(LEAD) S. Korea to spend 189 tln won to strengthen IT sector

(ATTN: UPDATES with more details, comments in paras 5-6, 10-13)
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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