Service-Driven Growth Pattern In IT Industries And Contributing Factors:A New Pattern In The Korean Industrial Development Perspective

Abstract

This paper examines the pattern behind rapidly growing Korea’s IT industries. Korea has characterized economic growth based on export demand rather than domestic demand at the traditional industries such as automobile, electronics, steel, and shipbuilding etc. However, the recent development of IT industry is indicating a different aspect from traditional sectors. The rapid growth in service demand is becoming a key factor in the rapid growth and high competitiveness of IT industry. A statistical estimation testing relationship between mobile telecommunication, Internet service, and wireless equipment, computer, strongly supports service-driven growth pattern of IT industry. Strong network externalities in demand side, government’s demand promotion policies, residential environment, and users’ preferences, are main contributing factors to this new growth pattern.