The perils of over reliance on manufactured products exports in ICT

My lack of posts this month is largely because I've been working on the second edition of my book, Digital Development in Korea (with Dr. Oh Myung).  Depending on Routledge's production schedules, it should appear in 2019. One chapter of the book deals with long term trends in Korea's ICT exports, including the "super cycle" in semiconductor (integrated circuit) exports during 2017 and 2018.  Consequently I was struck by yesterday's article in The Korea Times entitled "Samsung, SK Hynix bracing for global chip downturn."

Industry data show that the global market for semiconductors has already begun to decline, as shown in the graphic (click for a full size version).  The article quotes a Statistics Korea executive as saying that 

"Orders from data centers have recently been falling off while smartphone production has been stagnating, resulting in falling demand for DRAM for servers and memory chips for mobile phones."  It also notes that the downturn in the chip market is likely to deal a blow to the Korean economy because semiconductor exports account for more than 20 percent of total exports.
The Korea Times article seems like a fitting topic for my lone post of December.  As the year comes to a close, it is well for Korean policymakers to remember that more than three-quarters of the global market for ICT products is made up of software and services.  The challenge for this country in 2019 and beyond lies in those areas, not in continued reliance on hardware manufacturing and export.

Bixpo Exhibition: Energy transition and digital transformation

The Korea Joongang Daily carried an interesting article today on the Bitgaram International Expo of Electric Power Technology (Bixpo), a forum organized by Kepco, in Gwangju on Wednesday. “Power companies around the world are facing an enormous historic change called an ‘energy paradigm shift,’” said Kepco CEO Kim Jong-kap during the opening of Bixpo. “The first major paradigm shift is the digital transformation, which will mean that our children will experience a world that is completely different from the one we have been living in.
“Big data, artificial intelligence [AI], the Internet of Things and other core technologies of the fourth industrial revolution are rapidly tearing down industrial boarders,” Kim said.
He said that such changes are forcing the electric power sector to be interconnected and fuse with other industries that it previously hadn’t thought of, such as the automotive, finance, construction and communications industries.
I'm teaching a graduate seminar this semester on "Digital technologies for disaster risk reduction," and we are discussing all of the technologies mentioned in the Joongang Daily article.   Personally I would argue that the industrial convergence noted by CEO Kim is part of the continuing third industrial revolution, driven by digital technologies, rather than a fourth such revolution as promoted by the World Economic Forum.

Seoul has the most economic clout of any capital city

With half of South Korea's population and a high concentration of its top industries, universities and schools at all levels, the following chart from Statista stands to reason.

Samsung Electronics growth stalls

As reported by the Korea Joongang Daily, Samsung Electronics growth (operating profit) stalled in the second quarter of 2018.  As noted in the article "The tech giant reported Tuesday that its operating profit for the April-June period was 14.87 trillion won ($13.27 billion), up 5.7 percent from the same period a year ago but down 4.9 percent from the previous quarter. Revenue for the second quarter tallied 58.48 trillion won, down 4.1 percent on year and 3.4 percent on quarter."  As shown in the graphic (click for a full size version), memory chips continued their strong performance while sales of smartphones and displays declined.

Speed matters: July 2018 update

OpenSignal just published an article/post entitled "Explaining the huge gap between fastest and slowest 4G upload speeds in the US."  As readers of this blog will know, I've posted frequently over the years (check these out) on the importance of speed (a.k.a. bandwidth) on the Internet.
The OpenSignal article noted that average 4G upload speed in the U.S. during the period from March 1 to May 29, 2018 ranged from 2.5 Mbps to 7.5 Mbps.  (click on the graphic for a full size version)

This made me curious about the upload and download speeds from my office here in the Incheon Global Campus.  So I did a speed test (click on the graphic for a full size version of the screen capture).
Draw your own conclusions, but I would submit to you once again that "speed matters"!

Korea's dependence on semiconductor exports

The Korea Joongang Daily has published a timely report on semiconductor exports that warns about the dangers of a nation being overly dependent on one product.  Semiconductor exports are expected to exceed $100 billion this year, while total exports are estimated to reach $605 billion. The newspaper article notes that "In a report released on June 22, the Hyundai Research Institute, a private think tank, said Korean exports, while on the rise, has a number of weaknesses including a heavy dependence on one product.
The report pointed out that the proportion of semiconductors to total exports in Korean has risen from 12.6 percent in 2016 to 17.1 percent in 2017 and over 20 percent this year."

