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Korean ICT Companies are Losing Their Competitiveness
Moving Backwards
Korean ICT Companies are Losing Their Competitiveness
  • By Cho Jin-young
  • June 20, 2017, 03:15
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Korean ICT companies’ sales, which rank fifth in the world in 2016, showed a decline of 57% over the past three years.
Korean ICT companies’ sales, which rank fifth in the world in 2016, showed a decline of 57% over the past three years.

 

It has been found that global information and communications technology (ICT) companies are leading the ongoing global economic recovery across the world while most of the other industries such as manufacturing and logistics are failing to boost their sales and profits.

According to the Institute for Information & communications Technology Promotion (IITP), global ICT companies’ sales and EBITDA increased at the same time last year and healthcare, ICT and real estate led the growth of the global economy from 2013 to last year.

Specifically, those ICT companies’ sales and EBITDA increased at an annual average of 2% and 3.8% during the period, respectively. In addition, their R&D expenditure showed an average annual growth of 7% in the four-year period. On the contrary, the total sales of companies around the world decreased at an annual average of 2.6% and this decline was led by the energy, consumer goods and raw materials sectors.

The institute said that the ongoing growth of the ICT industry is rather limited to the United States and China whereas South Korean ICT companies are moving backwards. “The sales of U.S. and Chinese ICT companies accounted for 51.7% of the total sales of the global ICT industry last year and the ratio increased by five percentage points in three years,” it explained, adding, “Meanwhile, South Korean ICT companies’ sales, which rank fifth in the world last year, showed a decline of 57%, second to none, during the same period.”

According to its report, the global top 100 ICT companies in terms of sales included 39 American and only four South Korean last year. The latter number had been six in 2013. Likewise, South Korean ICT companies’ R&D expenditure fell 1.3% between 2013 and last year while those of American and Chinese increased 9% and 21.3%, respectively.