[Robert J. Fouser] Learning from the history of IT in Korea

On my visit to Korea last fall, I was lucky to have enough time for many long walks in Korean cities. On a walk through central Seoul, I passed by Sewoon Arcade, the famous commercial-residential complex across from Jongmyo. In the 2010s, the city of Seoul pushed plans to preserve the complex, but redevelopment of surrounding areas is going forward. Since it was built in 1966, the complex dwarfed its neighbors, but the tall buildings going up nearby make it look strangely small now.

As I looked at the shrunken facade of the arcade, my thoughts drifted back to the late 1980s when it was the main electronics market in Seoul. The Yongsan Electronics Market opened in 1987 and quickly became the largest electronics market in Seoul. Both markets offered buyers access to the latest gadgets at competitive prices, which helped fuel the digital revolution that swept South Korea in the 1990s.

By the 2000s, South Korea became known as an “internet superpower” thanks to its high internet diffusion and fast speeds. Since then, the nation has maintained this reputation as a leader in early adoption of the latest technologies, from smartphones to the metaverse. The nation’s technological prowess has bolstered the “cool Korea” image that emerged with Hallyu and later K-pop.

For all its importance, the history of IT in Korea often goes unmentioned in discussions of the nation’s economic and social development. How did South Korea turn itself into an “internet superpower”? The question is particularly interesting in comparison with other advanced countries, such as Japan, that have fallen behind South Korea.

In looking at the history since the 1990s, two main reasons emerge: policy and mindset. In the early 1990s, PCs began to spread rapidly, and domestic internet providers emerged. The Asian Financial Crisis of 1997 that caused the nation to turn to IMF loans forced a restructuring of the economy. To spur economic growth and create jobs, the government began investing heavily in venture IT companies that focused on new technologies.

One result was the high-speed cable modem. By late 1998, cable modems began to spread rapidly, particularly in apartment complexes that could wire many households quickly and economically. South Korea soon jumped to the top in internet access speeds, which spurred the growth of web use faster than elsewhere in the world.

At the same time, the government supported companies that produced IT hardware, much of which was aimed at growing export markets. Samsung and LG, meanwhile, jumped into the booming mobile phone market and became leading producers by the early 2000s. After slow but steady growth, Samsung sales took off in the late 2000s, turning it into a global player.

A mindset, particularly that of a nation, is difficult to define, but the willingness to embrace change in South Korea has propelled the development of IT. The push toward industrialization beginning in the early 1960s brought rapid change to Korean society. A poor rural nation under dictatorship became an urban industrialized democracy 30 years later. In this process of compressed development, change was constant, and those who embraced it quickly did better than those who did not.

When PCs, the internet, and the web began to spread in the late 1990s, people jumped on the bandwagon for fear of falling behind and losing out. In the 2000s, this psychology played itself out in rapid adoption of mobile phones, smartphones and social media.

The same "fear of missing out" mindset influences decision-makers in government and business to be forward-looking compared to their peers in other advanced countries. They know that things are always changing, so instead of trying to keep change at bay, they embrace it quickly in the hope of using it advantageously. This explains the early push for digitization of government services and sensitivity toward the latest global IT trends in the business world.

The big question for South Korea is whether these two pillars of IT success will weather generational change. Compared to the boom years, the pace of change has begun to slow, which may make people less willing to embrace it. The young generation, which grew up in prosperity, avoids risk and prizes stability, though in social trends, FOMO remains strong.

As the young generation moves into decision-making positions, policy and business could become risk averse. This would sap Korea of the forward-looking dynamism that energized the IT and other booms, which risks sending it into quiet decline.

Robert J. Fouser

Robert J. Fouser, a former associate professor of Korean language education at Seoul National University, writes on Korea from Providence, Rhode Island. He can be reached at robertjfouser@gmail.com. -- Ed.