The game industry and Korea's future role in it

Earlier this month The Joongang Daily published an interesting and informative article summarizing some main results from a new study of the game industry in Korea.  As noted in the article, "As of the end of 2013, the global game market was estimated at $117 billion, of which Korea accounted for 6.3 percent or $7.3 billion. It’s the fifth biggest market in the world trailing the United States (19.1 percent), Japan (15.8 percent), China (14.8 percent) and the United Kingdom (7.9 percent). Considering the size of its population, Korea’s game industry is particularly active and robust. Korean game companies have shown exceptional strength and competitiveness in online games compared to video games or PC games. In fact, Korea is the second largest online game market in the world after China with a 21.3 percent market share. Its contribution to the nation’s economy also commands respect. Among the $1.4 billion in content that was exported overseas in the second quarter, games contributed 62.5 percent - more than music and movies combined."
As shown by the accompanying graphic, (click to see a larger version) the strong trend in Korea's game industry, as globally, is toward mobile games.

Open innovation a turning point for R&D collaboration?

In retrospect, as detailed in a report by Business Korea, many plans by large global IT firms to establish R&D centers in Korea turned out to be empty promises.  The article noted that "According to industry sources on Nov. 13, most foreign firms have failed to fulfill their promises to set up R&D centers and make investments in the country. Even if R&D centers were created, they did not play a significant role, ultimately leading to shutdowns after only a few years. Or, they have been merely used as a place to test products." The article went on to note that Huawei's recent announcement of its plan to set up an R&D center in the nation has raised suspicions once again. "Industry analysts are saying that Huawei's announcement can be interpreted as a conciliatory gesture to the Korean government to target the local market, following its recent entry. In the end, the announcement turned out to be merely a possibility that the Chinese Android device maker will consider building an R&D center with the Korean government's support."
On the other hand, as reported by The Joongang Daily "The governments of Korea and France decided to conduct jointly funded R&D projects to develop software and parts for driverless cars, wearable devices and digital medical devices. The projects will start next year with 3 billion won ($2.7 million) from the two countries and 10.3 billion won from the European Commission’s Eureka program fund." The article quoted Hwang Gyu-yeon, assistant minister of industrial creativity and innovation at the Ministry of Trade, Industry and Energy as saying that “Open innovation through international technology cooperation is a must to survive in a time when global technology competition is heated than ever before. So far, the Korea-France relationship was mainly based on Korea’s unilateral importing of advanced technologies,” he added. “But through today’s cooperation, I hope the two countries can benefit from each other’s technological strengths.”
The digital network revolution along with the rise of big data, citizen science and more mobile, ubiquitous networks seems to be pushing government, corporate and public institutions toward more open sharing of data and research aimed at innovation!  It will be difficult, if not impossible to turn back this tide.

Persistent, excessive regulation: mobile payment problems and Active-X

I've repeatedly noted my astonishment that financial and e-commerce institutions in Korea continue to use Microsoft's Active-X controls, years after Microsoft itself issued public warnings about the dangers of using such controls.  Today The Chosun Ilbo carried an article entitled "Apple pay shows up clunky mobile payment in Korea."  The article notes that "Apple Pay is simple to use by placing a finger on the home button after registering the owner's fingerprint and checking out at the register. There are no spending limits.But in Korea, mobile payment is as usual more complicated. With LG Uplus' Paynow service, users have to go through a five-step process to buy a product at an off-line store. They need to install and run the app on their smartphone, enter a password, choose the type of settlement and show the cashier the bar code that appears on the smart device. On the surface, Bank Wallet Kakao by Daum Kakao is as simple as Apple Pay. But the service is prepaid, which would seem to defeat the object, and users need to sign up via a personal computer in advance. The reason is that it requires a security program like ActiveX, a buggy and antiquated Microsoft program that for some reason still holds sway here, to verify users' ID."
As the article goes on to note, the inescapable conclusion is that excessive regulations are responsible for this situation. "The Financial Supervisory Service and Financial Services Commission are worried about security. One program developer said, "Even the most innovative ideas end up getting axed or modified beyond recognition after they go through the FSS's screening process. Financial authorities are virtually blocking fresh endeavors." But an FSS official rejected the blame, "We are trying to minimize security risks in order to prevent illegal use, leakage of personal financial information and identity theft." The official admitted that the FSS checks a whopping 55 criteria."
The accompanying graphic is a screen capture from Microsoft's web site. (click to see a full size version)  Note the advice given in the last sentence on the graphic. "Here's a good rule to follow: If an ActiveX control is not essential to your computer activity, avoid installing it." When will Korea remedy this situation?

