KOREA INTERNET WHITE PAPER

2019

2019KOREA

INTERNET WHITEPAPER

KO

REA

INTER

NET W

HITE PA

PER

20thAnniversaryPublication

2019KOREA

INTERNET WHITEPAPER

KOREAINTERNETWHITEPAPER

Korea became the world’s second country to successfully connect to the Internet in 1982, only after the Pentagon launched the world’s first Internet - ARPAnet - in 1969. Since then, Korea has made remarkable achievements and succeeded in commercializing the 5G network for the first time in the world in 2019. Korea’s notable achievements in the field of Internet have been instrumental in enhancing the nation’s overall competitiveness and in helping Korea become the global leader of ICT (Information and Communication Technology).

When the 「Korea Internet White Paper」 was first published in 2000, it forecasted that the Internet will be the “means to lead Korea in the New Millennium and the Era of Knowledge and Information” and that it will “revolutionize the way people lead their everyday lives”.Twenty years later, Internet has dramatically changed our daily life to the extent that we cannot pass a day without the Internet. Internet is now the platform for individuals to act as content and media producers, and it serves as the basis of today’s digital economy.

「Korea Internet White Paper 2019」 concentrated on the impact and changes brought by the Internet on our society and individuals’ lives. To do so, Part 1 contains the trends and forecasts for industries and services related to Internet; Part 2 includes the institutional and cultural environments for the use of Internet, and the final Part 3 describes the technical environment that forms the Internet. Year 2020 marks the 20th anniversary of the first publication of 「Korea Internet White Paper」. Accordingly, this year’s White Paper is in the form of a special edition, comparing the past and present of the Internet, and containing the experts’ forecasts and the people’s hope for the future.

Experts predict that the future will be an era of intelligent Internet that connects things with things and people with things, due to the development of data and artificial intelligence technology. They also forecast that a variety of universal services will be spread through the Internet and new social issues will be raised. They also put an emphasis on people-oriented values such as a meaningful application of the Internet and digital.

I look forward to seeing 「Korea Internet White Paper 2019」 serve as an invaluable resource in assisting our nation to take another step forward through the Internet by providing valuable insight into the present-day Internet and preparing for the future in the era of digital transformation. In addition, I would like to take this opportunity to show my deepest gratitude to our team of writers, advisors and persons involved for their devoted time and efforts for this publication. Thank you.

President of National Information Society Agency

MOON, Yong-sik

Message from the Publisher 2019 KOREA INTERNET WHITE PAPER

CONTENTS

Message from the Publisher

History of Internet in Korea

Major Statistics of Internet in 2019

Top 10 Internet News of 2019

Introduction

1. Internet Technology and Industry

A. Artificial Intelligence

B. Cloud

C. IoT

D. Blockchain

E. Virtual Reality

F. O2O and Sharing Economy

2. Internet Service

A. Internet Information Search

B. Communication

C. Internet Finance & Fintech

D. e-Commerce

E. Location Information

3. Internet Contents

A. Use of Contents

B. Creator

C. Online Advertising

44

48

50

52

54

56

58

66

69

71

74

76

80

82

84

Part 1.IndustryandService

2019 KOREAINTERNET WHITE PAPER

90

92

96

99

104

107

109

114

116

1. Current Status of Internet Usage

A. Individual and Household

B. Business

　

2. Internet Use Culture

A. Enhanced Digital Capacity

B. Creation of Clean Internet Culture

3. Internet Usage Environment

A. Improvement of Usage Environment

B. Laws on Internet Usage

C. Improvement and Promotion of

Regulations on Internet

4. Intelligent e-Government

A. e-Government

B. Digital Government Innovation

Part 2. Utilization

1. Internet Infrastructure

A. Backbone Networks

B. Subscriber Networks

C. Research Networks

D. Next-Generation Internet

2. Internet Address Resource

A. IP Addresses and AS Numbers

B. Domains

C. Domain Name System (DNS)

D. History and Trend of Conflicts of

Addresses

　

