- Korea’s ICT Policy & Key Success Factors -

Ministry of Information and CommunicationRepublic of Korea

(www.mic.go.kr)

International Symposium on “Information and CommunicationTechnologies and the Information Society,

9-11 December 2002, Algeria

Chang, K w ang-SooDirector of International Policy Division

CONTENTS

?. Korean Economy Briefs

?. World’s Recognition

? . Korea’s ICT Policy

? . Key Success Factors in ICT Sector

? . Bilateral Cooperation for ICT Development

1

Korean Economy Briefs: Statistics and Facts

Size of Korean Economy(2001)

Population: 47.3 Million

GDP : US$ 422.2 Billion

Per Capita GDP : US$ 8,919

Korean Economy and Trade(2001)

Korean Economy is Driven by International Trade- Export : US$ 150.4 Billion ? 2002(US$ 162.0 Billion)- Import : US$ 141.1 Billion ? 2002(US$ 151.0 Billion)- Trade Surplus : US$ 9.34 Billion ? 2002(US$ 11.0 Billion)

2

Korea in the World Economy

12

13

12

26

0 5 10 15 20 25 30

Rank in the World

Export

Import

GDP

Population

* Comparisons are based on 2001 statistics (Source: Korea National Statistical Office)

3

Economic Growth in Korea

High Economic Growth in four decades.

Five-year Economic Development Plans since 1960s ledto solid growth in four decades

1960(per capita GDP 79US$? 2001(8,919 US$)(113 times)

* Financial crisis(1997) ? Rapidly Recovered in 2000

Critical success factors in rapid economic growthDiligent nationality, presidential leadership, Government-led economyThe establishment of Economic Planning Board & Korea Development Institute

Fostering the heavy and chemicals industry(iron, automobile) 4

“Koreans are the world’s most active and sophisticated Internet users…”

- May 3, 2001, Wall Street Journal

“…there are no proven models for Korea to follow”

- Alvin Toffler, Over the Crisis : A Vision for Korea in the 21st Century

“As one of the most wired countries in today’s world, South Korea is surpassing the United States in broadband penetration.”

- June 7, 2001, CNN

“Korea is a testing area for digital technology and most advanced broadband internet market”

- May, 2002, Financial Times5

6

Korea’s ICT Policy

Building a world-class Information Infrastructure

(155Mbps-5Gbps) by the end of 2000.

10 Million, 70% of the total households are connected to the broadband internet(1st in the world)

< Broadband internet user(% of 100 persons, 2001.12, OECD) >

2.92.24.55.08.417.2

OECDJapanU.S.ASwedenCanadaKorea

7

Korea’s ICT Policy

Realizing “the most computer literate nation” in the world.

Free broadband internet service to all the primary, middleand high schools(10,400)

Broadband internet service to all the rural Areas(universal service)

Satellite internet service to island and hinterland at affordable price

Internet education for all the people(14 million)? 52 personal computers(PCs) per 100 persons

8

Korea’s ICT Policy

Constructing a world – leading nation inmobile Communication

Commercialized CDMA technology for the first time in the world(1996)

? 32.3 million(70% of total population) use mobile phones.

Commercialized 3G mobile communication service (cdma 2000-1x : 144Kbps) for the first time in the world.

? Number of Subscribers : 15 million

Volume of mobile phone export(2001) : 10 billion US$

9

Korea’s ICT Policy

Realizing 11 Key e-government systems(2002.10.30)

About 400 civil petition services at Home ? 4000 civil petition services at Home by the end of 2006Proportion of e-approvals in the government : 94.6%Proportion of e-procurement of the government : 87.5%Proportion of e-trade : 66.6%Proportion of e-stock trading : 70.0%

* 11 Key projects : Government service portal(G4C), Integrated social insurance information system, Home tax service(HTS), E-procurement system, Financial information system, Administrative information system for local govt, Government personnel management information system etc.

10

Korea’s ICT Policy

ICT industry as Engine of Economic Growth

ICT industry is driving force of Korea’s economic growth

- Annual growth rate of ICT sector since 1998 : 22.7%- Share of ICT Industry in GDP(2001) : 12.9%- Contribution rate of ICT to GDP growth(2000) : 50.5%- 26% of total export come from ICT sector.- Trade surplus from ICT sector makes up for deficits

in other sectors.* 2001 total trade surplus : 9.3 billion $, ICT : 10.6 billion $

11

Korea’s ICT Policy

4th in ICT hardware production

- 1st in DRAM production

• World market share: 38%(2000) 41.5%(2001. 6 )

- 2nd in TFT-LCD production• World market share: 42%(2001, 6) 37%(2002, 3)

- 4th in mobile phone production(GSM & CDMA)• World market share: 14%(2001) 20%(2002)• Samsung(3rd in the world), LG(6th in the world)

* CDMA mobile phone world market share : 70 %(2001)

12

Korea’s ICT Policy

Closing domestic & International Digital Divide

Enactment of Digital Divide Law(2000.11)

Establishment of Committee for Bridging the Digital Divide

Establishment of 5-year plan to bridge the digital divide

Invitation of ICT Trainees from developing Countries

(1,200 persons since 1998), dispatch of Internet youth

volunteers(500 persons since 2001), dispatch of ICT

policy advisory team, establishment of internet acces

centers in developing countries.13

Korean ICT indicators (1)

Number of PCs

The number of PCs: 6.3 million (1996) to 24 million (2002.10)

The number of PCs per 100 capita reached 52.0%(2002.10)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

PC

s (1

,000

un

it)

0

10

20

30

40

50

60

pe

r 100 cap

ita

PCs 6,931 8,269 11,530 18,615 21,490 24,370

per 100 capita 15.1 17.8 24.7 39.6 45.7 52.0

1997 1998 1999 2000 2001 2002.10.

