Korea's IT Exports Continue Their Year-on-Year Surge

The volume of Korea's information technology exports continued to increase, year-on-year, in August.   As reported by the Joongang Daily, exports last month were 26.4 percent higher than August of last year at $13.4 billion.
The increase was mainly due to exports of semiconductors and display panels. Shipments of semiconductors increased 64.9 percent to a record $4.7 billion, mainly led by the improved memory chip industry. Exports of display panels also jumped 25.4 percent to $3.2 billion as product demand was high, especially in China, Hong Kong and the European Union.
Meanwhile, the export of cell phones decreased 18.4 percent in August to $1.8 billion, due to a drop in export unit costs, increased overseas production and low demand for ordinary cell phones. Though smartphones are gaining popularity worldwide, local manufacturers started releasing devices relatively recently.
So, Korea remains an IT export powerhouse for the time being, but the decrease in mobile handset exports is clearly an important indicator of developments in the global marketplace and Korea's place in it.

North Korea's Software Industry

Although the digital divide between North and South Korea may be the largest in the world by many measures.  However, as with most generalizations, there are exceptions to the rule.  In the case of North Korea, one of these may be found, somewhat surprisingly, in the are of software and programming.  Bloomberg reports that programmers for North Korea's General Federation of Science and Technology developed a 2007 mobile phone bowling game based on the 1998 film "The Big Lebowski," starring Jeff Bridges, as well as "Men in Black: Alien Assault."
North Korea's growing software industry is championed by Kim Jong Il and contracting with North Korean companies is legal under United Nations sanctions unless they are linked to the arms trade.  Volker Eloesser, a founder of Pyongyang-based Nosotek, notes that the technological education of graduates from North Korean universities has become significantly better.  North Korea’s information technology push began in the 1980s as the government sought to bolster the faltering economy.
Today Nosotek advertises itself as "the first western IT venture in DPRK (North Korea).  Its web site expands upon this as follows:

• In DPRK, software engineers are selected from the mathematics elite and learn programming from the ground-up, such as assembler to C#, but also Linux kernel and Visual Basic macros. 
• Among them, Nosotek has attracted the cream of local talent as the only company in Pyongyang offering western working conditions and Internet access. 
• In addition to the accessible skill level Nosotek was set-up in DPRK because IP secrecy and minimum employee churn rate are structurally guaranteed.< Nosotek sells direct access to its 50+ programmers jointly managed by western and local managers. 
• Services can be invoiced through a Hong Kong or Chinese company. 
• Benefit from North Korea's opening, outsource to Nosotek.

From the government's point of view, the activities of such companies as Nosotek is no doubt appreciated since they generate foreign exchange.  However, as noted by Andrei Lankov, a North Korean expert based in Seoul, "These activities help to fund the regime, but at the same time they bring knowledge of the outside world to people who could affect change."  The dilemma facing North Korea, a subject of earlier posts (and also this one), seems to be growing and not diminishing.

Korea's Response to Google and Apple

To readers of this blog, please know that I'm still alive and well.  It is just that I've been a bit busy with other things at work and at home and have not been able to post much in the last several weeks.  However, I have been following the press and the trade publications that cover South Korea's IT sector and cannot help but comment on the overall response to the popularity, worldwide and in Korea, of products being sold by Google and Apple.
Today, for example, The Korea Times carried a report that LG was about to unveil the "1st Smart TV."  This would be a television set equipped with "Netcast 2.0" for web-connected televisions.  This move by LG was clearly a response to moves by Apple and Google, along with its Korean arch-rival Samsung.
The situation is somewhat similar with smart-phones and notepad sized devices.  Samsung and LG are scrambling to come out with their own devices that might compete with Apple's iPhone and Android-based digital devices.
What is the common denominator in all of the reports I'm reading? It is simply that South Korea is still heavily reliant on the manufacture of communications hardware, rather than content or software.  It is the latter that not only makes up the bulk of the global ICT market, but also represents the major hurdle for Korea to continue its remarkable advance as an "IT Powerhouse" or a knowledge economy.  The transition to greater emphasis on software and content in Korea has begun, but it will be a long-term challenge for the country to succeed.  This challenge will be the subject of future posts.