Korea's changing patterns of social media use

As reported by the Korea Joongang Daily, Koreans have decreased their use of Facebook over the past several years, while increasing use of Instagram. (click on the graphic for a full size version)

North Korea is not Crazy: The U.S.-North Korea Singapore Summit

The Bulletin of the Atomic Scientists has just published two very different videos that provide essential context for understanding the recent summit meeting of President Trump and North Korean Chairman Kim Jong Un.  The first is an interview with University of Chicago history professor Bruce Cumings.   Like me, he first encountered Korea as a U.S. Peace Corps Volunteer.

North Korea is not crazy from www.thebulletin.org on Vimeo.

The second video was produced for the White House and shown at the summit meeting in Singapore.

"Destiny Pictures" — Singapore Summit video from www.thebulletin.org on Vimeo.

"Bit growth": Why Samsung and SK Hynix will invest $42 billion in semiconductors

As reported by The Korea Times, Samsung Electronics and SK Hynix will invest approximately $42 billion USD to enhance their semiconductor manufacturing facilities, mostly in Korea.  Semiconductors are perhaps THE core technology of the digital network era, and were targeted in the 1981 Long Term Plan to Foster the Electronics Sector in the form of the 4MB DRAM project.  Once Korea competitively entered the global semiconductor market, it never looked back.  Today, Samsung Electronics and SK Hynix are dominant players in the global market for both DRAM and NAND memory chips, as shown in this 2016 report by McKinsey.  As noted in that report, "Memory bit capacity is determined by two factors: capacity for memory wafers worldwide and the number of bits per wafer."   The industry has adopted the term "bit growth" to describe this phenomenon. 
For me personally, this brings back memories of a graduate seminar taught by Professor Edwin B. Parker at Stanford University in the late 1970s, where he explained Moore's Law in simple terms.   As Ed told us, the cost of storing one bit of information keeps decreasing as the capacity of semiconductors increases.   Today I understand more fully that "bit growth" means exponential increases in the human ability to store, compute and communicate digital information.  This phenomenon is at the heart of the digital revolution and is well understood by Korea's industry, government and academic leaders.  There is risk involved because semiconductors are now a commodity and subject to huge cyclical swings.  However, it appears that Korean leaders may once again be making a prudent investment in the digital future.

Fake news, search, and Korea's problem with portals

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Readers of this blog will know that I've posted frequently over the years about the continued dominance of Naver in Korea while Google became the dominant Internet search engine in all but a small handful of countries. (see these posts, for example)  To understand this dominance, one must first understand that, strictly speaking, Naver is a web portal and not a search engine.  This overwhelming preference among Koreans for Naver is also understandable because its content is almost entirely in the Korean language and is presented in a manner that fits well with Korean cultural preferences.   However, the almost-exclusive use of Naver by some also illustrates the Korean proverb "frog in a well."
The Korea Joongang Daily has published an informative article entitled "Debriefing:  Korea's problem with portals."   I recommend it.

To read James F. Larson's books and monographs

I've just revised my personal website (http://www.jamesflarson.com/) to include links that allow full-text PDF downloads of nearly all my books and monographs. One exception is Digital Development in Korea, my 2011 book with Dr. Myung Oh, which is still under copyright with Routledge.

Dr. Oh Myung: Leader and representative technocrat

Two events in the spring of 2017 call attention to the remarkable achievements of Dr. Oh Myung (Myung Oh in typical American style with given name preceding family name), widely acknowledged to be the "godfather" of South Korea's ICT-driven digital development.  As illustrated in the video (above) created on the occasion of Dr. Oh's induction as the first member of the CEAS Alumni Hall of Fame at Stony Brook University, his contributions extend far beyond the ICT sector.

In March of 2017 a ceremony was held to name a wing of the SUNY Korea complex "Oh Myung Hall" in honor of Dr. Oh's many achievements. (Click on the photographs for a full-size version.)

