Tracing 50 Years of Korea’s Electronics Industry Development
Tracing 50 Years of Korea’s Electronics Industry Development
  • Kim Yea-rim
  • 승인 2010.08.23 17:34
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Daeje Chin ,  nicknamed a short-statured Goliath in the IT industry, served as Minister of Information and Communications and has always taken center stage in Korea's IT industry. Korea IT Times interviewed Daeje Chin -- who has been on a roll as an entrepreneur, currently working as President & CEO of SkyLake Incuvest -- to learn about the IT 839 policy, which he designed by himself when he was Minister of Information and Communications.

Daeje Chin, Former Minister of Information and Communications and CEO of  Skylake Incuvest %26amp; Co.
Back In 2003 when President Roh Moo Hyun took office, Daeje Chin served as Minister of Information and Communications. At that time he strongly felt that something fundamental should be done to create new growth engines. After much deliberation, he came up with a well thought-out strategy called "IT 839". He mentioned "I thought there were no other options than discovering driving forces from what Korea was doing well at that time and will do well in the future. The answer was the IT industry."

At that time, IT 839, thrashed out by the Ministry of Information and Communication (MIC), was designed to help Korea set standards a step ahead of others by providing new communications & broadcasting services and to lift Korea to the ranks of developed nations by creating upstream new growth engines. "IT 839" means eight new services, three state-of-the-art infrastructures and nine new growth engines. First, under IT 839, nine new growth engines were chosen. Then, to nurture the nine selected new growth engines, eight services and three infrastructures were seamlessly interwoven.

The following were selected as the eight new services: WiBro(WiMAX), DMB, home network, telematics, RFID, W-COMA, DTV and VoIP (Voice over IP). The three infrastructures included BcN (Broadband convergence Network), u-sensor networks (USN) and next-generation Internet protocol IPv6. The nine new growth engines were next-generation mobile devices, digital TV/broadcasting equipment, home network equipment, IT SoC, next-generation PCs, embedded software, DC (digital contents) & software solutions, telematics equipment and intelligent service robots.

IT 839 can be considered a roadmap for strategically facilitating industrial development without government intervention. Since almost all the value chains of the industries were interconnected vertically or horizontally, the government's job was simply nudging industries into opening their gateways to one another. In other words, the government set frequencies for new communications and broadcasting services and standards to enable interoperability of different services provided by different industries.

 

CEO Daeje Chin  said, "To facilitate the provision of such services, we had to prepare for voices & data convergence, fix-mobile convergence and broadcasting & communications convergence. Thus, the current Internet networks are being replaced with next-generation wide-area communications networks, which are 100 times faster than the current ones. And three infrastructure structures in this category have been found. These service and infrastructures give rise to markets in which nine IT industries, selected as new growth engines, will automatically prosper. During the process, the government can work as a catalyst, not an interventionist force."

IT 839 - which was different from previous development models that solely prompted Korea to play catch-up -- was indeed a groundbreaking policy aimed at helping Korea gain a vantage point in the global IT market. First of all, we need to pay attention to the fact that Korea has successfully obtained the core technologies needed to make a strong presence in the ubiquitous IT market: Korea has become the first nation in the world to develop and standardize WiBro and DMB technology. In addition, through 12 pilot projects and technology development in sectors such as procurement, logistics and defense, the technological foundation for expanding RFID markets was set down in 2005 when 88% of the technological needs were localized. Concurrently, Korea embarked on pilot projects aimed at developing seven intelligent robot prototypes.

Besides, Korea made sure that the adoption of new services, which would lead a virtuous cycle of the IT industry, was proceeded with without delay. In July 2004, Korea put a period to debates on how terrestrial DTV should be transmitted, and launched satellite DMB in May 2005 and terrestrial DMB services in December of the same year. At the end of 2005, the adoption of VoIP was completed, and Korea launched HSDPA (high-speed downlink packet access) and WiBro services in the first half of 2006. What's more, Korea was keen on creating markets for various kinds of convergence services through launching pilot projects on telematics (telecommunications + informatics) and home networks and building an integrated system for traffic information (December, 2005).

Entrenching Korea as a IT powerhouse

Thanks to such efforts, in May of 2005, IMD (International Institute for Management Development) ranked Korea second after the United States in the category of technological infrastructures including IT. Since then, Korea has continued to make a quantum leap; it ranked 27th in 2003, 8th in 2004 and second in 2005.  In November of the same year, the International Telecommunication Union (ITU), a UN agency, ranked Korea 1st in the Digital Opportunity Index (DOI). At that time, the Korean IT industry accounted for 28% of the country's total exports and 15% of GDP, establishing itself as one of the key growth engines.

Along with such economic ramifications, another reason why IT 839 merits due attention is because it sped up the transition from a knowledge-based society to an intelligence-based society. In other words, IT 839 played a pivotal role in taking the knowledge-based society parented by Internet and mobile communications to a whole new level: an intelligence-based society, characterized by digital homes, digital companies and e-government.

In January 2006, then Minister of Information and Communication Daeje Chin delivered a keynote speech on the direction of IT development at the World Economic Forum (WEF), held in Davos, Switzerland, thereby drawing much attention to his ambitious strategy "IT 839". IT 839 was also exported to nations such as Malaysia. Malaysia's IT Minister mentioned, "Because Malaysia's infrastructures are not as good as Korea's and there is no manufacturing base in Malaysia, there is a difference in the number of items. But the concept is the same." Many nations took their cues from IT 839 to craft similar strategies.

Of course, Korea faced a bumpy road on the path to pursuing IT 839. In the process of WiBro development, part of IT 839, Korea received a lot of pressure from the US. As Korea tried to standardize WiBro technology, the US trade delegation strongly protested against it in order to protect its companies. Then, Special Envoy Ambassador Gross even sent angry email. The following is an excerpt from the email.

"MIC is expected to announce a mandatory technical standard that operators must use to provide portable broadband wireless internet services. This would, in effect, exclude certain U.S. technologies from the Korean market. I am disturbed that such an announcement would be made in light of our resolution in April of an important, long-standing telecommunications issue (the Wireless Internet Platform for Interoperability or "WIPI") related to standard setting in the Korean cellular phone services market"

 

Korea successfully persuades the US and succeeds in WiBro standardization.

However, in the face of strong US opposition, then Minister of Information and Communication Daeje Chin  continued to press on with WiBro standardization and finally succeeded. With the launch of IT 839 in 2004, WiBro services entered the commercialization stage, prompting Korea to shift its focus to expansion of services and market revitalization from technology development and pilot projects. In other words, Korea started to put a high premium on policies related to software and IT parts and materials, and created a "blue ocean" by promoting convergence of communications and broadcasting and industrial convergence.

As time went by, a slew of strategies patterned on IT 839 emerged continuously. As such, IT 839 served as a milestone IT policy that greatly helped transform Korea into an IT powerhouse. It is fair to say that IT 839 exerted the biggest impact on Korea's IT history.

 

Full Series Schedule

July 2009: an overview
August 2009: The electronics industry is born
September 2009: Electronics industry gains momentum
October 2009: Color TV production opens a new vista
November 2009: Radios, cassettesand electronic watches change lifestyle
December 2009: The personal computer arrives
January 2010: TDX1 introduced into the local network
February 2010: TFT LCD allows determination of film thickness
March 2010: CDMA comes into commercial use
April 2010: U-technologies (part 1)
June 2010: U-technologies (part 2)
July 2010 : WiMAX opens 

August 2010 : IT 839 Strategy Lays the Groundwork for ICT Market
September 2010 : Era of IPTV


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