Generational shifts in the corporate world and the grim reality of the Korean software market
Global household names, such as Citygroup, General Electric (GE), Bank of America, AIG, HSBC Group, Exxon Mobil, BP and JPMorgan Chase & Co., which used to dominate the list of the world’s top 10 global companies a decade ago, had been dethroned by global software titans (e.g. Microsoft, Apple, Google, Facebook, etc.) a long time ago. There is even talk of a near future ruled by Chinese tech giants Baidu, Alibaba, Tencent and Xiaomi.
The same is true of the smartphone market. iPhone, which reigned supreme in the global smartphone market has lost out to Samsung Electronics, the maker of Galaxy S smartphones. Now Samsung finds itself being closely chased by China’s Xiaomi.
Software has already taken center stage in the world. Technological advances, which used to revolve around hardware, is now drived by software.
Unfortunately, the S. Korean software market is in poor shape. Despite unfavorable market conditions, a few Korean software developers are making a good showing but a great number of Korean software developers, feeling helpless, frustrated on home soil, have already walked off the domestic market and are searching for business opportunities in overseas markets.
Jewelry and the Autobahn
Belgium, a small European country that is also called the birthplace of the Red Devils, has powered up its economic growth with its jewelry industry. However, ironically enough, Belgium has no gemstone mine. With a discerning eye for the value of uncut rough diamonds buried in South Africa, Begium imported jewelry mining equipment technologies from its neighbors Finland and Sweden. And Begium cut and polished rough diamonds, shipped from South Africa (a nation 7,000 kilometers away from Belgim), into glittering polished diamonds and sold them.
During the Napoleonic era, Belgium sold the diamonds to royalty and the nobility in the Netherlands, Denmark and Luxsemburg. Their diamonds then were distributed globally by Jews, thus bringing a huge amount of wealth to Belgium.
Germany, home to the world’s premium car manufacturers, built the Autobahn to soup up its car industry. Now the Autobahn has become the world’s testbed for new fancy vehicles manufactured by global carmakers. There is a funny joke that Britan’s anti-automobile laws early on in the automobile's history, which were made in favor of horse-drawn carriages as a means of transportation, made the nation slack off on the development of its car industry.
What do such stories imply Why did Belgium venture into jewelry production in the first place even without gemstrone mines Why did Germany audacioualy push for the construction of the Autobahn, the federal controlled-access highway system with no mandated speed limit These stories imply that national policy should be future-oriented. If we continued to be content with the status quo, we could end up laying an irreversible burden on our future generations.
Now is the time for software.
S. Korea has come out on top in the United Nations E-Government Survey three times in a row for six consecutive years. S. Korea is the world’s undisputed IT powerhouse with its IT products accounting for over 33% of its total exports. Yet, people say that the moment we choose to coast, we begin to fall behind.
All the content distributed via wired and wireless communication networks, whether it be sound, writings or pictures, is something that is created and delivered by software. Then what is software
Software is something that breathes new life into any given object and creates the content and results we want to see. If we liken hardware to the dust of the ground that the LORD God used to form a man and to the rib that the LORD God had taken from the man to create a woman, software is the breath of life he breathed into the man’s nostrils to turn the man into a living person. Our first impression of the smartphones that most of us carry come from their hardware, but the degree of happiness and conveience we obtained from our smartphones is determined by the software inside.
Now we should cast a cold eye on the harsh reality we face and prepare for our future coolheadedly. That is is the right way to lead our lives and that should be the gist of the government’s new growth engine policy.
Cho Sung-kap, professor at Korea University Grauate School of Informaiton Management Engineering, tells an anecdote about the proposal he prepared while he was serveing as head of Korea ICT Export Promtion Agency. The proposal explaining the composition, operation and advantages of S. Korea’ e-government systems was written to promote exports of the nation’s e-governent systems to an overseas market. After reviewing the proposal, a trade representative from the overseas market said, “The estimate you submitted is 100 won (tentative) in total, but there is nothing I want to buy from you.
Accoriding to your estimate, the price of IBM servers is 10 won, Microsoft’s operating system 10 won, CISCO network equipment 10 won, EMC storage 10 won, Oracle database 20 won and Java C programming language 15 won and the wage for program developers 20 won. In other words, except for the 20 won for program developers, the rest (80 won) goes to other multinational companies. We can purchase their products here too. And since we have a large pool of well-trained, well-educated program developers here too, we see no need to accept your bid. What would you do if you were in my shoes”
He was supposed to gush about the excellence of Korean e-government systems in the meeting with the representative, held in a faraway foreign country. But the representative’s straightforward comment on his proposal made him somewhat dumbfounded.
Similar anecdotes are probably being still repeated somewhere because we do not have products that can replace the aforementioned global software giants’ IT solutions. More depressingly, there is still a long way to go before we can solve this problem.
When the Electronics and Telecommunications Research Institute (ETRI) was in the midst of developing TD and CDMA three decades ago, the System Engineering Research Institute (SERI) embarked on the development of hardware Ticom and operating system K-DOS and database Q-Plus, with a view to weaning ths nation off its dependence on foreing-made solutions. However, such efforts are no longer possible today. SERI was later disbanded, further putting our endeavors for the development and globalization of home grown software in disarray.
Although S. Korea has ranked first in the United Nations E-Government Survey three times in a row for six consecutive years, exports of our e-government systems have yet to achieve remarkable results because our software development has been treading water since 2000.
We now have to wake up to the cold hard reality that there is widespread talk of the global market to be dominated by China’s TABX (Tencent, Alibaba, Baidu and Xiaomi) in the forseeable future and Samsung smartphones are facing tough competition from Xiaomi smartphones. And bearing in mind how the speed-limitless autobahns, filled with the thunderous roar of engines, have propelled Germany into becoming the world’s automobile powerhouse, we have to set great stores by software, rather than by hardware.
By Monica Jung