Korea leads world in penetration of industrial robots

Long-term pattern of South-North Korea dialogue

Korean telecoms companies to share 5G facilities and equipment

The project to build what is widely referred to as 5G (fifth generation) digital networks, more properly called "next generation networks," is attracting a great deal of attention these days, as well it should.   On a global level, this project is undoubtedly the largest engineered infrastructure project in human history.  Accordingly, it is very costly.   Hence the importance of the recent announcement here in Korea that, with government encouragement, the major telecommunications service providers would share the cost of installing 5G facilities and equipment. (see for example, this article in BusinessKorea)   This is an important development and one to watch closely.

Must viewing -- President Dwight D. Eisenhower's farewell speech from the White House

Time Magazine piece on Seoul and PyeongChang Olympics -- my interview

As readers of this blog will know, I've long been interested in the political impact of the Olympics as a global media event.  (See my many prior posts)
Some weeks before the opening of the PyeongChang Winter Olympics last month, I was contacted by a writer for Time magazine.  Olivia B. Waxman's article, in which my book (with Heung Soo Park) is cited, was published on February 8 and can be read at this link.  Of course, the story of Olympic diplomacy surrounding the PyeongChang Winter Olympics is still being written, so I anticipate future posts on the topic.

Robots, simulators help Korea's shipbuilding industry

An interesting article in The Korea Joongang Daily entitled "Robots, simulators help build Korean ships."  One can find the influence of digital technologies (a.k.a. information and communications technologies) in all industries, explaining why we are in the midst of a digital revolution. (click on the graphic for a full size version)

Korea's beloved Arirang folk song at the PyeongChang Olympics

A very interesting article appeared in The New York Times entitled "A tune heard often at these Olympics gets to the heart of being Korean."   The accompanying video contains a version of the song performed on KBS television.
The New York Times' article includes the following excerpt.  "In an 1896 essay, Homer B. Hulbert, an American missionary in Korea, wrote: “To the average Korean, this one song holds the same place in music that rice does in his food — all else is mere appendage. You hear it everywhere and at all times.” The same could perhaps be said about the song’s place at these Games. It has turned up as more than background music for the skating pair’s routine. It was played twice at Olympic Stadium during the opening ceremony. It has been sung in the stands at hockey games. And with all the interaction here between North and South Korea, it has served as a stand-in national anthem for the formerly unified countries."  The rest of the article is well worth reading.

Global television and the politics of the PyeongChang Winter Olympics

Three decades ago, the 1988 Seoul Olympics carried enormous political significance for Korea, as documented in my 1993 book (with Heung Soo Park), Global Television and the Politics of the Seoul Olympics. (full text PDF downloadable here from Google Books.)  Domestically, the 1988 Olympics played a key role in South Korea's political liberalization and democratization. Internationally and in terms of Korean foreign policy, they were the principal vehicle for President Roh Tae Woo's "northern policy."  That policy opened up diplomatic, economic and cultural relations with the Soviet Union, nations of Eastern Europe, China and Vietnam, all of which had been cut off from South Korea during the long Cold War.

It is too early to say whether the PyeongChang Winter Olympics, currently underway, will have such a profound political impact on Korea, but North Korea's decision to participate in the games, and to send a high level diplomatic delegation to them, provides a glimmer of hope.  In 2018 as in 1988, television continues to play a major role in the politics of the Olympics.  Three decades ago, the Korean Olympics were a mass media event.   Today television still attracts massive global audiences for events like the Olympics.  However, people are watching on multiple screens.  The Olympics have become a "bring your own device" showcase for 5G, digital phenomenon, as amply demonstrated in the PyeongChang Opening Ceremony on February 9.

