 15 Increased demand for reinvigorating economy with IT Source: Bank of Korea, Ministry of Information and Communication 2001200220032004 0 10 20 30 40 23.1 22.6 45.2 48.1 3.87.03.14.7 8.7 17.6 25.3 1.3 IT industry has been the important support for Korean economy in slump - Economic Contribution of IT in Korea: No. 1 in OECD countries (OECD Outlook 2004, December 2004) Real GDP Growth Rate IT Contribution Rate to Real GDP Growth IT Production Increase Rate 2 2 Industrial Demand

17. 16 Increased threat to information security in ubiquitous environment 3 3 Damages by incidents are growing serious with convergence of communication, broadcasting, and internet and diversification of information equipments More Serious Damage Simple information loss, system failure may lead to loss in human lives and property Increased Targets PC mobile phones, information appliances and all other devices Broader Damaged Area Internet BcN Security Demands

18. 17 Concerns about negative aspects of the Information Society 4 4 Issues raised on breaches of personal information, illegal and obscene information, online addiction, etc. ※ Especially, concerns about personal information are increasing and calls to restrict collecting residential ID numbers and destroy information of subscribers cancelling their mobile communication services are also increasing No. of inquiries on breaches of personal information 불법유해정보 시정요구 No. of inquiries on online addiction Source: KISA, KADO, Information Communication Ethics Committee No. of adjustment requests on illegal and obscene information Social Demands

19. 18 u-Korea 2015 u-KOREA establishment (’06~’10) u-KOREA Maturity (’11~’15) Enter top 10 in national competitiveness Achieve national income of USD 30,000 Enter top 20 in quality of citizen life Enter top 15 in national competitiveness Achieve national income of USD 22,000 Enter top 25 in quality of citizen life  Completing ubiquitous network (BcN, USN, etc.)  Technological converging of IT with BT, NT  Improving institutions for ubiquitous society  Launch ubiquitous services (u-logistics and distribution, u-Healthcare, etc.)  Fostering u-industry and new markets  Diffusing ubiquitous service to all sectors of society  World leader in u-industry and market  Embed chips in all objects  Advanced development of convergence technology - IT and BT, NT  Mature ubiquitous culture

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