14

Korean ICT indicators (2)

Number of Internet UsersThe number of Internet users has shown explosive growth, recording 25.6 million (54.6% penetration rate) at the endof June 2002.

0

5,000

10,000

15,000

20,000

25,000

Inte

rne

t u

sers

(1,

000

un

it)

0

10

20

30

40

50

60

pe

r 100 cap

ita

Internet users 1,634 3,103 10,860 19,040 24,380 25,650

per 100 capita 3.6 6.7 23.3 40.5 51.9 54.6

1997 1998 1999 2000 2001 2002. 6

15

Korean ICT indicators (3)

Subscribers of Broadband Internet Services

The number of subscribers of broadband Internet service reached 10 million, including 5.3 million subscribers to ADSL-based Internet and 3.4 million subscribers to cable modem as of Oct 2002Mainly due to intense competition among service providers & low prices, urban geography and killer applications like VoIP.

1,000 household

0

5,000

10,000

15,000

ADSL 2,074 2,806 3,505 3,946 4,186 5,384

CATV 1,386 1,757 1,953 2,252 2,472 3,449

others 557 532 793 841 866 1,169

Total 4,017 5,095 6,251 7,039 7,524 10,002

Dec 2000 Mar 2001 Jun 2001 Sep 2001 Nov 2001 Oct-02

16

ICT Industry and Trade(1)

116.4

22.7%

63.0

0

40

80

120

’98 ’99 ’00 ’01

Unit: billion($)

20,000

40,000

60,000

80,000

ICT Sectors Production

Unit: billion won

IT Services

Manufacturin

g

S/W & CRS

’98 ’99 ’00 ’01’970

ICT Production

17

ICT Industry and Trade(2)

Share of ICT Industry in GDP

ICT industry’s share in GDP continues to grow, from 9.3%in 1998 to 12.9% in 2001

The growing share suggests that ICT industry is the driverof Korea’s future economic growth

12.9%13.1%

11.2%

9.3%

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

'98 '99 2000 2001

Val

ue A

dded

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Sha

re o

f IT

in G

DP

18

ICT Industry and Trade(3)

Contribution of ICT to GDP growth

ICT industry’s contribution to GDP growth rose from amere 4.5% in 1990 to an astonishing 50.5% in 2000

Falling prices and rising production in ICT industry are main factors for growing importance of ICT sector

4.5 5.912.1 14.1

38.3

50.5

0

10

20

30

40

50

60

%

1990 92 94 96 99 2000 19

20

Key Success Factors

(1) Public Consensus & Presidential leadership

“Late in industrialization, but ahead in Digitalization”* Fixed-line peretration increased from 7.2% in the early

1980s to 50% in 2002.

(2) Establishment of a long-term Strategy & ICTinfrastructure

Korea Information Infrastructure initiative(KII), (Mid 90s), CYBER KOREA 21 & e-Government Initiative(late 90s), e-Korea vision 2006(2002)* These strategies and vision for digitalization win public

faith and support.21

Key Success Factors

(3) Comprehensive & Systematic Implementation Mechanism

Ministry of Information & Communication(1994. 12) Basic Law on Informatization Promotion(1995)Informatization promotion Committee(1996)Informatization strategy council(1998)

(4) Public Information Training to create ICT demand

One million House wives Internet classICT Learning class for the disabledSilver Internet class for the elderlyICT class for prisoners & soldiers

22

Key Success Factors

(5) Establishment of Market Principle through Competition

Deregulation, privatization allows multiple players in the telecom market since mid, 1990s.

3,293total

2,922Value added service provider

338Special service provider

33Facility based service provider

No. of service providerscategory

(June 2002)

23* Number of ICT venture : 4,335

(6) Government measures for the creation of ICT

Certificate for Computer Proficiency given to student. Certification of Cyber ApartmentFinancial Support(loan) for rural area’s ICT Infrastructure Development

(7) Unique Korean Internet Culture

25,000 Internet Cafes(PC Bang) On-line games

Key Success Factors

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25

Bilateral Cooperation for ICT Development

Conclusion of MOU on ICT between Korea & Algeria.

Establishment of ICT cooperation committee between Korea & Algeria

Finding out the ways to cooperate in the ICT sectorBroadband Network, Internet, e-Government, mobile Communication, etc.

Exchange of ICT human resourcesDispatch of Internet youth volunteers & ICT consulting team to AlgeriaInvitation of Alegrian ICT experts to Korea

Transfer of technology in ICT sectorHoldings of annual Symposium & Seminar

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