Service sector

Korea’s ICT services sector is still not competitive

Korea accounted for less than 1% of global information and communication technology (ICT) services exports in 2017.

The Federation of Korean Industries analyzed OECD statistical data and announced on February 22 that South Korea accounted for 0.98% of global information and communication technology (ICT) services exports in 2017 .

“Ireland took first place with 16.41% while South Korea came in 21st and China and Japan recorded 6.32% and 1.07% respectively,” he said, adding: “Since South Korea’s ICT manufacturing exports are second in the world, the low figure is a serious imbalance. In 2018, China and South Korea’s ICT manufacturing exports fell amounted to US$528.5 million and US$256.63 million respectively.

The federation also pointed out that South Korea’s ICT industry accounted for 10.3% of its added value creation, the third highest in the OECD, but the same ratio of its ICT services industry was at 3.8%, 28th in the group of 38 states. “It shows that the ICT services industry is not playing its role with the acceleration of digital transformation,” he said.

The federation cited the underutilization of innovative ICT as a reason for the insufficient competitiveness of the ICT service industry in South Korea. “According to the OECD, the usage rate of cloud services in South Korea is 22.7%, the 32nd in the OECD,” he said, adding, “The numbers are 3.2 % and 27.9%, below OECD averages, for large enterprise data and ERP.

The federation mentioned that more technological innovations and more suitable workforce structures for the digital economy are necessary for the development of the ICT services industry. At present, the digital employment rate in South Korea, which includes ICT services, finance, insurance, accounting and legal services, is 48.8%, while the average of OECD is 50.2%.