Neglected Weakness of Korean Industry: Information Technology

	▲ It is AlphaGo, an Artificial Intelligence developed by Google Deep Mind.
/Photography from The Verge

   Eminent baduk player Lee Se-dol surrendered to “AlphaGo,” an Artificial Intelligence program developed by Google DeepMind. This amazing performance from “AI” has led the IT industry to start a new wave. With astonishing results of Artificial Intelligence research, Information Technology is now regarded as the key to the future development of society. Nations all over the world are very passionate about research and investment in the IT field as well as Artificial Intelligence, one of the biggest issues of the future era. 

   Korea has long been called as the “IT leader,” with successful companies and competitiveness in exports. The country has been ranked first for Memory Semiconductor production rate, and has companies that outstood in the Information Technology field. Samsung is the first in hardware sales, with LG in the fourth and Hynix in the 43rd. The national Smartphone ownership rate has reached 86 percent, and Internet use is at almost 100 percent. Korea’s fast Internet speed and high production rate in electronic devices have given other countries the image of Korea as a highly developed country.

 The reality of IT industry of Korea

  However, the current situation is not the same as the statistics shown above. Many experts have claimed that Korea is unverdeveloped in terms of market dominance and research support for Information Technology. According to an IT industry research institute, “Insights,” Taiwan produced the biggest share of semiconductors by 21.7 percent in 2015. The Ministry of Science, ICT and Future Planning announced that Korea’s Information and Communications and Technologies (ICT) export rate in January 2016 has dropped to 17.9 percent compared to that of January 2015. Professor Lee Chang-hwan, from the Department of Information and Communication Engineering, said, “Korea’s IT industry is under depression. Korea outstands in the hardware field, but when it comes to software, there is no big achievement made so far.”

Global movements for IT development

  The field of Artificial Intelligence was predicted to be the biggest story of Information Technology in 2016. “AlphaGo” showed a surprising result and potential of the AI field, and researchers are suggesting that AI will be applied to robots, self-driving cars, and Internet of Things (IoT) among other fields. Many countries are on an active mission to develop such industries. China has announced a project called, “Made in China 2025,” the nation’s most comprehensive and ambitious industrial plan. It is designed to transform China from a manufacturing giant into a world manufacturing power, including the IT field. Numerous companies from China, such as Huawei, Lenovo, and Shaomi, already have high worldwide market shares. Japan provides well-prepared education and research in science. This country is well known as the leader of key components in IT and has highly developed Artificial Intelligence robots. Fourty-three numbers of companies clearly show the status of the U.S. in IT field, having outstanding manpower, leading technology in software development and original technology. 

   Above these current positions, nations and companies are continuously trying to enlarge and develop their country’s industry. The European Union has announced an investment of one billion US dollars in human brain research, and the United States has started a research project called “Brain Initiative” with three billion dollars of investment. Toyota announced that it will invest three billion dollars over ten years, establishing an Artificial Intelligence research lab in Silicon Valley. Google is planning to invest 28 billion dollars over 14 years only for the Artificial Intelligence.

Insufficient infrastructure in Korea

  Compared to the movements of other countries and companies, Korea is just at the beginning. Despite the efforts, other nations and global corporations are pouring efforts into IT industry, while the Korean IT industry has shrunk due to fragile infrastructure and dominant trends in IT market. According to the International Institute for Management Development (IMD), Korea ranked 44th out of 61 countries that researched for brain drain index in 2015. This is because a number of high-quality workers in Korea has lost to other 43 countries which ranked above Korea.

   Regarding the matter, Professor Lee Chang-hwan commented, “In the case of software industry (one of the areas in IT industry), it is a dead market in Korea. Companies and governments do not acknowledge its value. They do not consider the potential it possesses and just price software as the labor of researchers. Naturally, talented and foresighted Korean workers see no vision in this area and leave the country. The government needs to work on the infrastructure of the industry. Investment is not everything.”

   Not surprisingly, most Koreans in the IT industry do not work for the development of original technology; even if they do, it is not in Korea. Most of the workers fly to the U.S. or China for better conditions and environment for their research, directly leading to “brain drain” in Korea. Others who remain in Korea are concentrated in the game industry, since it is the most profitable job. Neither of these cases benefit Korea’s IT industry.

Profit oriented industry market

  Moreover, domestic corporations tend to favor developing products that can be quickly distributed in the market rather than developing original technology. The reason is that original technology requires much more time and money in the early stage of the project. Professor Kim Woong-sup in the Department of Information and Communication Engineering commented, “My opinion on the Korean IT industry is that instead of developing original technology, the general IT field is focused on making profit through buying confirmed technologies from other countries to assemble the parts and repack them to sell at a higher price.” He added, “Because of the whole IT industry environment here, no one tries to develop original technology, since it directly influences their profits compared to other companies.”

   AI can be as victim here. It could not be marketed as a product in a short time, nor was the government has interest in it. Naturally, not many Korean people in the IT industry or outside of it either were interested in AI. The problem was not revealed until recently when AlphaGo was introduced to the world by defeating Lee Se-dol.Since AlphaGo’s impressive appearance, the Korean government and Korean corporations have turned their interest in AI as well. To improve Korea’s IT industry, the government announced several plans regarding investment in original technology.

Movements to improve the situation in Korea

  The Ministry of Science, ICT and Future Planning and the Ministry of Education introduced work plans for this year focusing on revitalizing and supporting projects related to ICT, science and biotechnology. They have loosened the restrictions for researchers and promised a better environment and flexible conditions regarding research and experiments. They have increased both the period of research and the amount of capital invested. Additionally, the government announced that they would invest in nine other original technologies as well as virtual reality, cloud, and ICT.

   The IT industry including AI is gaining all the attention of the world as experts predict that in upcoming years, machine will take over the majority of the work humans currently do. Since Korea do not have a long history in the field of science and lack conducting research on original technology, the Korean IT industry adopted the fast follower strategy, focusing on copying, digesting, and remodeling. This led Korea to become one of the leading countries in the IT industry, and, in some field, it still retains this seat. However, recent changes in trends in science and technology have revealed the limits of the fast follower strategy; quickly adopting confirmed foreign technology. To keep the lead, Korea needs to achieve more in the area of original technology.

   Professor Kim Woong-sup said, “I am actually one of the people who are very proud of the achievements we have made so far, since we started with such a big gap between other developed countries regarding the level of technology possessed. However, original technology of Korea IT is still far behind in many areas.” Similarly, Professor Lee added, “The attention to IT industry is solely because of AlphaGo. Government and companies need to create better environment and acknowledge the potential of this industry as a long-term development of Korean IT industry.”