한국정보사회진흥원NationalInformation SocietyAgency

Impact of ICT Diffusion in Impact of ICT Diffusion in Key Sectors of KoreaKey Sectors of Korea

Impact of ICT Diffusion in Impact of ICT Diffusion in Key Sectors of KoreaKey Sectors of Korea

October 31, 2006 October 31, 2006

Jeongwon Yoon

Director

yjw@nia.or.kr

Jeongwon Yoon

Director

yjw@nia.or.kr

2

Contents

ICT Diffusion of KoreaICT Diffusion of Korea ICT Diffusion of KoreaICT Diffusion of KoreaⅠⅠ..ⅠⅠ..

Changes in ICT EnvironmentChanges in ICT Environment Changes in ICT EnvironmentChanges in ICT EnvironmentⅡⅡ..ⅡⅡ..

From e-Society to u-SocietyFrom e-Society to u-Society From e-Society to u-SocietyFrom e-Society to u-SocietyⅢⅢ ..ⅢⅢ ..

3

Korea’s Journey in ICT Diffusion

1997 1998 1999 2000 2001 2002 2003 2004 2005

22nd 22nd

19위

14th 14th

12th

7th

Cyber Korea 21(1997)

e-Korea Vision 2006(2002)

Broadband IT KoreaVision 2007

(2003)

U-KoreaU-Korea

3rd

Internet users 10 mil. (1999)

Internet users 10 mil. (1999)

PC users 20 mil.(2000)

PC users 20 mil.(2000)

Internet banking10 mil. (2001)

Internet banking10 mil. (2001)

Korea’s advancement in National Informatization Index (NCA 2005)

Broadband internet10 mil. households

(2002)

Broadband internet10 mil. households

(2002)

Internet users30 mil.(2004)

Internet users30 mil.(2004)

Mobile phones30 mil. (2002)

Mobile phones30 mil. (2002)

E-Commerce volumeKRW 300 trillion (2004)

E-Commerce volumeKRW 300 trillion (2004)

20102006

New social demand and IT environmental change

U-Society

4

Milestones in Korea’s ICT Diffusion

2000 2005 2010 2015

Mobile Phone>Fixed PhoneMobile Phone>Fixed Phone

Portable PC>Desktop PCPortable PC>Desktop PC

Digital TV>Analog TVDigital TV

>Analog TV

Internet Use>TV WatchingInternet Use

>TV Watching

Wireless Internet>Wired Internet

Wireless Internet>Wired Internet

MP3 Market>Music Disc Market

MP3 Market>Music Disc Market

1999

2003

Internet Banking>CD/ATM Use

Internet Banking>CD/ATM Use

2004

When New Technology Supersedes Old TechnologyWhen New Technology Supersedes Old Technology

5

Internet and Mobile Telecommunications

Internet UsersInternet Users(Units of 10,000)

19941994 20022002

13.8

96

2,627

Mobile PhoneMobile PhoneSubscribersSubscribers

(Units of 10,000)

3,234

Annual growth rate of Korea : 72.2%

Annual growth rate of the World : 41.9%(1994 2004)

20052005

3,301

Annual growth rate of Korea : 43.9%

Annual growth rate of the World: 41.1%(1994 2004)

3,834

6

Public Administration

e-Signing and e-Document Exchange

7

Public Services

Usage Rate of Internet-based Public Services

8

ICT Export Leads Korea’s Economic Growth

500500

800800 % of Total Export% of Total Export

’01’01 ’02’02 ’03’03 ’04’04 ’05(p)’05(p) ’06(e)’06(e)

385385463463

575575

747747

780780

883883

5 Major Export of Items (’05)

*MIC/MOCIE

207.5222.4248300380

Petro-ChemicalMachineryMobilePhones

Semi-conductor

Car

(Units of 100 mil. USD)

IT Export (Units of 100 mil. USD)

25.625.625.625.6

28.528.528.528.529.729.729.729.7 29.429.429.429.4

27.427.427.427.4 28.028.028.028.0

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Key Success Factors

Establishment of Ministry of Information and Communication

Framework Act on Informatization Promotion

Informatization Promotion Fund, etc.

Comprehensive and systematic informatization promotionComprehensive and systematic informatization promotion

Mapping out of Cyber Korea 21, Broadband IT Korea Vision 2007, etc.

Timely establishment of informatization vision and strategyTimely establishment of informatization vision and strategy

Promotion of TDX, M-DRM, CDMA, ADSL, etc.

Advance investment and competition promotion for strategic sectorAdvance investment and competition promotion for strategic sector

Huge base of tech-savvy users active in early adoption of new technology,

Wide penetration of ‘PC rooms’ (cyber cafes)

Active expansion of an Information-Hip CultureActive expansion of an Information-Hip Culture

10

Changes in ICT EnvironmentChanges in ICT Environment Changes in ICT EnvironmentChanges in ICT EnvironmentⅡⅡ..ⅡⅡ..

