The Korea Herald is publishing a series of articles delving into the economic policies and tasks expected of the new Moon Jae-in administration. This is the second installment -- Ed.

South Korea’s new President Moon Jae-in faces the challenging task of bolstering the information and communication technology sector as the country struggles to retain its footing in the fast-advancing field of ICT amid growing competition from foreign rivals.

During his campaign trail, Moon pledged to spur growth through the digital economy by stripping away outdated policies, overhauling overregulation, open sourcing big data, expanding funding for startups and new innovation and other measures.

While it is unclear just how many of Moon’s stated pledges will translate into tangible policies that can positively impact the industry, hopes are high that the new president will help Korea become a front-runner in the global race for next-generation technologies. These include artificial intelligence, big data, cloud computing, ultrafast 5G networks, and the Internet of Things.

The digital economy, sometimes referred to as the “internet economy,” broadly refers to the economic activity that results from billions of everyday online connections among people, businesses, devices, data and processes via the internet and new mobile and computing technologies.

It is closely linked to the concept of the so-called “fourth industrial revolution” -- a key buzzword and selling point during this year’s presidential election that refers to a new era characterized by the merging of new technologies with everyday physical life.

In response to inquiries from Korea’s Digital Economy Association, consisting of the country’s biggest internet technology industry business groups, Moon and his party vowed to strengthen Korea’s digital economy, calling it the “decisive determinant of a country’s national competitiveness.”

Moon’s biggest pledge on this front is removing anachronistic policies governing ICT businesses and moving away from overregulation by adopting a “negative regulation” system.

The liberal president had promised to overhaul Korea’s “outdated policies” that have weighed down domestic IT companies in competing against foreign rivals that are not subject to such regulations.

“The most important task is to provide a fair competing ground for both domestic and foreign internet companies. Due to outdated local law, domestic firms have been subject to reverse discrimination,” Moon said, citing cases like stringent online advertisement regulations that have weighed down on domestic IT companies competing in the global market.

Moon had also sought the introduction of a “negative regulation” system for the IT industry. Korea’s current “positive regulation” system acts like a whitelist, laying out what it permits, and in theory banning anything not covered.

A negative system, on the other hand, acts like a blacklist, banning certain items. Using this approach, new businesses or services are considered legal as long as they are not expressly banned.

Adopted by countries like the US, the negative system is touted as a more open regulatory framework that offers more freedom to businesses in developing and introducing entirely new technologies and services currently unavailable in the market.

Another major campaign pledge from the progressive president involves big data. Moon promised to open source government-compiled big data for free access by developers and businesses, and to build a public big data center that can facilitate the collection and exchange of big data on a national level.

On the financial technology front, Moon promised to eradicate outdated digital authentication tools including Active-X plug-ins and digital certificates, long criticized as backward technologies. He also mentioned nurturing the emerging fields of digital finance including simplified payment services and peer-to-peer transaction models.

To spearhead the growth of other futuristic, high-tech sectors in development, Moon had also announced plans to create a so-called “fourth industrial revolution” committee and a science and technology control tower to be operated directly under the presidential office.

Electric vehicles, self-driving cars, renewable energy, 3-D printing, big data, robotics and biotechnology were some areas highlighted by Moon, many of which are closely linked to a strong and thriving ICT ecosystem.

Amid rising anticipation toward the new administration, the Korea Internet Corporations Association, also known as K-internet, specifically requested Korea’s new leader to form a high-level “digital economy committee” with the power to devise and execute overarching growth policy agendas.

“Right now, national policymaking is carried out according to different ministries. However, we need an overarching ‘digital economy’ body to pool together scattered policies governing the local IT sector and push for effective regulations,” Cha Jae-pil, head of policy at K-internet told The Korea Herald on Thursday.

The Seoul-based IT industry association also called for segmented policies for the subdivisions of ICT. Though fields like e-commerce, portal websites and telecommunications all operate under differing business paradigms, they are all currently subject to one set of regulations centered mostly on telecom, it said.

Other standout requests from K-internet included the swift adoption of a negative regulation system and widened regulatory and financial support for tech startups and venture companies.

“Right now, the world’s biggest economies including the US and China are being pulled by internet companies, signaling the importance of IT in the global economy. And it’s something Korea must also keep in mind as it sets its national strategy,” Cha said. 

By Sohn Ji-young (jys@heraldcorp.com)