Red Light for ICT
The ICT sector is witnessing slower growth, after leading the development and exports of Korean industry. The sector is still growing, but its growth is visibly slowing down.
As a result, an increasing number of experts are saying that the failure of the ICT sector to find new growth engines through the convergence of ICT with other areas might threaten the ICT-focused Koran economy. The areas include banking, agriculture, and household appliances industries, or the manufacturing sector like the auto industry.
“So far, Korea's ICT sector has been growing rapidly, contributing to the growth of other industries. However, the sector is growing slowly in terms of production, exports, and employment,” said a report on the long-term trend of the Korean ICT published by the Korea Information Society Development Institute in December 2014.
According to the report, the local ICT industry was estimated at 42.7967 trillion won (US$39.7337 billion) in 2011. The sector was worth about 70.1677 trillion won (US$65.0848 billion) in 2005, 110.3698 trillion won (US$102.1671 billion) in 2010, and 139.4597 trillion won (US$129.3572 billion) in 2013. Although the industry has been growing, its growth rates have been visibly decreasing. The sector posted a year-on-year increase of 14.6 percent in 2001, 11.7 percent in 2005, 8.6 percent in 2010, and 7.7 percent in 2013. The data shows that its growth rates have been cut almost in half for 12 years.
The growth of exports of ICT goods have started slowing as well. After recording a 22.5 percent year-on-year growth in 2011, the sector posted a 21.9 percent growth in 2005, 15.9 percent in 2010, and 11.1 percent in 2013. The country's ICT export growth has also decreased by more than half during the same period.
The report cited the increasingly mature ICT industry, market saturation for major items like mobile phones and semiconductors, intensifying competition in the global market, and the offshoring of manufacturing jobs to other countries as the four major reasons for the phenomenon.
Industry analysts are stressing that the convergence of ICT with different industries is necessary to boost the sector's growth. In fact, the ICT industry is trying hard to team up with other sectors such as banking, agriculture, medical, household appliances, and auto.