Sweet Dreams on the Internet?Korea is a nation enamored with the Internet. This could be the driving force behind the future of Korea's economy, no doubt one for the N-Generation (The N for Net).
There's something missing, though. Let's call it a balance of payments.
A trade surplus is expected this year, but there are clear signs of a rise in imports that is already threatening next year's balance sheet. The crowding of capital and manpower in the telecommunication market cannot be the solution.
In the U.S., English-based websites are inherently export-oriented. However, Korean language-based websites have their limits. In Korea, there are hardly any Internet venture companies providing services in English and Chinese, except sites like ipopcorn.com.
Furthermore, there are far fewer venture companies based in technology. In other words, the current domestic infrastructure for venture companies is technologically lagging and based in the Korean language, not fit for export.
There have been domestic venture companies that set their sights abroad,but so far, their performance are beyond its expectation.
Korea is expected to spend $150 million on imports, while exporting $160 billion, $140 billion from ---- goods.
Semiconductors that took the biggest piece of the import pie (13.5 percent), exceeding crude oil (12.3 percent). Despite the fact that Korea exports memory chip semiconductors, it also imports non-memory chip semiconductors, including core chips used in cellular phones. Thus, the critics point out that the telecommunications hype is nothing more than an 'import inducer'.
Korea must realize that the number of foreign investors prepared for direct investment, is far from enough.
Despite all the hurrahs over the revolutionary telecommunications era, people should also bear in mind the above concerns.
The answer lies in balance. Venture companies must come up with ideas and business models that would encompass, not only the domestic market, but also international markets.
Established companies should stop opposing venture companies, but rather, learn to link the the two together, through telecommunications and traditional management.
The government has its share of problems.
For instance, back in the 1997 presidential election, both ruling and opposition parties proposed an information-based industry as an alternative for the Korean economy. Not a bad idea at all. Unfortunately, the change was made too suddenly.
With Korean conglomerates collecting $43.5 billion from the Stock Exchange to meet debt equity requirements, it's no wonder stock prices have plummeted.
The future does lie in the vision of the N-Generation, but while they enjoy the benefits of the Internet, there may be hidden dangers.