Korea is a world leader in information technology (IT), producing and exporting an enormous number of IT-related products and developing state-of-the-art technologies as well as using a vast number of Internet and mobile telecom devices. Computer chips and IT products such as mobile phones account for 30 percent of total exports and nearly every citizen has a mobile phone. Almost every aspect of the daily lives of Koreans from dining out to public transportation is linked to computers not to mention high-speed Internet connections in nearly every home.

The reason why Korea's semiconductors, mobile handsets, thin film transistor liquid crystal displays (TFT-LCDs), digital TVs and Internet games sweep the world market is because of three major breakthroughs - services that create new demand within the market and construction of infrastructure that enables full utilization of services in addition to machinery with innovative manufacturing abilities.

In introducing new services, the government makes efforts to sustain competition in the industry in the course of issuing licenses to operators, deciding service methods, allocating frequencies, legislating a legal framework, and promoting pilot projects. Since 2004, the Ministry of Information and Communication has been promoting the IT839 Strategy which focuses on the introduction of eight new important services for the development of the IT industry, early establishment of three basic systems required for continuing progress and promotion of nine new growth engine projects.

Korea shows off WiBro (Wireless Broadband Internet) at the Winter Olympic Games in Torino

The eight new services involved in the IT839 include wireless broadband (Wi-Bro) or wireless high-speed Internet services, digital multimedia broadcasting (DMB), home networks, telematics, radio frequency identification (RFID), wideband code division multiple access (W-CDMA), terrestrial digital TV (DTV) and Internet telephones. The Ministry planed to set up a nationwide Terrestrial DTV network by 2005, secure four million Internet telephone users by 2006 and also started commercial service of WiBro and DMB in the same year. In 2007, it plans to provide a home network to 10 million households, secure ten million telematics users and increase the use of RFID by minimizing the size and bringing down prices. Such efforts have started to pay off. Wireless broadband Internet (WiBro) and digital multimedia broadcasting (DMB) technologies were developed in Korea for the first time in the world and have been adopted as global standards. This success has laid a foundation on which Korea can lead the global IT market. Korea's image as a global IT leader was promoted worldwide with the WiBro demonstration during the 2006 Torino Winter Olympics and a pilot DMB service was used in the 2006 FIFA World Cup in Germany.

Furthermore, Korea's rank in the information society index rapidly rose from 22nd in 1998 to 12th in 2003 and to 3rd in 2005. Most recently, the International Telecom-munication Union has announced that Korea is the top ranking country in the Digital Opportunity Index, which assesses development of the overall IT sector. This achievement has encouraged global IT companies to establish R&D; centers in Korea. As of 2005, a total of ten renowned companies, including Intel, IBM, Fraunhofer and Microsoft, had opened R&D; centers in the Republic to conduct joint research projects and develop advanced human resources. In addition, for the first time, Korea succeeded in hosting a UN-affiliated organization, the ESCAP Information and Communications Technology (ICT) Center.

From 2001 to 2004, Korea saw rapid changes in the IT sector. Broadband Internet subscribers increased from 7.81 million to 12.19 million. The number of Internet users jumped from 24 million to 35.18 million. The number of PCs increased from 22.5 million to 26.2 million. Although a smaller number of IT venture firms were operating in 2004 (7,967) than in 2001 (11,392), the number of IT employees rose from 480,000 to 670,000. Total production in the IT sector increased from 150 trillion won to 230 trillion won, accounting for 13.8 percent of real GDP in 2004 (10.1 percent in 2001). Exports in the IT sector almost doubled to $93.7 billion from $48.4 billion, bolstering the trade surplus from US$15.5 billion to $43.9 billion. From 2001 to 2004, the number of fixed-line phone subscribers remained almost unchanged while that of mobile phone subscribers skyrocketed from 29.06 million to 36.58 million.