11

Changes in Industrial Structure (1)

Game Industry Market SizeGame Industry Market Size

(unit : KRW trillion)(unit : KRW trillion)

Data for 2005Data for 2005are estimatesare estimates

(Source : KGDI)(Source : KGDI)

Emergence of New IndustriesEmergence of New IndustriesEmergence of New IndustriesEmergence of New Industries

Game Industry - Market size: KRW 2.9 trillion (2000) → KRW 5.1 trillion (2005) More than double the size of music (368.3 billion) and film (1.4 trillion) industries (2003)

Internet portal, DB construction, Information processing and operation businesses have emerged

S/W Industry- Domestic production: KRW 6.5 trillion (1999) → KRW 19.8trillion (2004)

- No. of employees: 62,000 (1999) → 130,000 (2004)

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Online Financial ActivitiesOnline Financial ActivitiesOnline Financial ActivitiesOnline Financial Activities

’02.06. 12. ’03.06. 12. ’04.06. 12. ’05.06. 12.

10

20

30

40

50

0

31.6%30.1%28.3%

12.0%

CD/ATMinternet banking tele-

banking

Bankwindows

(unit : %)

< internet banking transition >< internet banking transition >

(unit : \ billion, %)

2001 2002 2003 2004

real commerce volume(estimates)electronic commerce volume electronic commerce rate

1,552,958

1,834,2041,653,732 1,741,896

7.710.8 13.5

17.1

118,796178,810

235,025314,079

< electronic commerce market size >< electronic commerce market size >

(source : Korea National Statistical Office, 2005.)

Internet Banking

- Internet banking usage rate: 31.6%(Dec.2005)

- No. of Internet banking subscribers: 26.74 mil.

Internet banking usage rate by banks: 33.2%

Online stock trading rate: 65.3%(April.2005)

e-Business, e-Commerce

- Market size: KRW 55 billion (1998) → KRW 314 trillion (2004)

Internet Auction: the largest online marketplace in Korea

- Average daily visitors: 1.09 million (March 2004) vs. 0.3 million of Namdaemun Market (2003)

Changes in Industrial Structure (2)

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Changes in Society and Culture

Online Cultural Contents(music, movies, etc.)Online Cultural Contents(music, movies, etc.)Online Cultural Contents(music, movies, etc.)Online Cultural Contents(music, movies, etc.)

Netizens

- internet users : 71.9% (33.88million)

- internet users at age 3 ~ 5 : 47.9%

- 45% of netizens use instant messenger

Online communities

- No. of online communities at ‘Daum’ exceeds

5.9 million (2005)

- 37.1% of netizens use Blogs(cyworld, etc.)

Digital Music Market

- market size : KRW 2,550trillion

E-sports : 17million

< on-offline music market >< on-offline music market >

digitalOffline

2004 20052002 2003

< Blog : Web + log >< Blog : Web + log >* www.cyworld.com * www.naver.com

< internet users(2005) >< internet users(2005) >(unit : age, %)

3 4 5 6-19 20-29 30-39 40-49 50-59 60~

33.544.6

64.3

97.8 97.9 91.0

68.7

35.7

11.9

14

From e-Society to u-SocietyFrom e-Society to u-Society From e-Society to u-SocietyFrom e-Society to u-SocietyⅢⅢ ..ⅢⅢ ..

15

Now, another paradigm shift to ubiquitous Society

Environmental Demand

Broadband

DMB,WiBro

Mobile BankingTelematics

Digital Home

Digitalisation of TV

4G, BcN

Intelligent Robot

20072005 2006 2010 2015

Netizen

Ubi-Nomad

11

16

Increased demand for reinvigorating economy with IT

Source: Bank of Korea, Ministry of Information and Communication

2001 2002 2003 2004

0

10

20

30

40

23.1

22.6

45.2

48.1

3.8 7.0 3.1 4.7

8.7

17.625.3

1.3

IT industry has been the important support for Korean economy in slump- Economic Contribution of IT in Korea: No. 1 in OECD countries

(OECD Outlook 2004, December 2004)

Real GDP Growth RateIT Contribution Rate to Real GDP GrowthIT Production Increase Rate

22

Industrial Demand

17

Increased threat to information security in ubiquitous environment33

Damages by incidents are growing serious with convergence of communication, broadcasting, and internet and diversification of information equipments

More Serious Damage

Simple information loss, system failure may lead to loss in human lives and property

Increased Targets

PC mobile phones, information appliances and all other devices

Broader Damaged Area

Internet BcN

Security Demands

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Concerns about negative aspects of the Information Society44

Issues raised on breaches of personal information, illegal and obscene information, online addiction, etc.

※ Especially, concerns about personal information are increasing and calls to restrict collecting residential ID numbers and destroy information of subscribers cancelling their mobile communication services are also increasing

No. of inquiries on breaches of personal information

불법유해정보 시정요구No. of inquiries on

online addiction

Source: KISA, KADO, Information Communication Ethics Committee

No. of adjustment requests on illegal

and obscene information

Social Demands

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u-Korea 2015

u-KOREA establishment (’06~’10)u-KOREA establishment (’06~’10) u-KOREA Maturity (’11~’15)u-KOREA Maturity (’11~’15)

• Enter top 10 in national competitiveness

• Achieve national income of USD 30,000

• Enter top 20 in quality of citizen life

• Enter top 15 in national competitiveness

• Achieve national income of USD 22,000

• Enter top 25 in quality of citizen life

Completing ubiquitous network (BcN, USN, etc.)

Technological converging of IT with BT, NT

Improving institutions for ubiquitous society

Launch ubiquitous services (u-logistics and distribution, u-Healthcare, etc.)

Fostering u-industry and new markets

Diffusing ubiquitous service to all sectors of society

World leader in u-industry and market

Embed chips in all objects

Advanced development of convergence technology - IT and BT, NT

Mature ubiquitous culture

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