North Korea using Twitter and YouTube

The New York Times carried an interesting article today on how North Korea is using Twitter and YouTube to bolster its propaganda efforts.  During the last month, a series of video clips have been posted to YouTube, brimming with vitriol and satire against leaders in South Korea or in the U.S.  During the past week, North Korea also began operating a Twitter account under the name uriminzok or "our nation."
A spokesman for the National Unification Ministry in Seoul said “It is clear that these accounts carry the same propaganda as the North’s official news media, but we have not been able to find out who operates them." The two Koreas agreed to stop their psychological war after their first summit meeting in 2000, but the situation has changed following the sinking of a South Korean warship in the West Sea earlier this year.

Mobile Communication Reportedly Grows in North Korea

The Korea Times reported the other day that cell phones are becoming more popular in North Korea, and the article included some recent data.  The number of North Koreans with a state-approved cell phone reached nearly 185,000 as of the end of June, operator Orascom Telecom said Thursday, as more citizens have mobile access after a recent government expansion of services. Egypt’s Orascom, which operates the mobile operator Koryolink in partnership with the North Korean regime, said in a first-half report that services have expanded to several cities other than Pyongyang and that 184,531 subscribers had signed up as of June 30.
Although 60 percent of North Korea's citizens now technically have access to mobile communication, the network reportedly excludes cities near the border with South Korea because authorities fear the proximity could allow cross-border communication.  According to Orascom, foreigners, middle class people and young people are all taking advantage of the service.  However, according to Radio Free Asia, North Koreans have to pay a steep price to go mobile.  Customers must pay the equivalent of $250 for a phone, in addition to high-priced pre-paid minutes.

Some Context for the Police Raid on Google Korea Offices

Press reports provide additional context surround the policy raid on Google Korea's offices, as noted in my previous post.  As reported in The Korea Times, the raid here was unexpected, as the company had been talking closely with the Korea Communications Commission on how to handle the data it had collected.  Talks with the KCC were reportedly focused more on retrieving the data than on destroying it and the police raid came as a surprise.  Korea is one of about a dozen countries, including the U.S., Canada, Germany, France, Britain and Australia, that are investigating whether Google broke their privacy laws in pushing out he localized versions of street view.

Police Raid the Office of Google Korea

As reported in most of the local media and in The New York Times, Korean police raided the offices of Google Korea on Tuesday as part of an investigation into whether the company had illegally collected and stored personal wireless data.  The search company is already facing lawsuits and investigations in several countries in connection with private wireless data collected for its Street View service.From late last year until May, Google Korea dispatched cars topped with cameras to cruise around the country to photograph neighborhoods before the planned introduction of Street View. The police suspect that those cars might have illegally captured and stored personal data from wireless networks while they were mapping streets, a statement by the Cyber Terror Response Center of the Korean National Police Agency said. Google said it would cooperate with the investigation. This is a story that bears following, especially since Google is already facing investigations and questions in several other countries on this same issue.

iPhone App is a Step Toward Korea's Smart Grid

I've commented in earlier posts on Korea's smart-grid pilot project in Jeju.  Now, in an interesting related development, the Korea Power Exchange has released an app for the iPhone.  Reportedly, this makes Korea the first country in the world (certainly it is one of the first) to put real-time data on electric power supply and consumption on the mobile internet.  The English application is quite well done and very informative.  I assume the Korean side of the service is, if anything, even more informative.   In addition to tracking current electricity supply and demand levels, the service has historical data, future projections, information on electricity pricing and more.  It has a very nice explanation of the future changes coming to the market for electric power here and around the world with the advent of the smart-grid era.