3. Internet Technology

A. Technology Standardization

B. Authentication Technology

C. Certified e-Documents

122

124

126

128

134

136

137

139

142

144

146

Part 3. Infrastructure

A. Internet Governance

B. Information Security and Personal

Data Protection

C. Global Status of Internet

Abbreviations

Organizations Abbreviations

Writing Staff

150

152

154

158

162

165

Part 4.InternationalCooperation

Appendix

[Table. 1-1-1] Sales in Cloud 53

[Table. 1-1-2] VR/AR Market Size Forecast 58

[Table. 1-1-3] Unicorn Companies and Services in 2019 60

[Table. 1-1-4] Plan for Boosting Sharing Economy 62

[Table. 1-2-1] Online Shopping Transaction Value (2015-2018) 76

[Table. 1-2-2] Current Status of Permits and Reporting of Domestic LBS Providers 78

[Table. 1-3-1] Current Status of Sales in Contents Industry by Year 82

[Table. 1-3-2] Demand Market Size for Knowledge Information (e-Learning) 83

[Table. 1-3-3] Sales by Korean Advertising Type and Increase or Decrease Rate Compared

to Previous Year86

[Table. 2-1-1] Whether or Not to Access the Internet 94

[Table. 2-1-2] Whether or Not to Use e-Commerce 94

[Table. 2-1-3] Whether or Not to Use IoT Devices and Services 95

[Table. 2-1-4] Whether or Not to Use Cloud Computing Services 95

[Table. 2-1-5] Whether or Not to Use Big Data Tech and Services 96

[Table. 2-2-1] Outlook for Demand and Supply of Software Talent Pool for 4th Industrial

Revolution (2018-2022)101

[Table. 2-3-1] 2018 Browser Market Share in Korea and Foreign Countries 108

[Table. 2-4-1] Main Services to the Nation 118

[Table. 2-4-2] Examples of Internet Services for Companies in Public Sector 119

[Table. 2-4-3] Digital Government Transformation Plan 121

[Fig. 1-1-1] Prospects for Use of AI by Sector 50

[Fig. 1-1-2] IoT Service Field 55

[Fig. 1-1-3] Korean Blockchain Market Size 57

[Fig. 1-2-1] Current Status of Share of Search Queries of Korean PC-based Search Engines 69

[Fig. 1-2-2] Current Status of Share of Search Queries of Major Foreign Mobile Search

Engines69

[Fig. 1-2-3] Current Status of Korean Mobile Instant Messengers 71

[Fig. 1-2-4] Status of Social Media Using PC/Mobile in Korea 72

[Fig. 1-2-5] Status of E-mail Using PC/Mobile in Korea 72

[Fig. 1-3-1] Experience of One-person Broadcasting Content Watched by Video Service

Users85

[Fig. 2-1-1] Internet Usage Rate and the number of Internet Users (Ages 3+) 92

[Fig. 2-1-2] Percentage and Number of Households with Internet Access (All households

in Korea)93

[Fig. 2-2-1] Current Status of Overdependence-risk Group by Year and Target 103

[Fig. 2-3-1] ICT Regulatory Sandbox Procedures 114

[Fig. 3-1-1] Forecast for Global 5G Market 132

[Fig. 3-2-1] Operation Principles of DNS 142

[Fig. 3-3-1] Development of Certified Electronic Document Intermediary System 151

[Fig. 4-1-1] Change in Number and Percentage of World’s Population Using the Internet 158

History ofInternetin Korea

Internet service was launched in Korea after the establishment of the System

Development Network in 1982, and it rapidly grew in 1994 when it was commercialized.

In 2013, the number of Internet users in Korea exceeded 40 million, and became the first

country to launch WiBro and HSDPA commercial services. In 2016, Korea has announced

the longterm comprehensive plans of intelligence information society in response to

the Fourth Industrial Revolution, and has taken a leap to becoming the world's best

intelligence information powerhouse.

