e-Government System
Korea ranked first in UN e-government ratings in 2010 and 2012, but total exports of Korean e-government systems have been slowing down this year.
According to the Ministry of Public Administration and Security on November 11, Korea exported its e-government system to 27 countries as of October 31. The total amount reached US$341.7 million, 76% of the US$400 million target.
The result is widely regarded as an improvement in quality rather than quantity, given an increase in credit assistance through credit loans or local loans of import countries, instead of free handouts via Official Development Assistance (ODA).
In fact, export performance has not been so strong this year, as witnessed by delayed projects including a project for e-resident cards in Iraq.
The export target for 2013 has been set at US$400, a 33% increase from last year. The target was set by considering that the export growth rates are likely to slow this year, since exports in 2012 grew by 44% year-on-year to reach US$341.7 million. In 2011, the number amounted to US$235.66 million, a 158% increase from 2010 (US$148.76 million). The figure in 2010 was more than twice as many as that of 2009 (US$66.7 million).
The slowing trend has an impact on large companies in Korea. The top exporter Samsung SDS is planning to pull out of local and overseas markets in the latter half of this year.
POSCO ICT formed a consortium for a project for e-resident cards worth US$100 million in Iraq funded by the Iraqi government. Nevertheless, the project will not start within the year.
Meanwhile, SK C&C finalized only three deals, and LG CNS proceeded with two projects.
The reason for this year’s poor results lies in a delay in projects where overseas countries place an order themselves. Also, it was difficult for Korea’s smaller system integration companies to secure references, as large companies were no longer able to participate in the Korean public informatization projects below a certain level.
An industry source said, “Orders for overseas e-Government projects initiated by KOICA are subject to Korean regulations. Under a revision to the Software Industry Promotion Act, large companies cannot participate in almost all of the overseas projects due to the regulations. In addition, overseas projects often demand references that were made over a long time span, which means that potential project carriers need at least a few years of experience in the field.”
Korea’s e-government systems started in 2001-2002, grew in 2003-2007, and matured in 2008-2012. Despite a slowdown in export growth, there are a lot of expectations stemming from a sudden rise in visitors from developing countries to learn about e-government.
Many experts pointed out, “No projects for e-government at home and abroad are considered to be highly profitable. So, it is the time to change the current e-Government export strategy to package-type exports, by setting up a control tower at the governmental level.”