ITA and the Growth of Koreas IT Industry

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ITA and the Growth of Koreas IT Industry

• 2007. 3. 28-29, Geneva
• Hyeo-eun Lee, Ph.D
• Director, IITA
• Republic of Korea

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Contents
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1. Status of the Korean IT Industry
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1-1. Overview of the Korean Economy
Korea is a model-country of accomplishing
economic growth thru intl trade
GDP 2 bil.(60) ? 788
bil.(05), 12th Intl. Trade .38
bil.(60) ? 546 bil.(05), 12th ? 635 bil.(06)
- Export .03 bil.(60) ? 284
bil.(05), 12th ? 326 bil.(06) - Import
.34 bil.(60) ? 261 bil.(05), 13th ? 309
bil.(06) Degree of Dependence upon Foreign
Trade 69.3(05), 9th
Koreas Top Exporting Items in 2006
3th
4th
1st
2nd
27.0 B
22.1 B
37.4 B
32.9 B
(Source KITA)
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1-2. Importance of IT Industry GDP
IT industry has been a leading growth engine of
Korean economy
IT Real GDP KRW49 tri.(00) ? KRW97
tri.(05) Share in GDP 9.5(00) ?
15.0(05) Contribution to GDP Growth
32.1(00) ? 46.6(05)
(Source Bank of Korea)
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1-2. Importance of IT Industry Export
IT has led Koreas export growth and contributed
to early exit from 1997 financial crisis
IT Export 63.1 bil.(00) ? 113.3
bil.(06) Share in Total Export 36.6(00) ?
34.8(06) Contribution to Export Growth
51.1(00) ? 26.6 (06)
(Source KITA)
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1-3. Share in the Global Market
Flagship products are memory semiconductor,
display panel and mobile handset.
NAND Flash (12.8 B)
Volume of Global Market (06)
PDP-Panel (7.7 B)
LCD-Panel (50.7 B)
DRAM (34.3 B)
60
SEC, HYNIX (62.1)
Handset (159.0 B)
LGE, Samsung SDI (49.5)
LCD-TV (22.2 B)
40
SEC, LPL (46.6)
SEC, HYNIX (45.2)
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SEC, LGE (24.4)
SEC, LGE (22.4)
Share of Korea (06, Production)
(Source Gartner, Displaysearch)
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1-4. IT Infrastructure
Korea is at global top-level in IT
infrastructure and penetration
Current Status of Informatization in Korea
(Source www.nia.or.kr)
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2. Koreas KSFs and Recent Policy
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2-1. Evaluation of the World
Korea is top-ranked in major IT indices
(2005, 2006)
World Competitiveness Scoreboard (IMD)
Technological Infrastructure
Broadband Subscribers
Broadband Cost
High-Tech Exports
1(05) ? 1(06)
2(05) ? 2(06)
7(05) ? 7(06)
2(05) ? 6(06)
of subscribers per 1,000 habitants
US per 100 kbps per month
of manufactured exports
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2-1. Evaluation of the World
Koreas accomplishment in IT became the bench
marking target of the world
IT Powerhouse, the Korean Special Report
Oh! Surprising IT Korea, Mobile Internet
Era, Koreans are connected Anytime, Anywhere.
(BBC, 06 May) South Korea, the worlds
most wired country, is rushing to turn what
sounds like science fiction into everyday
life. (New York Times, 06 Apr.) Korea would
have the most influence in the future digital
world. (Fortune, 04 Sep.) The
development of IT in Korea is a miracle. There
is nothing to recommend. (ITU, 04 Apr.)
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2-2. Key Success Factors
Koreas IT today is the result of combined
efforts of private and public sectors
Public Sector
Private Sector
- Establishment of MIC and IT Promotion
Fund - Sharing Vision w/ People - Strategic
Investment in IT RD and HRD - Deregulation
and Market Liberalization

• - Heavy and Timely Investment
• in Strategic Areas
• - Building up Tech.
• Competency
• - Market Diversification
• and Globalization

Digital Minded People Quality Labor Force
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(Reference Data) Korea Export Volume by Region
(Source IITA)
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2-3. IT 839 Strategy Introduction
Koreas initiative to build new growth engines
and realize U-society
8 Services
9 Products
Mobile Telecom/Telematics Devices Broadband/Home
NW Devices Digital TV/Broadcasting Devices NG
Computing/Peripherals Intelligent Service
Robot IT SoC/Convergence Components RFID/USN
Devices Embedded SW Digital Contents/SW Solution
HSDPA/W-CDMA Service WiBro Service Broadband
Convergence DMB/DTV Service u-Home Service
Telematics/ Location-based Service RFID/USN
Application IT Service
Broadband Convergence Network u-Sensor Network
Soft Infraware
3 Infrastructures
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2-3. IT 839 Strategy Recent Achievements
DMB (Digital Multimedia Broadcasting)

• Converged broadcasting
• communications service
• Digital TV on mobile handset
• Adopted by ETSI as a standard in Europe
• Commercial service started in 2005

WiBro (Wireless Broadband Portable Internet)

• Fast and seamless access with lower fee to
  broadband internet
• on the move
• Based on OFDM / TDD (IEEE802.16e) 50Mbps with
  10MHz BW _at_2.3GHz
• Adopted by IEEE as an international standard
• Adopted by Sprint Nextel(USA) as 4G Mobile
  Service in 2006
• Commercial service started in 2006

