IT in Korea
IT Financing
Use of FDI (Foreign Direct Investment)
Generally, investment conditions are being improved.
The government stimulate foreign investment in IT industry by deregulating
existing regulations and raising foreign ownership ceiling. Foreign
investment in the domestic telecommunications industry has been growing
since 1994. Amount of foreign
investment on the telecommunication industry between January 1994 and December
1997 was $1.37 billion, 5.6% of total FDI.[77]
Venture Capital
The number of venture firms which are newly established,
especially IT related and high-tech companies, is increasing dramatically.
The number of new venture firms set up in January 1999 totaled 2,286 and
2,696 in June 1999. The drastic increase in the number has been attributed
to a boom in venture busineeses with the KOSDAQ market heating up.
Approximately, 20 percent of the new companies are communication equipment
and software technology-related venture firms. These venture firms
attract overseas for greater in investment and fortune.
Large conglomerates, such as Samsung, Hyundai, LG,
and SK, are accelerating investments in venture companies to break from
existing industries which concentrate on core business and have reached
their growth limit.
Government also have a plan to eliminate various
restrictions on venture firm start-ups, and soften regulations governing
ventures firms and capital.
Government Support
Since the explosive growth of IT industry in the
1980s, the government has invested in IT industry to respond to changes
in the market environment and technology. The government provides
the funding for the development of technology. The government finances
both the government and the private sector. The spending for R&D
investment was 230.3 billion won in 1998. Currently, the government
focuses on incubating venture firms, and its R&D programs on wireless
and satellite communication, software-related technology and high-speed
transmission technology. [76]
This report was completed in December
1999 for the class
Impacts of National Information Technology
Environments on Business
taught in the program of the MOGIT
(Management of Global Information Technology)
at the
Kogod School of Business at American
University in Washington, D.C.