PyeongChang 2018 -- 5G networks and speed matters

The PyeongChang 2018 Winter Olympics about to formally commence with the Opening Ceremony this evening, will give the world a glimpse into what next generation networks will make possible.  This post was prompted in part by the "2018 Adobe Consumer Content Survey," which was taken in the U.S. but doubtless reflects global trends.  (click on the graphic for a full size view) 
As regular readers of this blog already know, South Korea possesses the most advanced and fastest digital network infrastructure in the world.  Furthermore, the speed (aka bandwidth) of broadband Internet connections matters a great deal. (see my numerous posts over the years on the importance of speed)  Consequently, it is no accident that the nation has built a super-fast and dense network infrastructure in and around the sports venues and will utilize the 2018 Winter Olympics to showcase to the world the possibilities for next generation (currently 5G) networks.  Ironically, these world-leading network infrastructures have been built in the largely rural and mountainous Gangwon province.
This evening, I'm going to sit back and enjoy the domestic Korea telecasts of the PyeongChang Olympics Opening Ceremony, fully recognizing that this is the latest (Since London) in a series of "bring your own device" Summer and Winter Olympic Games.   The Winter Olympics, as one of the world's largest media events, will retain that status, but with a global audience that is tuning in via multiple screens and according to their individual preferences, as facilitated by mobile apps and social media.

Samsung phones and sanctions in PyeongChang

Samsung Electronics is a leading worldwide sponsor of the Olympic games and, as described in this 2014 post about the Sochi Winter Olympics, they regularly provide members of the Olympic family with complimentary late-model smart devices.  In the case of the 2018 Winter Olympics, just getting underway in PyeongChang, the provision of special Olympic Edition Galaxy Note 8 devices to athletes from North Korea and Iran raised an issue on the grounds that this might violate United Nations sanctions against these countries.   The Washington Post published an article explaining the issue and how it was dealt with by the International Olympic Committee (IOC).

Korea's R&D leadership and commitment to education

My last post noted that Korea continues to lead Bloomberg Innovation Index, one element of which is R&D intensity.  However, R&D intensity is not only an important element in innovation.  Perhaps more importantly it is one indicator of a nation's commitment to education, as I noted in a 2014 post. It is well worth updating the graphic from that post which was based on data through 2012.  As the accompanying graphic shows (click to see a full size version), by the end of 2015, Korea had matched Israel as the world leader in R&D intensity.  This long term commitment of money to support research and development says volumes about this nation's commitment to education, science, technology, and the solution of world problems.

Korea stays atop Bloomberg Innovation Index

Bloomberg has published its 2018 innovation index, and Korea ranked first followed by Sweden, while the U.S. dropped out of the top ten.  As noted by Bloomberg Technology, "South Korea remained the global-innovation gold medalist for the fifth consecutive year. Samsung Electronics Co., the nation’s most-valuable company by market capitalization, has received more U.S. patents in the 2000s than any firm except International Business Machines Corp. And its semiconductors, smartphones and digital-media equipment spawned an ecosystem of Korean suppliers and partners similar to what Japan developed around Sony Corp. and Toyota Motor Corp."  The U.S. ranked 11th.  The index is comprised of measures of R&D intensity, manufacturing value-added, productivity, high tech density, tertiary efficiency, researcher concentration, and patent activity.

Olympic diplomacy in Korea: A possible turning point?

Although I don't have time at the moment for a more detailed treatment of the subject, the news coming out of talks between North and South Korea is most interesting.   It confirms some of my speculation in earlier posts, after PyeongChang was awarded the 2018 Winter Olympics, that North and South Korea might possibly cooperate in hosting the Games. 
As reported today by the Chosun Ilbo, the two Koreas will hold a celebration at Mt. Kumgang (Diamond Mountain and the stuff of proverbs and lore in Korean culture.... "Even Diamond Mountain can wait until after eating") on the eve of the 2018 Winter Olympics.
Another part of this evolving story is the announcement that athletes from North and South Korea will train at the new Masikryong Ski Resort (click on the accompanying graphic for a full size version) in the norther half of Gangweon Province, built shortly after Kim Jong Un assumed power in the North.  In a separate story, the Chosun Ilbo reported on the shortcomings of ski-lift equipment at the Masikryong Resort, built while North Korea was under international sanctions that prevented import of a more modern ski-lift facility.
Can Olympic diplomacy continue and have an impact beyond the 2018 Winter Games themselves?  We shall see, but given the profound political impact of the Seoul Olympics three decades ago, the possibility that this may represent a turning point should not be discounted.

