In order to continuously strengthen the nation's information and telecommunications (IT) industry, and thereby play a leading role in the development of IT industries around the world, the Ministry of Information and Communication has prepared a carefully designed plan called the 'IT839' project.
Under the project, new telecom services will be launched and foreign investment will be attracted to build network infrastructure related to wire and wireless telecommunications, broadcasting and Internet services. By doing so, the government hopes that through synergy effects, Korea can develop cutting-edge IT devices, software and digital contents, and lay the groundwork for achieving a national per capita income of US$20,000.
To meet this goal, the International Cooperation Agency for Korea IT (ICA) actively pursues various programs intended to assist Korean IT companies seeking business opportunities in foreign markets.
In 2004, the cooperative relationship between the government and private enterprises in the telecommunications sector is expected to bring about an increase in IT exports to US $75 billion from the original target of US $70 billion. By expanding such assistance programs, ICA is determined to play a leading role in raising IT exports to US $100 billion by 2007.
To support promising Korean IT companies in making inroads into overseas markets, ICA has organized and dispatched a number of 'Best IT Korea' delegations. A total of seventy companies were dispatched to nine countries in emerging markets while representatives of forty-one companies were dispatched to seven industrialized nations, resulting in the signing of contracts for IT exports worth US$18.57 million, a 195% increase from 2003.
In the case of providing assistance to IT companies for their participation in various exhibitions overseas, ICA created uniform standards in 2004 for their application in different stages of the project, from the selection of companies to their post management. Before ICA took up the role as an overseer of exhibition assistance programs, a host of agencies were involved, thus greatly reducing their efficiency.
By systematically operating Korean IT exhibition halls, and thus enhancing Korea's image as 'Broadband IT Korea,' ICA provided assistance to over 200 companies whose participation in 17 exhibitions around the world has earned them export contracts totaling US$46 million.
Starting with a Korea IT investment road show in Hong Kong in 2003, ICA held similar events in New York and Boston in 2004. Ahead of President Roh Moo-hyun's recent state visit to European countries, ICA held a Korea-France IT business forum in Paris, France, explaining to government and business leaders there the benefits of investing in Korea in the telecommunications sector.
In addition, ICA has published a brochure that provides relevant information about investment opportunities in the domestic IT market, and assembled a database on more than 6,000 industry and government leaders as well as professionals working at various institutions and research centers.
Thanks to active promotion of investor relations, along with successful advancement overseas by promising Korean IT companies, Korea's status in IT markets is widely known. Likewise, ICA plans to actively engage in diverse promotional activities such as IT biz forums and road shows to attract foreign investment and globally prominent R&D centers through the expansion of incentives such as financial and tax benefits.
IT Industry Grows by Leaps & Bounds
During the first nine months of 2004 the gross domestic output by IT industries amounted to 175 trillion won, an increase of 20 percent from the same period last year. Of this amount, the production of information and telecom devices accounted 131.7 trillion won, an increase of 26 percent. Of the information and telecom products, semiconductor parts posted a 33 percent increase while telecom devices showed a 25 percent rise in production. In addition, broadcasting equipment and information devices showed increases of 12 and 8 percent respectively. In general, the production of IT devices progressed smoothly with a relative weakness shown in information devices whose product line up includes desktop PCs.
In the domestic IT market, the overall market size reached 147 trillion won with IT products taking the lion's share totaling 103 trillion won, whereas IT services accounted about 31 trillion won, followed by software and computer related services reaching 12 trillion won in output.
The domestic market has also witnessed a rapid growth in demand for IT devices, with an increase of 18 percent from the same period in the preceding year, followed by IT services market with a 10 percent increase. However, the domestic revenue in software and computer-related services declined by 8 percent.
In the IT devices market, the production of semiconductors and other IT parts showed the largest gain with a 26-percent increase, while IT products and information devices increased by 3 and 4 percent respectively.
When the production amount and domestic market size are compared, over two-thirds of an increase in part production was absorbed by the domestic market while most of the gains made in telecom devices was channeled through to overseas markets.
Making Inroads with the BRICs
It is a well known fact that the economic survival of Korea largely depends on the creation of wealth through trade. Accordingly, the government is laying down plans to help domestic IT companies make inroads into the so-called BRICs, namely Brazil, Russia, India and China, that are fast emerging as new markets.
Despite the fact these countries account for 43 percent of the world's population and 29 percent of its land mass, BRICs are responsible for generating only 8 percent of the world's total gross domestic product. Nonetheless, their potential for future growth is considered to be very high, their IT markets expanding by 10 percent every year.
Against such a backdrop, ICA has assumed a role in enhancing the national image of 'IT Korea' with these countries in mind. To achieve this goal, ICA will be engaging in various programs including seminars, industrial tours, and printing of PR materials on issues of mutual concern for future cooperation.
-KH Lee (email@example.com)-
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