The growth of South Korea’s big data industry is being hampered by strict regulations on personal data and lack of understanding of the technology, industry analysts say.

The global big data market, which is expected to stand at around $27.3 billion this year, will more than triple by 2026, according to market research firm Statista. 

However, tech-savvy Korea is still far behind in this industry. The local big data market was worth around 262 billion won ($239 million) last year and companies’ adoption rate of the technology was less than 5 percent, according to the state-run National Information Society Agency.

Strong regulations on the use of personal data is cited as a key reason for the slow growth, experts said.

“Since big data became a buzzword in around 2010, there have been a series of information leaks at banks and financial institutions. The data spills have made regulations stricter and the public shun offering information,” Park Jae-hyung, an analyst from KT research and economic institute, told The Korea Herald.

Growing concerns about personal data leaks have made it difficult for companies to even use unidentified information for analysis, he added.

Last year, only 9.6 percent of Korean companies -- with more than 100 billion won in sales -- adopted big data systems, according to a survey by the ICT Ministry. More than 65 percent of the companies said they did not even discuss adoption of the technology.

“Korea’s regulations on using data is stricter than advanced countries. To grow the big data industry, the government should shift its policy from regulating data usage to strengthening data security or holding companies more accountable when data is leaked,” said Lee Sung-ho, an analyst from Science and Technology Policy Institute’s future research center.

Companies should also change their perception of big data technologies, experts said.

“Company chiefs and management have a misperception about big data technologies. Many of them view big data as a decision-making tool so they do not adopt the system in the first place and rely more on their feelings,” said Lee Sang-won, a professor of Wonkwang University’s information and e-commerce college.

“However, big data is not a decision-making tool, it is a good reference tool to help their decision-making more accurate, he added.

Alongside the private sector, the government should also push to take advantage of big data technologies in the public sector.

Although the government has been seeking open administration inspired by the big data boom, few projects appear to have made achievements yet. The night bus operating system made in collaboration with KT and Seoul government is one of the only few examples.

The reason behind this is that government officials are not well-trained in the technologies and have no proper guidelines so that they just use random data and figures, said Cho Wan-sup, an information security management professor at Chungbuk National University.

“In order to improve the utilization of big data in the public sector, there should be proper guidelines about data filtering and security issues, and the training of government officials,” he added.

By Shin Ji-hye (shinjh@heraldcorp.com) and Song Ji-won (jiwon.song@heraldcorp.com)