Sharing core 5G infrastructure: the Korea experience

An article in the Korea Joongang Daily today sheds light on some key issues involved in building 5G network infrastructure here in South Korea, which promises to have the world's first nationwide 5G mobile network. The article begins by noting that "Telephone poles, cable ducts and fiber optic networks - they’re the greatest assets for telecom companies vying to commercialize the next generation of wireless networking known as 5G, and carriers will fight to the death to hold onto them. The network, which promises higher speeds of up to 20 times existing LTE, has to be delivered on frequency bands with shorter waves, and to do that, mobile carriers say they have to build base stations closer together. This has caused tension between KT and other telecom companies because the former owns more than 70 percent of the cables on which base stations have to be built, but it has been reluctant to share."  The accompanying graphic (click for a full size version) provides details on the current ownership of core telecommunications infrastructure.
The government's deadline for setting up a nationwide 5G network is March 2019. Meeting that deadline will require agreement among the major telecommunication companies on how to share the fiber networks, underground cable ducts and above ground utility poles that form the core infrastructure for 5G. KT owns a majority of existing infrastructure in Korea by virtue of its former status as a public corporation owned by the government.
According to the article, "For now, the government has proposed three guidelines on how to share the infrastructure. First, each carrier should try to install its own infrastructure in regions with high data traffic. If such installation is not possible, for instance due to objection from landowners, or if a region has low data traffic, companies ought to share infrastructure. And if that’s the case, carriers should pay a reasonable price."

Korea leads the world: In reliance on social media for news

I've posted frequently over the years about the topics of news, the media environment, where and how people access news, and so forth.  If you doubt this, check out these posts from a search for "news."  My interest in these topics dates at least from the mid-1970s when I chose to focus for my doctoral dissertation on a study of U.S. network television coverage of international news.  Little did I imagine at that time that I'd be living in Korea all these years, and continuously from late 1996 to the present.
Korea today possesses the most advanced broadband network infrastructure in the world.   Consequently, it also serves as an important test bed for the world in terms of how citizens, corporations and other organizations react to the changed media environment (or ecosystem).  As shown in the graphic (click for a full size version), a new study by the Pew Center documents these changes.  Fully 80 percent of South Koreans get their news once or more a day from social media.  66 percent check online news more than one time a day.  The graphic speaks for itself, but I recommend reading more from the Pew Center study.

Year-end 2017 interview on TBSeFM

Last month I was interviewed on TBS eFM, a 24 hour all English radio station in Seoul.  The interview was part of the #Media in Check feature of the Weekly Review program hosted by Walter Foreman, who was joined by Jennifer Jin.   The discussion ranged over a number of media topics, including fake news and social media.  For those of you who may be interested, this file contains a copy of the interview which was broadcast on the last day of 2017.  Enjoy.

Network-centric digital development in Korea: An Update

With the PyeongChang Winter Olympics set to open in just over a month (note the bobsled in the accompanying graphic!) it is highly appropriate that my first post of 2018 deals with Korea's continued network-centric approach to digital development.
The network centric approach is nothing new for South Korea having originated with the start of the digital era in Korea way back in 1980-81.  For those readers interested in more detail,my article entitled "Network Centric Digital Development in Korea: Origins, Growth and Prospects?" was published recently by Telecommunications Policy as part of a special edition for the 40th anniversary of the journal.  It should be downloadable free of charge for another week or two at this link, courtesy of the journal.
The emphasis on building fast, state of the art networks as a core element of Korea's ICT sector policy shows no signs of abating any time soon. As reported by The Korea Bizwire and other local press, the Korean government and industry are planning major investments in 5G network infrastructure in 2018, on the order of $9 billion.  This should come a no surprise given the following realities.

• KT, the official communications provider for the PyeongChang Olympics has promised, from the start, to provide a "5G Olympics," as discussed in this post.   The broader political, economic and technological significance of the Olympics to Korea was a subject of many posts over recent years.
• Korea's commitment to building 5G infrastructure coincides with a similar government policy to build the world's first nationwide public safety LTE networks, a topic also discussed in several earlier posts.  Consequently, it was no coincidence that Korea chose to build the first phase of its public safety networks in PyeongChang, to meet both the networking demands of the Olympic games and the requirements of PS-LTE networks while taking advantage of the Olympics as a showcase for the world to see Korea's network technology in action.
• The ITU is scheduled to make a final decision on global standards for 5G networks in 2020.  Korean companies have been active with international partners and standards organizations.  As noted in The Korea Times last September have "bet big on 5G global standards."