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(LEAD) S. Korea to spend 189 tln won to strengthen IT sector
By Lee Joon-seung
SEOUL, Sept. 2 (Yonhap) -- South Korea will spend 189.3 trillion won (US$151.5 billion) over the next five years to strengthen its competitiveness in the information technology (IT) sector, the government said Wednesday.
The Presidential Council for Future and Vision said funds will be injected into five core areas, covering IT conversion, software, leading IT industries, broadcasting and communication, and Internet infrastructure.
Of the total, to be spent by 2013, 14.1 trillion won will come from government coffers with the remaining 175.2 trillion won to be invested by the private sector, the council said in a meeting chaired by President Lee Myung-bak.
State funds are to be spent to help small- and medium-size enterprises conduct research and development, with 109.7 trillion won worth of private investments to be allocated for production and industrial infrastructure.
"South Korea is a global IT leader although more can be done to upgrade its capabilities so as to bolster the country's overall growth potential," Cho Seok, a deputy minister at the Ministry of Knowledge Economy said.
The official said that if investments are carried out according to plan, the country's growth potential may go up by 0.5 percentage point as a result of the increased spending.
In the IT-industrial conversion field, efforts will be made to merge traditional manufacturing businesses such as ships, automobiles and energy production with cutting-edge advances in IT to enhance competitiveness.
South Korea is the largest global producer of ships but its dominance is being challenged by Chinese yards. Korea is also trying to expand its market share in autos and power generation -- especially in atomic energy and "smart grid" systems.
Other industries that can benefit are healthcare, textiles, machinery, aerospace, construction, national defense and robotics.
"The use of devices like radio frequency identification tags and ubiquitous sensor networks could enhance competitiveness of local companies vis-a-vis foreign rivals," Cho said.
The new program is also designed to help South Korea hold onto and expand its share of the semiconductor, display panel and mobile phone markets, the council said. The country is the world's No. 1 manufacturer of memory chips and displays and ranks second in the production of handsets, yet relies heavily on foreign made manufacturing machinery in the production process, something Seoul hopes to change with the fresh initiative.
The five-year strategy calls for the creation of a nationwide, super-high speed Internet infrastructure able to transmit data at 1 gigabit per second -- 10 times the speed of current broadband lines. The proposed Internet infrastructure will also be more safe to use with built-in security and firewalls.
The plan also seeks to introduce a fully digital television broadcast system by 2012, aiming to foster the widespread use of wireless broadband (WiBro), Internet protocol television (IPTV) and three-dimensional TVs.
The council said WiBro and IPTV technology could help create new audio-visual markets and spur consumption and investment vital for economic growth.
The government will also concentrate resources on developing the local software industry, which has struggled to keep pace with new developments in hardware. The goal is to push eight of the best-performing local software firms into the global top 100, and help 27 South Korean companies pull in individual annual sales of over 100 billion won.
yonngong@yna.co.kr
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