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3. ITA and International Trade
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3-1. ITA and Korea
ITA products have led Koreas foreign trade
growth in 1990s. However,
Share of ITA products in Koreas intl trade
began to decrease in 2000s. - 9601 trade
CAGR of ITA products gt non-ITA products -
0206 trade CAGR of non-ITA products gt ITA
products ITA does not cover new products
whose intl markets grow fast in recent years.
Koreas Trade in IT (HS 10 digit) ITA vs.
non-ITA (Unit B)
(Source IITA, CAGR Compound Annual Growth
Rate)
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3-1. ITA and Korea
TV and Monitor are representative non-ITA
products in Koreas foreign trade
Koreas Major Non-ITA Products (Unit M)
(Source IITA)
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3-2. Changes in the First Decade Summary
There have been remarkable changes in major
products and players
Trends of Major Products and Countries (Unit B)
(Source UN Comtrade HS 1996 or HS 1992, GTIS
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3-2. Changes in the First Decade Summary
ITA has contributed to the take-off of
developing countries in IT export.
Major Export Countries of ITA Product (Unit B)
96
Country
99
Country
05
Country
USA Japan Taiwan China Mexico Korea Canada Indone
sia S. Africa
83.4 62.6 16.6 13.4 13.1 13.0 10.7 1.8 0.3
USA Japan EU(25) Taiwan Hong Kong Malaysia
China Mexico Korea Canada
96.3 70.0 65.3 37.0 29.9 27.0 25.7 24.2 20.7 13.0
China USA EU(25) Hong Kong Japan
Korea Taiwan Malaysia Mexico Thailand
210.7 140.1 133.1 114.4 114.0 83.5 69.5
58.1 32.4 24.1
ITA Product Attachment A, Section 1 (Excluded
9026, 9027, 903440, 854381)
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3-2. Changes in the First Decade Summary
ICChip and Computer steady, Radio(wireless)
up, wired down
(Source GTIS)
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3-2. Changes in the First Decade Computer
China and Malaysia have emerged as new
powerhouses.
? 108.2 B(96) ? 198.9 B(00) ? 271.0 B(05),
CAGR(0005) 6.4 3.7 B(96) ? 11.0
B(00) ? 76.4 B(05), CAGR(0005) 40.8
25.2 B(96) ? 30.9 B(00) ? 25.4 B(05),
CAGR(0005) -3.9
13.0 B(00) ? 19.3 B(05), CAGR(0005)
8.2 4.7 B(96) ? 9.3 B(00) ?
9.2 B(05), CAGR(0005) -0.1
Export of ADP Machines and Units (HS 8471)
(Source GTIS)
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3-2. Changes in the First Decade Wired Telecom
Traditional powerhouses sustained and China and
Mexico have emerged.
? 40.9 B(96) ? 86.4 B(00) ? 66.8 B(05),
CAGR(0005) -5.0
15.0 B(00) ? 11.6 B(05), CAGR(0005) -5.1
6.5 B(96) ? 12.9 B(00) ? 10.3 B(05),
CAGR(0005) -4.5 1.4 B(96) ? 3.1
B(00) ? 9.4 B(05), CAGR(0005) 24.7
0.8 B(96) ? 0.7 B(00) ? 0.9 B(05),
CAGR(0005) 6.0
Export of Wired Telecom Equipment (HS 8517)
(Source GTIS)
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3-2. Changes in the First Decade Radio
Transmission
China and Korea have emerged and EU sustained.

• ? 29.5 B(96) ? 77.1 B(00) ? 182.9 B(05),
  CAGR(0005) 18.9
• 0.5 B(96) ? 3.3 B(00) ? 30.9
  B(05), CAGR(0005) 56.6
• 11.3 B(00) ?
  30.8 B(05), CAGR(0005) 22.2
• 0.8 B(96) ? 6.3 B(00) ? 20.2
  B(05), CAGR(0005) 26.3
• 5.5 B(96) ? 9.8 B(00) ? 13.7
  B(05), CAGR(0005) 6.8

Export of Radio Transmission Apparatus (HS 8525)
(Source GTIS)
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3-2. Changes in the First Decade IC Chips
Top 4 Countries have been unchanged USA, JPN,
TWN, KOR
? 109.9 B(96) ? 252.2 B(00) ? 299.0 B(05),
CAGR(0005) 3.5 32.8 B(96) ? 54.1
B(00) ? 42.0 B(05), CAGR(0005) -4.9
24.8 B(96) ? 30.2 B(00) ? 29.1
B(05), CAGR(0005) -0.8 7.1 B(96) ?
18.6 B(00) ? 27.0 B(05), CAGR(0005)
7.8 14.2 B(96) ? 20.0 B(00) ?
24.4 B(05), CAGR(0005) 4.0
Export of IC Chips (HS 8542)
(Source GTIS)
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3-2. Changes in the First Decade TV Monitor
HS 8528(non-ITA) has been led by Mexico(non-ITA
Member).
? 17.6 B(96) ? 28.7 B(00) ? 57.0 B(05),
CAGR(0005) 14.7 3.3 B(96) ? 5.7
B(00) ? 10.3 B(05), CAGR(0005) 12.3
0.8 B(96) ? 1.3 B(00) ? 8.4 B(05),
CAGR(0005) 45.3 2.0 B(96) ? 3.3
B(00) ? 3.9 B(05), CAGR(0005) 3.3
2.2 B(96) ? 1.6 B(00) ? 3.0 B(05),
CAGR(0005) 13.3
Export of TV Monitors (HS 8528, non-ITA)
(Source GTIS)
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4. For More Success of ITA
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4.1 Recommendations
For ITA to be more successful, we recommend the
followings
Expansion of ITA coverage Developing and
regularly updating standard definition of HS
codes wrt ITA coverage Concerted efforts
to reduce NTBs such as TBT
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Happy U-Life that does with U-Korea realization
THANK YOU
www.iita.re.kr 82-42-710-1007 lee_at_iita.re.kr
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