“K-standard”, which is based on South Korean companies’ competitive edge in digitalization, has found new opportunities during the past year of the COVID-19 crisis. As the South Korean government and South Korean companies have made quick actions against COVID-19, they have been able to minimize impact from the COVID-19 pandemic. This calls for bold regulatory innovations and investments from the South Korean government in order to continue to spread achievements of K-Standard even during the post COVID-19 era when digital transformation will continue to accelerate.
Wednesday will mark the first year since the first confirmed COVID-19 case was found in South Korea. South Korea faced three major waves of COVID-19 in the past year, and its confirmed cases have ballooned to 73,115 people on Tuesday. Although there had been many difficulties due to consecutive orders for social distancing, South Korea has found opportunities in contactless economy and digital economy through K-standard.
“K-quarantine” is a prime example of “K-standard”. Due to rapid tests in large quantity and rapid tracing and appropriate treatment and hard work from medical workers, confirmed cases and number of deaths per 100,000 people in South Korea were 136.45 people and 2.31 people at the end of January 14 which were the third and second lowest numbers respectively out of OECD (Organisation for Economic Co-operation and Development) countries.
Although South Korea is facing significant economic damages such as closures and job loss from COVID-19, K-quarantine has minimized further economic damages. The fact that the OECD marked South Korea’s economic growth rate in 2020 at -1.1% and placed South Korea at the top of OECD countries is related to K-quarantine.
South Korea’s software (SW) industry is responding to new markets such as teleworking and online teaching with their contact-free tools and cloud services. Immersive technologies such as VR and AR that had been making very slow growths have emerged as tools that raise effects of contact-free communication methods and created new demands.
“K-manufacturing” such as semiconductor and display that have been the foundational support for the South Korean economy has made great achievements despite the economic crisis stemming from COVID-19. The amount of semiconductor exports in 2020 was $99.2 billion which was a 5.6% increase compared to 2019 and was the second highest amount ever in South Korea’s history. It is estimated that semiconductor exports will bring in $109.3 billion in 2021. These performance and estimation are due to global recognitions of South Korean technologies and increased demands regardless of COVID-19.
South Korea’s distribution industry is an industry that rapidly pushed for digital transformation as the center of services transitioned from offline to offline. The total amount of online shopping transactions between January and November last year was around $131 billion (145 trillion KRW) which was a 18.4% increase compared to 2019. The logistics market including delivery services also made a rapid growth due to a rapid increase in delivery application uses. However, recovering competitive edge of offline distribution channels that have faced a direct hit from COVID-19 is still remaining as a task that requires actions.
Online classes that have been taking place for the past year are presenting a future image of education in South Korea. Although it is difficult to cultivate sense of community through online classes, they have shown that they can replace offline classes when it comes to learning knowledge. This is the reason why there will be times when online classes will take place along with offline classes even during the post COVID-19 era.
South Korea’s abilities in digitalization are the key reason why K-standard has found new opportunities in the midst of COVID-19. Out of OECD countries, South Korea is at the top when it comes to broadband infrastructures and digital government index.
Speed of digitalization has become much faster due to the South Korean government’s Digital New Deal. According to the Ministry of Science and ICT, there was an 85% increase in number of non-ICT (Information Communication Technology) companies that had gone through digital transformation through AI, data, and cloud in 2020 compared to 2019.
Another task that is left for the South Korean government to do this year when the current COVID-19 situation is expected to calm down due to vaccines is to continue to spread K-standard centered on the country’s competitive edge in digitalization. The government needs to be active in investing its budget early and carrying out regulatory innovations. It also needs to work on development of fundamental technologies, integration of industries with technologies, and expansion of soft power.
“Although success of K-bio companies is encouraging, we still need investments in development of fundamental technologies as the success is centered on production rather than development.” said Lee Byeong-tae who is a professor at KAIST. “As digital economy is upon our footsteps, the South Korean Government needs to provide support for industries so that they can be integrated with technologies rather than being centered on manufacturing and cultivate soft power that includes culture and language.”
Min Won-ki, who is the president at SUNY Korea and a former minister of the Ministry of Science and ICT, said that there would be many changes to how people work and how people are hired during the post COVID-19 era from acceleration of digital transformation and that companies need to establish different business strategies according to these changes. He also emphasized on importance of safety of digital ecosystem including cyber security as impact from a systematic collapse becomes bigger as the society becomes more dependent on digitalization.
Staff Reporter An, Hocheon | hcan@etnews.com