Nowhere else in Asia is the impact of technology being felt more acutely. Embraced as the saviour of Korea’s crisis-hit economy four years ago, IT has swept through every sector, from industry to education and politics, creating new jobs, shaking up old ways of doing business and prompting social change. How it plays out will provide a road map for other emerging countries on the same journey up the value chain to a level of innovation that China’s low-cost workers can’t match.
“Korea is becoming an Asian leader. We’ve really leapfrogged Japan,” says Michael Kim, the Korea-based president of U.S. private equity firm The Carlyle Group’s Asian operations.
Where is technology taking Korea? Consider the facts. Every day in the month of April a new e-commerce Web site went on-line. The market leader, SamsungMall.com, sells more goods in one day than six real-world department stores. Three out of four teens prefer to play on-line games than watch television. “That’s real usage,” says Ed Graham, head of Sun Microsystems in Korea. It’s also real jobs, which are being created in the tech sector three times faster than anywhere else.
NCSoft’s Lineage video game is the No. 1 seller in Taiwan, and NCsoft is moving into China and Japan. Sony and Microsoft are scrambling to catch up.
In any case Korea’s love affair with technology is about more that just the Internet. Computer chips still dominate tech exports, but more value-added gadgetry is catching up. One in five mobile handsets worldwide and nearly half the flat-screen monitors used in the latest TVs and computers are made in Korea. IT is the fastest growing sector of the economy. Its share of GDP is the highest of any industrialized country at 13%. Exports totalled nearly $40 billion last year, a quarter of total shipments.
Wired calls Korea the “bandwidth capital of the world”. It writes: “South Korea has the highest per capita broadband penetration in the world. Slightly more than half of its households have high-bandwidth connections, compared to less than 10 percent in the US. The growth in broadband has surged in the last three years from a few hundred thousand subscribers to 8.5 million.”
South Korea’s technology leadership is part of an increasing dominance of the East in emerging technologies. I’ll be writing more on in my Tech Talk on 10X Forces.