The CeBIT 2007 exhibition this time is being co-managed by three organizations -- the Daegu Digital Industry Promotion Agency (DIP), Daegu Technopark, and the Gumi Digital Electronics Industry Promotion Foundation (GDEP). They have been supporting a total of 9 IT companies.
In the case of regional companies, even if their technologies are extraordinary and they possess new products, the level of awareness about them and their overseas marketing capabilities cannot be compared to large companies. Hence, three organizations in Daegu and Gyeongsangbuk Province have gotten together, have selected 9 promising companies, and have been intensively supporting them.
Especially, in the case of CeBIT 2007, IT enterprises and organizations in the Daegu and Gyeongsangbuk regions will be participating and have been showing that the city and the province can join together when it comes to exports and regional development. The Korea IT Times had an interview with Park Kwang-jin, CEO of the Daegu Digital Industry Promotion Agency.
Q. What are the trends of the Daegu IT market and the merits of inducing foreign investment
A. In Daegu, the IT industry has become yet another dynamic force behind growth. Now, there are more people who think of the Daegu Seongseo Industrial Complex and the Gumi Industrial Complex than there are people who think of textiles and apples when they think of Daegu. Daegu has been actively fostering and supporting the IT industry in order to make the city a central city in the southeastern region of Korea.
For example, the Daegu International Embedded Conference, which is held every year, has been overwhelmingly surpassing other similar embedded-related events in Korea in terms of both size and quality. At this event, the latest advanced technologies and trends of both Korea and foreign countries have been provided to regional companies. If you would like to know accurately about the trends of the IT market of Daegu, I recommend that you visit the 2007 Daegu international embedded event.
The Daegu area has been showing more strong points in the software-related service field than other regions. In the case of the software industry, new technology development is the source of competitiveness. Hence, Daegu's IT companies have been concentrating on this field. Especially, the amount of production of software-related industries has been reaching 1.15 trillion won (US$1.23 billion). And it is forecast that the growth will continue in the future. Also, the mobile-related software industry and the industry of digital content for mobile use are in the growth phase.
In addition, Daegu City has been providing a lot of support to foreign companies investing in the city. In the case of large scale foreign investment, the lease fee is 100% exempted. And various kinds of tax incentives have been provided. In the cases of businesses accompanying a high level of technology and companies investing large scale, the corporate tax, income tax, and reparation income tax are 100% exempted for five years. Other than these, the city has been providing many kinds of administrative support, subsidy support for employment education, and training. It has been providing support that is not any worse than other free investment and trade areas.
Q. What is the present situation and orientation of the globalization and the pioneering of the European market for startup IT companies in the Daegu area
A. Globalization is a topic of conversation for all companies. Especially, it is an issue for the survival of regional startup IT companies. The domestic consumption market is in a state in which it has lost its vigor due to prolonged economic recession. It has reached the condition of saturation. Therefore, the difficulties are increasing the more time goes by. Hence, it is a matter of course that the eye is turned toward overseas markets. Regional organizations have been researching and analyzing overseas markets, excavating the demand that fits the market, and providing active support. Especially, the expectation has been formed that, once the free trade agreement (FTA) with the United States is concluded, the exports of IT products to the American region will increase.
Also, in Southeast Asian markets the consumption of Korean IT products -- which are of the highest standard in the world -- has been continuing to increase. The support has been steadily provided to analyze the markets in this region and participate in exhibitions in this region.
The difference between the European market and the market in other regions is that the consumers in this region focus on the technology and convenience of the product rather than the degree of the preference for the product brand. The European market is different from the Korean market and most other overseas markets in which the level of trust in global large-scale brands is absolute. Hence, even startup enterprises can enter the European market only once their technology is recognized.
This is one of the reasons why we have high expectations regarding the entry into the European market. Also, the already advanced Western European market is a very advantageous area for Korean companies to enter, because it continues to have many new products. The infrastructure of the Eastern European region is not yet mature. It is predicted that the region will develop. As the level of IT development in this region is one level lower than that of Korea, companies have been able to enter the market by localizing and supplementing products even if they have not been produced with the latest technologies. Little bits of visible results have been appearing in many areas recently.
Q. What are the details of the invigoration of the IT industry of Daegu, and what is the level of contribution of the industry in the regional economy
A. As earlier stated, the IT industry has been a motive power for the industrial development of the Daegu area. The total amount of production of Daegu's IT companies in 2002 was 1.43 trillion won (US$1.53 billion), capturing 6.1% of the total amount of production of the region in that year. In 2004, it was 2.5 trillion won (US$2.67 billion), capturing 9.6% of the total amount of regional production in the same year. I am convinced that the rapid growth of the Daegu IT industry will take place in the next two years.
