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[VIEWPOINT]Software Theft Harms Korea's Industry

Crackdowns on illegal software spur complaints, but are essential for a robust local industry.

Mar 30,2001
The government recently launched its largest crackdown on illegal software since 1999. As the crackdown proceeds, domestic corporations are complaining that they are the sole objects of the crackdown. They have also grumbled that foreign-based software makers are using the resulting increase in sales of legitimate software to maximize profits by furtively increasing prices.

If the Korean public really wishes to see this nation build an advanced information society, they must accept the fact that tackling illegal use of intellectual property is an essential task for developing the nation's information infrastructure. The fact that legitimate software sales rise significantly during crackdowns on software piracy is proof of the widespread appropriation of intellectual property. Although some people criticize the government for indirectly promoting software companies, this regulation should be understood as returning the benefits reaped to the rightful recipients: the software manufacturers themselves.

Part of the value of software lies in the fact that it will be used as a means of production to create new added value. Let us think about whether it is right to utilize a basic production tool free, expecting our own products to roll off the production line to be sold in the marketplace.

The main problem with the crackdown is that software is too expensive. Also, most of the software illegally appropriated is foreign-made. It seems the general public resents the rapid sales increase of foreign software corporations. But in the long term, is it really going to be beneficial for us not to pay for use of intellectual properties? The United States earned $100 billion in patent license sales in 1998, up from a mere $15 billion in 1990, and the figure is expected to grow to $500 billion in 2003. Competitive nations in the knowledge industry will garner astronomical sums of money from all over the world, and as time passes the market will grow even further.

There is only one way to reduce the gap between Korea and countries with developed software industries: Promote Korea's own knowledge industry. Adopting a step-by-step approach, although it will take time, is necessary in order to achieve growth. When a market is formed, people eager to earn money will naturally respond. Domestic firms cannot grow if there is no domestic consumption. For instance, the rapid growth of the game industry was a response to the demands of the market. The current rise in software outlays, which was brought about by the crackdown, will be paid to overseas manufacturers. And it may be inevitable or it may be a transient phenomenon, but when Korean corporations become capable of replacing foreign products with their own and penetrating foreign markets, the possibility of earnings in the global market will increase.

To stimulate and promote software corporations and cut expenses, firms should use Korean products even if they are not yet completely satisfactory. This is not a patriotic gesture, but one that will guard against the bitterness of domination by superior foreign products in the domestic market. The reinvestment, needed for domestic corporations to expand is only possible when a market is secure. If every sector of the software industry is assured a market, then software will truly become one of Korea's chief industries.

Microsoft Word, which costs more than 400,000 won ($307) in the United States and about 200,000 won in China and Japan, costs only 20,000 won in Korea, because here it has a competitor - "Hangul," a word processing program made by a Korean corporation. Manufacturing a large number of alternative, competitive software programs is the way to secure national competitiveness and halt the squandering of foreign currency. We all should acknowledge that crackdowns on illegal pirated software are essential to the healthy growth of the infrastructure of a competitive nation in the information age.

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The writer is the CEO of Haansoft Inc.

by Jhun Ha-jin




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