INDUSTRY &SERVICES

INFRA

POLICY

1982•Launched the first Internet service

1983•Launched the first information search service

1984•Launched the first commercial email service [Dacom]

1982• SDN [TCP/IP] established [Seoul National University - Korea Institute of Electronic Technology]

1983•Connected to SDN-EUNET/UUCPNET [Technical, academic information exchange network]•Launched the PSTN data service•Opened an overseas public data network

1984•Connected to SDN-CSNET [information science network]•Opened the PSDN DACOM - Net for the first time

1981•Korea Telecom was established

1982•Korea Data Communication Corporation was established•Established the first basic plan for administrative computerization

1983•Enacted the Framework Act on Telecommunications [used the term 'information communication' for the first time]•Established the business plan for the key national network project

1984•Formed the key national network mediation committee

1981 ~ 1984 1985 ~ 1989

1985•Launched the email service in Korean• Launched the PC communication service [Dacoml]

1987•Launched the H-Mail service•Launched the PC banking service

1988• Launched a commercial PC communication service [Chollianl]•Launched a private bulletin board service [The FiRST]•Developed an antivirus software following the first virus [Brain] attack•Launched the EDI service [Dacoml]

1985•Connected to the SDN-PACNET [Asia-Pacific academic research network]

1986•The first IP address [128.134.0.0] assigned in Korean•Introduced the Korean domain [.kr]

1988•Connected to the SDN-MHSNET [academic network]

1989•Launched an educational network [KREN], and a research network [KREONet]•Established the SON-HANA network [Korea Telecom: KT]

1985•Established a promotion plan for the national administration network•Held the first international computer networkrelated conference [PCCS)

1986•Enacted the Act on the Expansion and Promotion of the Use of the Information and Communication Network

1987•The Korea Computerization Agency was launched•Established the first basic plan for the key national network•Formed the computer network mediation committee

1996•Launched the ISDN Internet service•Launched the first e-commerce and webzine services•Introcuced the first graphic-based MUG game•Held an information EXPO

1997•Launched the Internet stock trading service•Launched a free Internet service, including search engine and email services•Launched the first Internet portal service [Netsgo]

1998•Launched the first commercial broadband Internet service[Thrunet]•Launched the e-government service

1999•Launched the ADSL service [Hanaro Telecom]•Launched online banking service

1996•Opened a public ISDN network

1997•Launched a dedicated private circuit service•Launched high-speed national Internet services•The number of PC communication users exceeded 3 million

1999•The number of Internet users exceeded 10 million•The first IPv6 address was designated

2000•Opened a commercial ATM exchang network•The Korean ISP Association was founded

1996•Established the first basic plan for promotion informatization•Organized an informatization promotion committee•The Korea Information Security Agency [KISA] was founded

1998•Established an advancement promotion plan for an information and communications network•Established a plan for the promotion of PC communication and Internet usage

1999•Established Cyber Korea 21•Enacted the Framework Act on Electronic Commerce and Digital Signature Act•The Korea Network Information Center[KRNIC] was founded

2000•Completed the second stage of the super highway communication network project•Enacted the Software Industry Promotion Law and Knowledge Information Resource Management Act•Established the guidelines for personal data protection•Promoted the top 11 initiatives for e-government•The Korea IT Industry Promotion Agency [KIPA] was founded

1991•Launched the online issuance service for a copy of the “resident registration”

1994•Introduced a commercial Internet service [KT]•Introduced a text-based MUD game for the first time•Launched the first government agency websites [Chongwadae, etc.]

1995•Launched the ‘WWW’service•The first Internet cafe [Netscafe] was opeded•Introcuced the Internet newspaper and broadcasting service [Joongang Ilbo and KBS]

1990•The SDN-HANA network was connected to the IP-based Internet in the US

1993•Launched a comprehensive administrative information network

1994•Introcuced commercial ISPs [KT, Dacom, iNet etc.]

