How Korean Software Companies use Yanbian as a Path to the Chinese Market
How Korean Software Companies use Yanbian as a Path to the Chinese Market
  • Lee Young-sang (
  • 승인 2011.09.25 20:36
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Lee Young-sang Chairman of the Korea Software Enterprise Association and CEO of DataStreams Corp.

On August 28th, I was heading for Incheon International Airport to join the Yanbian IT Forum, which is held as a peripheral event of the Yenji-Jijang International Fair for investment and trade. My main purpose of visit was mainly business, but it was more than that in some uncertain aspects. Yanbian is the place where quite a few Korean people have relatives, or their grandparents' memories linger. Many Koreans had moved to there to escape from Japanese imperial aggression in the early 20th century. Also, Yenji is an important city for the Mt. Baekdoo (Changbai) tour. Mt. Baekdoo is sacred and worshiped as the origin of the Korean race.

China deeply understands the importance of the software industry. They know their people have a great mentality as a result of long history which is indispensable for software development. More than 50 software parks have been established since late 1990, spurred by India's success in this industry. Many provinces and cities offer good conditions for investment in their software parks. Due to the abundance of skilled people and government support, China must be able to rapidly catch up to their competitors in this field. It also means growing the software market for foreign software companies.


Korean software companies have been very successful in a couple of decades through the era of the Internet burst, which triggered large-scale investment in information systems such as next-generation banking systems, e-government systems, and many other public and civil computer systems. Korean information systems were built on the big bang methodology because so many business requirements and rapid evolution of technology were rushed in a very short time. These days, Korean information system standards are very high and technology is advanced. Many Korean software products were developed during these times, too. Some of them have a very high possibility of success worldwide if properly prepared. Nevertheless, the package software market in Korea is too small. It is less than 1% of the world market. This is the drawback of the Korean software industry. SI conglomerates such as Samsung SDS and LG CNS who have also been successful in the domestic market during expansion years tried to export their experiences, but this trial has not yet helped in expanding the Korean software product market. Chief executives of Korean software companies know that it is the right time to go out.

When I met people in Yanbian, they wanted to use Korean software power as a momentum for economic growth. It is good thinking for them to choose, because they feel difficulty to compete against other big cities in China. Their IT graduates slip away from their hometown for better salaries and positions. Some software and game companies from Korea already opened their offices, hiring hundreds of young people, but they cannot keep them when they recognize that it is the limit of their development. They need more than outsourcing or cheap labor. In this vacant place, Korean software companies can fill up with technology upgrades as the next step of investment. Yanbian can be useful for software testing and localization for the Chinese market considering there was no language barrier. For the worldwide market, software testing is critical and very expensive for small and medium-sized companies. Testing can be done in parallel with localization. If everything is on the way, the development for customization also can be done as the next step. When it is successful, it can affect the economic development plan of Jilin Province who suffers from similar phenomena. It's plan also includes a software complex in Changchun city. With the support of Jilin Province in the way of investment, markets and policies such as Korean language education and the experiences of Korean software companies can be a great help in the success of the grand economic plan of northeast China.

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