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With sense of crisis, Korea braces for software war

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Published : 2011-08-23 19:23
Updated : 2011-08-23 19:23

Korea’s information technology industry is facing crisis after enjoying a top spot for about 20 years with the government only stressing hardware and thinking less of software.

Following recent mergers of global firms, such as Google’s acquisition of Motorola and Hewlett-Packard’s takeover of Autonomy, a government official told reporters Monday that the government will form a consortium with local electronics firms to build the country’s own new open-source operating system for wireless devices.

“Even Samsung Electronics is sensing the crisis, especially after the announced merger of Google and Motorola,” said Kim Jae-hong, deputy minister at the Ministry of Knowledge Economy.

“We will form a joint consortium involving the establishment of the new mobile OS in the latter half of this year and implement the plan together with Samsung and LG Electronics.”

The announcement comes as local electronics manufacturers feel threatened by the fact that Google could soon jump into the hardware manufacturing business with the help of its partner Motorola, the company that invented the first mobile phone.

HP’s move to acquire British software firm Autonomy for over $10 billion also signaled its shifting focus toward the global software industry, urging Korea Inc. to look into the importance of the long-neglected field of software development.

According to a report released by the Samsung Economic Research Institute this year, Korea was placed No. 14 among 19 OECD countries in terms of software industry competitiveness.

The software application rate in industrial production also recorded to be merely a third of the figures of advanced nations.

“None of the local software firms’ sales have topped 100 billion won for the past decade,” said an industry source who wished to remain anonymous.

Multiple sources said the tight work schedule, endless late shifts and the unfair treatment of software developers were among the most troubled issues for the group.

“Those working in the hardware sector come up with a product they could present in the end of the project, which is rarely the case for software developers,” said a source who recently changed jobs to business planning from a software developer role.

“Even if that’s the case, many of the developers are forced to produce something that is visible for their customers and this makes the process inefficient in many instances.”

In a survey conducted by the Korea Software Enterprise Association earlier in 2009, only 6.4 percent of the software developers at small and mid-sized firms said they would recommend the job to younger people. The survey was answered by 248 people working at companies developing software for large enterprises.

Of them, 41 percent said they would not recommend working in the software industry because it is considered to be a 3-D workplace ― dirty, dangerous and difficult. Over 33 percent said developers were not receiving appropriate treatment.

Although more than 65 percent said they received less than 50 million won in yearly income, 129 software developers, or 52 percent, said they work an average of 10-20 hours on late shift every week.

“The data may be a few years old, but the situation has not changed much (for developers) since then,” said another industry source.

In Korea, there are estimated to be about 150,000 people in the software development industry and the current size of the software industry is calculated to be around $21.3 billion, coming in at No. 10 out of 19 OECD countries.

By Cho Ji-hyun (sharon@heraldcorp.com)