1995•Established a PC-Internet connection•Established KIX and launched related services

1990•Established the Comprehensive Measures for the Information Society

1992•Established the second basic plan for the key national network project•Established the Act on Promotion of Information and Communications Network Utilization

1993•Established the basic plan for the formation of super highway information communication infrastructures

1994•The Ministry of Information and Communication was founded

1995•Established a comprehensive plan for super highway information and communication infrastructure •Enacted the Framework Act on Informatization Promotion•The Korea Internet Safety Commission was founded

1996 ~ 20001990 ~ 1995 2001 ~ 2005

•Launched the commercial Internet service(1994)•The Ministry of Information and Communication was founded(1994)

•Launched the commercial broadband Internet service(1998)•The number of Internet users exceeded 10 milion(1999)

•Korea was ranked No.1 for the establishment of its broadband networks(2001)•Enacted the Information Communications Network Act(2001)•The number of broadband Internet subscribers exceeded 10 million(2002)•Established "e- Korea Vision 2006"(2002)•Established "Broadband IT Korea Vision 2007"(2003)•Established "IT839 Strategy"(2004)•The number of Internet users exceeded 30million(2004)•Launched commercial VoIP services(2005)

2001•The number of onLine banking users exceeded 10million•Introduced the Internet content class service

2002•The size of the Korean game market exceeded KRW3 trillion

2003•Launched the VDSL [20Mbps] service•Launched the mobile banking service•Launched the Korean.kr service

2005•Launched a commercial VoIP service•The number of mobile banking subscribers exceeded 1 million

2001•Ranked as the world's No. 1 in the establishment of the broadband network (OECD)

2002•The number of broadband subscribers exceeded 10 million households•Ranked as the world’s No. 1 in the penetration of broadband Internet

2003•The Internet security incident occurred on January 25th

2004•The number of Internet users exceeded 30 million•Promoted the pilot BcN project

2005•Ranked as the world’s No.1 in the ITU Digital Opportunity Index [DO]•Launched a pilot in-flight Internet service [Korean Air]•Established the international WiBro·standards [IEEE]

2001•Implemented the Act on Promotion of Information and Communications Network Utilization and Information Protection

2002•Established e-Korea Vision 2006

2003•Established the Broadband IT Korea Vision 2007

2004•Established the IT839 strategy•Established the basic plan for the establishment of BcN

2005•Established the basic plan for the promotion of IPv6 distribution•Implemented the real name verification system for Internet civil affairs application

2009•The number of VoIP subscribers exceeded 6.5 million•The number of mobile banking users exceeded 10 million

2010•The number of real-time IPTV service subscribers exceeded 3 million•The number of smartphone subscribers exceeded 7 million•The amount of Wibro exports reached KRW1 trillion

2009•Ranked as the world's No. 2 in the ICT Development Index•Began the Giga Internet pilot project•DDoS occurred on July 7th

2010•Ranked as the world's No. 1 in the UN eGovernment Development Index and eParticipation Index•Completed the BcN foundation establishment project

2009•The Korea Internet and Security Agency [KISA] was founded•Established a mid- to long-term broadcasting communication network development plan•Established the primary and secondary wireless Internet activation promotion plan•Held the 36th ICANN meeting in Seoul•Established the comprehensive cloud computing activation plan

2010•“☎118 Counseling Center”was founded•Established the IPv6 transition promotion plan•The Internet Cooperation Forum was founded•Established a comprehensive promotion plan for the activation of the Internet ad market•The Korea Internet Dream Star was founded

2006•Launched the world's first WiBro and HSDPA services•The volume of online shopping mall transactions exceeded KRW 13 trillion•Launched the mobile application service for the issuance of civil affairs documents

2007•Launched the second-level .kr domain [QuickDom] service•The total volume of e-commerce transactions exceeded KRW500 trillion

2008•The number of the .kr domain registrations exceeded 1 million•The number of online banking subscribers exceeded 50 million•Launched a commercial IPTV service

2006•Ranked as the world's No. 1 in ITU DOI•Launched the FTTH service

2007•Ranked as the world's No. 1 in ITU DOI•Achieved the international standardization of WiBro/DMB ITU

2008•The number of broadband Internet subscribers exceeded 15 million•Expanded the commercialization and coverage of WiBro Wave2

2006•Established the basic plan for u-Korea•Established the measures for the prevention of the illegal use of other people’s names in online gaming and hacking•Held the first Korea Internet Awards

2007•Implemented the Restrictive Identification System•Introduced i-PIN, an alternative measure for RRN registration•The Korea IT International Cooperation Agency [KIICA] was founded

