GE Chairman lauds Korea's information technology infrastructure

The Chairman and CEO of General Electric (GE) has been in Korea, meeting with President Park Geun-hye and with industry counterparts at Samsung.  Some of his comments are quite interesting.  As reported by the Korea Times, at a Friday press conference he called Korea "...the heartbeat of the world and a healthy place to invest."
Immelt also had some comments to make about conglomerates, at a time when Korea's family-controlled chaebol business groups are coming under criticism.  As noted in the Korea Joongang Daily,"Immelt said that people might have legitimate concerns about the conglomerates both in the United States and Korea, but he said that a company can be good at multiple areas while creating better efficiency and value. He said new corporate success stories like Google and Amazon.com are also expanding to become “their own form of conglomerate.”"
He also said that "..the Korean government’s creative economy initiative will increasingly put Korea in value-added areas. He said the initiative gives GE a sense of where to invest further in Korea.For instance, the Korean economy has the best information technologies infrastructure of any country that we compete with in the world,” he said, citing the industrial Internet as an example."

Government leadership in Korea's ICT-led development

I thoroughly enjoyed participating in the Global e-Government Forum 2013 on Tuesday and Wednesday of this week at KINTEX in Ilsan, including chairing a panel entitled "Communication:  Enhancing democracy through online participation."  This post is prompted by a keynote address given on the second day of the conference by Chair and Emeritus Professor Ahn, Moon Suk of Korea University.  In it, he enumerated some of the major success factors leading to Korea's current status as a world leader in e-government.  I was pleased to see that he acknowledged the significance of the phonetic and very scientific hangul alphabet, along with the role of technocrats trained overseas, the shared vision of policymakers and opinion leaders, and the commitment of every president of South Korea.  This last success factor is something I stressed in my October 15 presentation to ICT ministers from Latin America and the Caribbean in Seoul, using the accompanying slide as an illustration. (click to see a full size version)  The blue line on the slide represents GNI/capita in current U.S.$ as reported by the World Bank.
Over the years since 1980, South Korea developed many plans, some dealing with infrastructure projects and others more broadly with informatization.  Among these plans, the two highlighted in blue on the slide deserve special emphasis.  The 1981 "Long Term Plan to Invigorate the Electronics Sector," comprehensively addressed what we now recognize as the ICT sector, years before that term came into common usage by international organizations.  It also addressed the question of financing from both public and private sources.   In 1996, the administration of President Kim Young Sam elevated informatization to the level of a top national policy priority, with the newly enlarged Ministry of Information and Communication (MIC) given overall responsibility for guiding ICT sector industrial policy.
As Professor Ahn stressed in his keynote address, and as this slide illustrates for the period from 1980 to the present, every South Korean president has supported development of the ICT sector.  Remarkably, this included military governments and, after democratization both ruling party and opposition presidents.

Smartphone sales in Korea's saturated market

Not surprisingly, the diffusion of smartphones in South Korea, led by Samsung's Galaxy series, took place so rapidly that the market has already reached saturation.  However, as shown in the accompanying graphic, published by The Korea Times, (click to see a full size version) sales of smartphones in China are projected to soar, and are also expected to show healthy increases in the U.S. and India, according to a new report by Strategy Analytics.

Why the dark cloud over world TV market?

I've long been interested in the fortunes of Korea's television and display industry.  Digital displays and television sets form a major part of this nation's ICT sector, as noted in my previous post.  So the article in the English Chosun Ilbo headlined "Dark Cloud Hangs over Global TV Market" naturally caught my eye.  It reports on market research showing a drop in sales of flat panel TV sets.  It also notes plummeting prices and suggests that one reason for the decline "...is that this is a year when neither the Olympic Games nor the football World Cup are held, since they happen in alternate even years." While that may be one contributing factor in the short term, there are other more important reasons for the longer term trend. As shown in the accompanying graphic(click to see a full-size version)LED backlit LCD televisions began to dominate the market starting in 2010. However, another important trend took place in the market over approximately the same time period, namely the introduction of smart phones and tablets!  Indeed, as Andrew Tonner of Motley Fool suggests in a blog post "One of the interesting sides from the explosion of the global tablet market has been its negative effect for not only the PC market, which we've seen, but now also the TV market."  This would seem to be the main reason for declining TV sales this year, without discounting the absence of a globally televised sports event.   Coincidentally, it also helps to explain why the TV semiconductor market is growing, despite the decline in TV shipments. As noted by Digitimes, "Technologies such as wireless video connections, networking interfaces, multi-format decoders and LED backlighting have boosted the average semiconductor content in TV sets even as global TV unit shipments are forecast to decline by an estimated 3% in 2013."

A bit of history: How 1980-81 decisions anchored Korea's ICT-led development

On Tuesday of this week I attended the 1st Ministerial Forum for Broadband Development in Latin America and the Caribbean at the Shilla Hotel in Seoul and delivered one of two keynote presentations.   The forum was sponsored by the Ministry of Science, ICT and Future Planning along with the Inter American Development Bank and was attended by ICT ministers and delegations from eleven Latin American countries.  The discussions during the day were wide-ranging and most interesting.  They forced me to think about many things, including the topic of this post.   I decided to finally create the graphic included here to illustrate the far reaching consequences of decisions and long-range planning.  In 1981, led by technocrats in the Blue House, experts from academia, industry and government drafter a "Long term plan to invigorate the electronics sector."
The slides I prepared for my presentation to the Ministers used the growth curve in South Korea's GNI per capita, based on World Bank data, as an illustration to show the tremendous economic and social development from 1980 to the present.   One of the points I made, but probably did not adequately explain, is how decisions made in 1980 and 1981 addressed the ICT sector, years before that acronym (ICT =Information and Communications Technology) came into widespread use.
As shown in the accompanying graphic (click to see a full size version) there were four key decisions.

1. To develop and manufacture electronic switching systems through the TDX project.
2. To enter the global semiconductor market, through the 4MB DRAM project.
3. To begin color television broadcasting, which did not yet exist in Korea.
4. To separate the telecommunications business from the Ministry of Communications by forming the Korea Telecommunications Authority (KTA), marking the start of privatization and deregulation.

In retrospect, each of these decisions anchored an important part of South Korea's export-led economic and social development.  The nation is now a major manufacturer and exporter of 1) advanced networks, 2) semiconductor chips, 3)color television sets and displays, and 4) mobile handsets and tablets.