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Korea’s Software Industry Accounts for only 1% of Global Market
Mired in Stagnation
Korea’s Software Industry Accounts for only 1% of Global Market
  • By Cho Jin-young
  • August 9, 2017, 04:00
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The total output of the software industry of South Korea was 50.5 trillion won (US$45.4 billion) last year, up 4.0% from a year ago.
The total output of the software industry of South Korea was 50.5 trillion won (US$45.4 billion) last year, up 4.0% from a year ago.

 

The Ministry of Science & ICT and the Software Policy & Research Institute announced on August 8 that the total output of the software industry of South Korea was 50.5 trillion won (US$45.4 billion) last year, up 4.0% from a year ago. The IT service output totaled 32.1 trillion won (US$28.8 billion), followed by game software (9.4 trillion won or US$8.4 billion) and package software (nine trillion won or US$8 billion).
 
The total output of the industry had shown a growth of 6.3% to 9.8% in 2012 to 2014. However, it fell to 5% in 2015 and 4% last year amid the global economic recession that affected the IT service and software sectors as a whole.

According to market research firm IDC, the size of the South Korean software market edged up by 2.7% from US$10.6 billion to US$10.9 billion between 2015 and 2016. Meanwhile, the global software market grew 4.5% to US$1.096 trillion during the same period. The local software market ranked 16th in the world in size and accounted for only 1% of the global market. The software market of the United States was the largest in it with a size of US$496.7 billion and a share of 45.3%. It was followed by those of Britain (US$80.5 billion, 7.3%) and Japan (US$69.4 billion, 6.3%).

The software markets of China, India, Mexico and South Africa are showing a rapid growth these days, too. The Chinese market grew 8.8% and reached US$37 billion last year while the Indian, Mexican and South African markets grew 8.5%, 10.3% and 8.7% to US$13.6 billion, US$9.2 billion and US$7.3 billion, respectively. The annual growth of the software market of South Korea is estimated at less than 3% until 2020. On the contrary, those of China, India and Mexico are estimated at 8.9%, 9.1% and 9.1%, respectively.

“Bidding restrictions on large corporations need to be lifted in public software projects in high-demand fields such as the Internet of Things, artificial intelligence and cloud computing,” an industry source pointed out, adding, “Also required are restrictions on multistage subcontracts, separate software orders, mandatory benchmark tests, etc.”