2008•The Korea Communications Commission was founded•Held the OECD Ministerial Meeting on the future of the Internet economy•Enacted the Internet Multimedia Services Act

2009 ~ 2010 2006 ~ 2008 2011 ~ 2012

•Launched the world's first WiBro and HSDPA services)•Established the basic plan for u- Korea(2006)•Implemented the Restrictive Identification System(2007)•The Korea Communications Commission was founded (2008)•Held the OECD Ministerial Meeting on the future of the Internet economy(2008)

•Ranked No. 2 in the ICT Development Index (2009)•Ranked No. 1 in the UN e-Government Devel opment Index and e-Participation Index(2010)•The number of smartphone subscribers exceeded 7 million(2010)

•Launched a commercial LTE service(2011)•Celebrated the 30th anniversary of the launch of the Internet in Korea(2012)

2011•Launched a commercial LTE service (SKT/LG U+)•Launched the "(Korea)" domain service•The number of smartphone subscribers exceeded 20 million•The number of online banking users exceeded 70 milLion•The number of mobile banking users exceeded 20 million

2012•The number of smartphone subscribers exceeded 30 million•The number of IPTV service subscribers exceeded 6 million•The number of LTE subscribers exceeded 15 million

2011•Ranked as the world's No. 1 in the ICT Development Index ( as of 2010)•Established the LBS Business Support Center•Ranked as No. 1 in the category of the wire-less broadband Internet subscribers per 100 people [OECD)•DDoS occurred on March 4th•Completed the allotment of IPv4

2012•Marked the 30th anniversary of the launch of the Internet in Korea•The number of broadband Internet subscribers exceeded 18 million

2011•Established the promotion plan for the activation of the NFC-based mobile smart life service•Established a pan-government cloud computing policy council•Implemented the Act on the Protection of Personal Information•Introduced a mobile ad platform certification system

2012•The Korea Internet Governance Alliance was founded•The Day of Information Security was designated [second Wednesday of July]

2015•The number of online banking users exceeded 110 million•The number of broadband Internet subscribers exceeded 20 million•The number of LTE subscribers exceeded 41 million•The size of the Korea game market exceeded KRW TO trillion

2016•Mobile telecommunications service subscribers in Korea surpassed 55 million•Go match between Alpha Go and Lee Sedol•Internet usage rate among senior citizens aged 60 or over was 51.4%, and user count surpassed 5.053million•Korea’s first Internet-only bank has emerged, and has surpassed 0.3 million in subscribers•The transaction volume of mobile e-commerce surpassed the PC shopping transaction volume, going over KRW 35.5 trillion won•Gachon University Gil Medical Center opened the AI Cancer Center

2015•Ranked No. 1 in the DECO OUR Data Index•Reclaimed the world’s No. 1 ranking in the ICT Development Index as of 2014•Confirmed the distribution method of 700MHz frequencies•Korean Internet speed ranked No. 1 for 7 consecutive quarters•The Korean team won the DARPA Robotic Challenge•The Korean team won at the DEF CON Hacking Conference

2016•Korea has ranked 1st in ICT Development Index for 2 consecutive years•Constructed the world’s first 5G demonstration service network•Korea has ranked 1st in Internet speed for 13 consecutive quarters•Constructed LPWA network dedicated to IoT around the country•Finished the IPv6 commercialization by domestic mobile networks•Launched an open platform shared by the financial institutions

2015•Established the K-ICT strategy•Enacted the Cloud Development Act•Enacted the Information Security Industry Promotion Act

2016•Announce the long-term comprehensive plans of intelligence information society in response to the Fourth Industrial Revolution•Expand the subjects obligated to pass ISMS (Information Security Management System) certification to include medical and educational institutions•Open a support center for FinTech security and authentication technology•Launch Cybersecurity Alliance For Mutual Progress (CAMP)•Establish the mobile app accessibility guideline 2.0 (KS X 3253:2016) KCS (Korea Certification Standard)•Run a robo-advisor test bed

2013•The number of domestic Internet users exceeded 40 million•The number of domestic mobile messenger [KakaoTalk] users exceeded 120 million•Domestic mobile messengers started entering the foreign markets [Line, etc.]

