The following is the first in a six-part series of articles on "Blue Ocean of Digital Hallyu (the Korean Wave)" contributed by Cho Yong-jun, Executive Director, Division of Public Relations & Project of the Korea Agency for Digital Opportunities and Promotion (KADO). -- ED. In its May 15, 2005 edition, Iran's English newspaper, Iran Daily, reported in its economics section that the first Iranian-made computer had made its debut. In the article, a high-ranking official commented, "In its initial stage, about 2,000 computers will be made. However, I hope that a massive production of the 'Persian Computer' will be possible in the near future." By contrast, the first "Made in Korea" computer, an 8-bit computer, was produced by Sambo Computer 25 years ago, back in January 1981. In October of the same year, Sambo Computer started exporting computers (to Canada) for the first time in the history of the domestic computer industry. Of course, even today most countries cannot or do not manufacture computers. Countries in the Middle East may not have to make computers as they can live wealthily without, thanks to their enormous amounts of oil dollars. However, the situation facing South Korea is totally different. In 2004, exports accounted for 37 percent of the nation's gross domestic product (GDP). The nation's external dependency ratio also exceeded 70 percent based on the US dollar. In a nutshell, the Korean people cannot live comfortably if they do not manufacture and sell something hard. In addition, its external dependency ratio, which sensitively responds to the fluctuation of foreign exchange rates, global business, oil price and the North Korean nuclear issue, is very high. Considering this, we cannot help looking enviously at Iran, which ranked second in the world in terms of both crude oil reserves (126 billion barrels) and gas reserves (26.6 trillion cubic meters). If Iran did not close its doors to the world due to the 1979 Islamic Revolution and rather invested its rich supply of oil dollars into the information, communication and technology (ICT) sector, its status might have been sharply different today. However, the reality is that the per capita GDP of Iran was a mere $1,651 in 2003, compared with Korea's $10,000 plus, despite its huge reserves of crude oil and gas. In Iran, oil accounted for 80 percent of its total exports. The remaining 20 percent comprises carpets, and agricultural and fishery products. In particular, its exports of fruit ranked 8th in the world. As Korea has no natural mineral resources like Iran, the nation had to pay keen attention to produce something innovative. In the 21st century, as a result, Korea has been advancing toward the intelligent information society after passing through the knowledge information society, but Iran has barely entered the initial stage of informatization. Delivering a speech at the opening ceremony for the 2005 World ICT Summit held on May 19 this year, former U.S. Vice President Al Gore said, "The digital revolution rising in Korea has reached an alarming level. From a historical viewpoint, the world is receiving great help from Korea for the second time, following its introduction of the type printing technology centuries ago." He added, "Korea has played a very important role in the digital revolution, including convergence of BT/NT and reform of core technology for the future growth of the IT-based new industry. It will play a great role in creating a better living environment for humankind." Korea has now achieved the second position in the world in terms of IT infrastructure, outpacing the United States. The International Telecommunication Union (ITU) recently appraised, "The development Korea has achieved in the information and communication sector for the past 40 years was a 'miracle.' Nothing can be recommended anymore for the country." However, the fact that Korea ranked first in the world in the broadband highspeed Internet supply ratio and 70 percent of the Korean people use the Internet is not our final target. According to a recent announcement by the Swiss-based IMD, the national competitiveness of Korea ranked only 29th in the world, although it secured the second position in IT infrastructure. IT infrastructure is a foundation and a APEC 2005 / IT Korea basis. Although many foreigners praise Korea's IT infrastructure highly, some make cynical remarks like, "So what" The IT infrastructure is a means and tool for attaining other targets. Then, what should we do with the IT infrastructure boasting the world's second position It goes without saying that we should enhance the national competitiveness of Korea, which fell behind Taiwan and Thailand, and make Korea an advanced country with per capita gross national income (GNI) of $20,000. About 10 years have passed since Korea celebrated the $10,000 era of per capita GNI. Considering the fact that most advanced countries succeeded in entering the $20,000 mark several years after they broke the $10,000 level, Korea is lagging behind. To advance into the $20,000 era by around 2007, Korea should attain such conditions as an annual average export growth rate of 10 percent, real economic growth rate of a 5~6 percent level, the won's appreciation of a 3-5 percent level, an inflation rate for consumer prices of a 3 percent level, and a population increase rate of less than 1 percent. All but the population increase rate are difficult conditions to attain. Many economists predict that it will be difficult for Korea to achieve an economic growth of 4 percent this year. The Korea Chamber of Commerce and Industry (KCCI) forecasts that Korea will attain the $20,000 era only by 2019 if the low economic growth rate of a 3 percent level continues. However, the Korea International Trade Association (KITA) also predicts that Korea can attain the $20,000 era in 2010 if it increases exports by 11 percent every year. Then, how to do to achieve the $20,000 era at an early date under these difficult circumstances We have no option but to discover the answer from what we are now doing very well and what we can do better in the future. Our technology in shipbuilding, automobiles and bioengineering, led by stem cell research of Seoul National University Prof. Hwang Woo-suck, is very important. However, more important fields are digital (information and communication) technology, products and services. The contribution of the IT industry to the Korean economy has been on a steady rise, with the IT industry now accounting for 15 percent of total domestic production and 40 percent of exports. From the viewpoint of the recent bestseller, "Blue Ocean Strategy," the development of the IT industry is a shortcut to attaining the $20,000 era. "Blue Ocean" refers to new opportunities and new markets existing before enterprises. "Red Ocean," an opposite concept to Blue Ocean, signifies the already existing market where competitors and competition rules have been set. In "Red Ocean," only those winning in fierce competition can survive. From this viewpoint, we can create Korea's IT/NT/BT Blue Ocean Markets. However, the fastest way to achieve the $20,000 era lies in IT. The authors of the book also cited mobile phone SGH-T 100 and 40- inch LCD TV, both of which boast the best sales record in the world, as successful cases. However, one thing we have to pay keen attention to is the fact that we should not discard Red Ocean and pursue only Blue Ocean. The authors also stressed, "As Blue Ocean and Red Ocean coexist, enterprises are required to map out strategies for success in the two oceans simultaneously." To retain competitiveness in the Red Ocean and find out something new in the Blue Ocean, we should persistently push for higher value-added in digital technology, products and services. Related to this, I'd like to introduce the concept of "Digital Hallyu, the Korean (cultural) wave that is sweeping through Asia. With this new concept and paradigm of Digital Hallyu, we should enhance the competitiveness of the nation's IT industry and accelerate convergence of industry and culture to make Korea an advanced country at the earliest date possible. This will be the main theme of this series of articles.