A large number of local information, communications and technology companies ― mostly small and mid-sized contractors ― called on the government to help them gain an edge over their foreign counterparts.
Science, ICT and Future Planning Minister Choi Mun-kee urged the companies to first secure quality and price competitiveness so they could get more government subsidies.
“The government cannot (promote the entry) of companies with substandard quality or price competitiveness,” Choi said, adding that officials were not in a position to hand out the favors that some companies appeared to want.
His remarks came during a closed-door meeting held Friday with chief executives of some 20 ICT equipment providers, buyers and public organizations to discuss ways to promote the ICT device industry, such as network and broadcasting equipment, and computing infrastructure such as server, storage and data centers.
Officials from the three major mobile network carriers SK Telecom, KT and LG Uplus were also present.
Choi also admitted at the meeting that the central and local governments had reason to rely heavily on foreign ICT equipment, although he did not come right out and say it was due to quality.
The statement came as the industry was already abuzz with criticism that the government was favoring foreign companies such as IBM, Oracle and HP due to their brand power supremacy ― and not quality, performance or even prices.
It has also long been a bone of contention that private buyers and public organizations have been busy trying to pare down prices of domestic contractors.
The minister acknowledged that foreign companies such as Cisco Systems and Huawei receive support from their respective governments, but said Korea could not follow in their footsteps to indicate Seoul would not be offering similar subsidies.
Meanwhile, the head of a supercomputer maker surnamed Kwon called for a joint project led by the government and private firms, noting that the 150 billion won ($135 million) domestic supercomputer market was being entirely dominated by foreign companies.
“Supercomputers are used in manufacturing, finance, energy, biotechnology and especially by state-funded research institutes in Korea. All the state-funded research institutes including the Institute for Basic Science and the Korea Aerospace Research Institute only use supercomputers made by foreign makers,” said the president, complaining that his firm is on the brink of bankruptcy due to dominance of the foreign makers and lack of government support.
He also called for reviving a government project under the Lee Myung-bak administration aimed at replacing foreign workstations with domestic products.
Receiving loans from Korean banks was cited as another difficulty for small businesses in exporting and promoting their products.
Officials from the three major mobile network carriers SK Telecom, KT and LG Uplus also said they would help the SMEs in supplying and exporting their products.
The ministry plans to announce a detailed plan for the ICT manufacturing sector on Wednesday.
The plan will likely include measures for attracting global talents to the SMEs, financial aid and government-led joint projects.
A panel to respond to patent dispute is expected to be established, the ministry added.
By Kim Young-won (firstname.lastname@example.org