How can Korea boost its software industry?

Korea may be known as an IT powerhouse, but its place in the global software industry remains decidedly modest. Korean software took up less than 2 percent of the global market last year. Even in the domestic market, more than 80 percent of software originates from abroad. In the view of the government, the monopolization of the market by chaebol affiliates, crowding out smaller players, is one of the main reasons for the relatively weak position of the local industry.

“We do not have a very healthy ecosystem in the domestic market,” Kwon Hyouk-woo, senior deputy director of the software division of the Ministry of Knowledge Economy, told Voice. “We do need a very healthy and clean ecosystem where both large and small companies could exist together, but I think in Korea we do not have that, because (of) system integration affiliates of large conglomerates, such as Samsung SDS, LG CNS and SK C&C.”

Law revision

To address this, the National Assembly in May amended the Software Industry Promotion Act to disqualify large affiliates from procuring government contracts. The change will come into effect in January. The government also initiated the three-year World Best Software project in 2010, committing 160 billion won ($147 million) to supporting local businesses.

For full article, see Korea Herald.

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