Smart students and smart TV

I'm in Seoul to participate in today's Smart TV Global Summit, an annual industry gathering (click on the screen capture of the conference's English web page to see a full size version).  In preparing my presentation for this meeting, I've been thinking about what "smart" really means and how it may be understood in various ways across different cultures.  Coincidentally, today is also the occasion for Korea's annual College Scholastic Ability Test.  In this country, a high score on this exam is a sure indicator that a student is "smart" and can be the ticket to admission to one of the top universities.  As reported by The Korea Times, 640,000 students will take the exam at 1,216 venues. The article goes on to explain that "Tens of thousands of police officers, police vehicles and taxis will be on stand-by near test venues to help students arrive on time. The government also plans to increase the number of subway trains and buses running in the morning.Civil servants and employees of major companies in most cities will be allowed to report to work at 10 a.m., one hour later than usual, in order to relieve traffic congestion.Banks and the stock markets also decided to delay their opening times by an hour, to 10 a.m."
Having lived in Korea continuously since 1996, I was aware of these special arrangements on the day of the CSAT, and also knew that all the major news media devote a great deal of attention to it. However, I was not as cognizant of the commercial bonanza that the annual CSAT offers to retail establishments here. According to The Joongang Ilbo, "Today’s dreaded college entrance exam may be the most important day of the year for students, but it’s the days after the test that matter to retailers.Preparing for the College Scholastic Ability Test throughout high school can be so grueling that parents of 12th graders are willing to spend generously to please their stressed-out children after the test.Plastic surgery clinics, online gaming websites, retail outlets and restaurants are ready to capitalize, launching special offers for test-takers."

Smart phone developments affecting Korea

According to a report in The Chosun Ilbo this morning, wealthy people in North Korea prefer foreign smartphones, as shown in the accompanying screen captures from North Korean Central TV (click to see a full sized version.  The article noted that "High-end Western smartphones are all the rage among women traders in North Korea's thriving open-air markets, a source said Friday. Seventy percent of all cell phones in North Korea are concentrated in Pyongyang, the source said, and North Koreans now prefer imported gadgets to locally manufactured ones. iPhones and Samsung smartphones have become symbols of wealth, with two out of 10 female traders now flaunting imported phones, according to the source."
If such reports are accurate, they would be in line with the global trend toward commoditization of smart phones, which are essentially modular in nature and tend to become cheaper, more powerful and more portable (lighter weight) all the time.  Such changes help to explain why Chinese manufacturers have recently cut into Samsung Electronics share of the global smartphone market.

They also explain why, as reported in The Korea Herald, Samsung is planning to build a second smartphone plant in Vietnam. The article notes that "Samsung Electronics has been approved by the Vietnamese government to invest $3 billion to build a smartphone manufacturing center in the Southeast Asian country, according to the tech giant and local news outlets. The new factory will be built in Thai Nguyen province, north of Vietnam’s capital Hanoi, where the South Korean tech conglomerate has been operating its first smartphone plant in the country since last March. (click on the accompanying graphic for a full sized version) Samsung Electronics invested $2 billion to build the first smartphone factory, which has about 16,000 employees producing and assembling 120 million low-cost phones a year targeting developing markets.