Saturday, October 28, 2017

Semiconductors, Korea's lead export, are like rice

I am told that back in the late 1970s when Korea's world-leading semiconductor industry was only a vision and long-term goal, policymakers and industry leaders referred to semiconductors (also called chips) as "rice" (쌀 in Korean as in the phrase
‘전자산업의 쌀’ 반도체). The purpose of the metaphor was to convey that semiconductors would be, like rice, a staple commodity. 
Today, there is abundant evidence that chips are a staple of the burgeoning global ICT sector. As reported this week by The Korea Times, they are now Korea's leading export, comprising 16 percent of 2017 exports. The dominance of semiconductors in Korea's export-led economy is illustrated in the accompanying graphic (click for a full size version), published in an article last month by The Korea Herald. As this article notes, commodity markets have their ups and downs and so there is risk in over-reliance on the semiconductor sector. There would be a similar risk if this nation were so heavily dependent on the export of rice.

Wednesday, October 25, 2017

Why Samsung and LG dominate Korea's smartphone market

A short but very interesting article in The Korea Herald helps to answer the question of why Samsung and LG are so dominant in the local smartphone market here in Korea.  Entitled "Foreign makers keep eye on changes in smartphone distribution" the article begins by noting that foreign smartphone manufacturers are paying attention to lawmakers' efforts to reform smartphone distribution channels. "Currently, the Korean smartphone market is dominated by two local firms -- Samsung Electronics with a 63.8 percent share and LG Electronics with 11.8 percent.  Apple holds an 11.9 percent share."
The article goes on to note that "The solid presence of Korean firms is partly driven by the nation’s unique distribution channels in which local telecom carriers entice customers by giving subsidies for Samsung and LG phones, based on prior arrangements between the carriers and handset makers.  They provide less subsidies for Apple phones, as they have no prior arrangement with Apple, and provide none to other Chinese and Japanese brands because their phones are not sold via mobile carriers but through their own stores or online."
Furthermore, " In Korea, only 8 percent of smartphone owners bought devices without going through telecom operators compared to the global average of 61 percent, according to the US research firm Strategy Analytics."
It would appear that the days of such overwhelming dominance by Samsung and LG are about to end.  Smartphones themselves are modular in nature and quickly become commoditized.  These trends suggest that Korea's leading companies, while not abandoning the design and manufacture of smart phones, need to move toward the software and services that these devices carry.

Saturday, October 21, 2017

Monday, October 16, 2017

Korea's current buzzword: The 4th Industrial Revolution

In South Korea these days, the media are full of references to the "fourth industrial revolution."  Every week seems to bring news of another international conference or ministry pronouncement about this revolution, as if it were an accepted reality.  In fact, it is not universally accepted, and only in South Korea is the "fourth industrial revolution" so widely discussed and accepted.
I did a bit of quick research using Google Trends.   The first graphic (click for a full size version) shows patterns of worldwide search activity on Google for "fourth industrial revolution" and "third industrial revolution" from 2010 through the present.  Note that the "third industrial revolution" is the title of a book published in 2011 by Jeremy Rifken, who himself disputes the claim that we have entered a "fourth industrial revolution."  Not coincidentally, global search activity for "third industrial revolution" peaked in 2011, when Rifken's book was published.  Similarly, searches for "fourth industrial revolution" peaked starting in January of 2016 when Klaus Schwab convened the World Economic Forum around that theme and released his short book on the subject.
However, looking at global search patterns over time is only part of the picture.  As shown in the second world map graphic (click for a full size version) which I captured while hovering over the dark red shading on South Korea, the search intensity index for Korea was 100 or highest in the world.  The next highest index was 69 in South Africa.  Interestingly, there was 0 search intensity in South Korea for "third industrial revolution."
For those of you interested in why Rifkin disagrees with Klaus Schwab's contention that we've entered a "fourth industrial revolution," I refer you to his argument in the Huffington Post.   Despite being a buzzword here in Korea, perhaps there are good reasons that it hasn't caught on all around the world.

Friday, October 13, 2017

ITU Book launched October 11

The book mentioned in my previous post,  ICT-centric economic growth, innovation and job creation, was officially launched on October 11 in Buenos Aires Argentina. (click on the photograph taken at the launch for a full size version) A free copy of the book can be downloaded at this hyperlink.   Also, interviews with the experts who authored chapters can be viewed by clicking on their names under the photographs at the bottom of this ITU web page.  I authored Chapter 7, entitled "The Future of ICT-driven Education for Sustainable Development."

Sunday, October 8, 2017

Interview in conjunction with ITU book launch

Over the past year I've had the privilege of working with a group of experts assembled by the ITU to author a new book entitled ICT-centric economic growth, innovation and job creation.  The book will be launched on October 11th at a Ministerial Roundtable on ICTs 4 SDGs in Buenos Aires Argentina.  I authored Chapter 7 entitled "The Future of ICT-driven Education for Sustainable Development.   A description of the book and links to interviews with all of the experts who contributed can be found at this hyperlink.  My interview is embedded in this post for your convenience.

Tuesday, October 3, 2017

Russia provides new Internet connection for North Korea

Martyn Williams of 38North highlights a very interesting development in his latest post.   He reports that "A major Russian telecommunications company appears to have begun providing an Internet connection to North Korea. The new link supplements one from China and will provide back-up to Pyongyang at a time the US government is reportedly attacking its Internet infrastructure and pressuring China to end all business with North Korea.The connection, from TransTeleCom, began appearing in Internet routing databases at 09:08 UTC on Sunday, or around 17:38 Pyongyang time on Sunday evening. Internet routing databases map the thousands of connections between telecom providers and enable computers to figure out the best route to a destination."  Prior to this, Internet users in North Korea were all funneled through a China Unicom Link.
As shown on the accompanying graphic (click for a full size version) TransTeleCom's fiber network extends right up to its border with North Korea.  The significance of this development lies in the context of current efforts by the United Nations and the international community to sanction and economically isolate North Korea.