Toward a new age led by software

“Whoever commands the sea commands the world,” said Sir Walter Raleigh, who founded the first British colony in the New World discovered by Christopher Columbus. In the Age of Discovery that began in the late fifteenth century, dominating the sea and the naval trade routes meant commanding global wealth. In the 21st century, driven by high-tech information and communication technology, what commands the vast sea of knowledge and information? It is software technology.

Just as all roads led to Rome, all industries and technologies on earth lead to software. Software is invisible, but its influence is tremendous. In the 1990s, only 15 percent of the top 100 companies with market capitalization were software companies. Some 20 years later, it went up to 37 percent. The size of the global software market is $1.22 trillion in 2013, four times the semiconductor market and 1.5 times the automobile market. In 2014, software companies competed for the top spot in brand value: Apple in first place, Google in third and Microsoft in fourth.

However, in Korea, where small businesses with less than 1 billion won ($963) in annual revenue make up 45 percent of the market, software companies are small and lack core technological competitiveness, and they cannot afford to target the global market. Moreover, software piracy and lack of understanding of the software market’s value hurts companies’ earning structure, and the companies cannot make sufficient reinvestment, and elite software engineers avoid Korean companies.

In order to break the vicious cycle, the Korean government has been promoting a project to develop competitive software products, and has confirmed the potential for a global market in construction design, automatic translation and voice recognition.

However, government policy does not guarantee immediate success. We can succeed when the government keeps the balance from the center of gravity and industry, academia and research institutes work together and continuously target the global market. I wish for domestic software technology to sail across the high seas in the new Age of Discovery of the 21st century.

BY Lee Sang-hong, Director of the Institute for Information and Technology Promotion