2014•Launched a commercial IPv6 service•The number of IPTV subscribers exceeded 10 million•The number of LTE subscribers exceeded 36 million

2013•Ranked as the world's No. 1 in the ICT Development Index [as of 2012)•DDoS occurred on March 20th [affecting financial world and broadcasting companies)•APT occurred on June 25th [affecting government and public agencies]•Held a bidding for LTE frequencies allotment

2014•Launched a commercial Giga Internet service•Ranked as the world's No. 1 in the UN e-Government Development Index for three consecutive years•Connected to the international IPv6 line•Ranked as the world's No. 2 in the ICT Development Index as of 2013

2013•Opened the Phishing Response Center•Launched the Ministry of Science, ICT and Future Planning•Enforced the Amendments of the Information Communications Network Act•The Internet Startup Alliance was founded•Announced the Guidelines for the Internet Search Service

2014•Held the ITU Plenipotentiary Conference in Busan•The Multilateral Internet Governance Alliance was founded•Opened the IoT Innovation Center•Opened the Comprehensive IPv6 Support Center•Launched the prohibition of RRN•Launched a TFT for the improvement of ecommerce regulations

2015 ~ 20162013 ~ 2014 2017 ~ 2019

•The number of domestic Internet users exceeded 40million(2013)•Launched a commercial IPv6 service(2014)•Launched a Giga Internet service(2014)

•The number of online banking users exceeded 110 million•Ranked No.1 in the DECO Open, Useful, Reus-able [OUR) Data Index•Announce the long-term comprehensive plans of intelligence information society in response to the 4th Industrial Revolution

•Popularization ratio of smart phone 87.8%; top in the world•Defining development strategy for block chain technology•Commercialization of 5G network first in the world

2017•Internet bank launched•Popularization ratio of smart phone 87.8%; top in the world•Daily average simple transfers: 682.5, Increased by 375.8% of the previous year

2018•Customers of internet bank: 7 millions; Total loans: 8 trillion KRW•Toss subscribers recording 10 millions (Oct.), and Making its way into FinTech Unicorn first in Korea (Dec.)

2019•World's No.1 Smartphone Distribution Rate - 95%•Video Service Utilization Rate – 81.2%

2017•Internet users (3-years or older): 45.28 millions Utilization rate reached 90.3%

2018•Commercialized 10-giga Internet.

2019•Commercialized the world’s first 5G service (in April).

2017•Establishment of the 4th Industrial Revolution Committee

2018•Establishment of Blockchain Technology Develop ment Strategy

2019•The government announced “Plan for Boosting the Economy of Data and AI”.•Enforced ICT regulatory sandbox. •Published the measures for enhancing competitiveness of materials, parts, and equipment.

Korea Internet White Paper Infographic 2019Current Status of Internet Usage by Household

Percentage of Households with Internet Access

49.8%

92.7%

96.8% 98.8% 99.7%94%

97.2% 99.2%

2010 20152019

2005

Total Households

Households out of 19.75 million households in Korea that can have access to the Internet

14 2019 KOREA INTERNET WHITE PAPER

Internet Use: Device Perspective

Internet Access Devices

Targets of Internet Access Devices

Total HouseholdsTotal Households

Current Status of Information andCommunication Devices by Household

Desktop

52.2%2019

56.3%2010

94.9%2019

Mobile deviceSmartphone/Smart Pad, etc.

4.9%2010

Smar

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neDe

skto

pSm

art T

VLa

ptop

Gene

ral T

V

Smar

tpad

AI spe

aker

Gam

e Co

nsol

e

Smar

t Hom

e Ap

plianc

es

e-bo

ok T

erm

inal

100%WLAN

81.6%Optical LAN

6.8%Cable Modem

6.2%xDLS

7.8%Portable Wireless Internet Router

99.9%Mobile Internet

94.9%

51.0%

41.6%

40.4%

19.3%

18.5%

7.8%

4.5%

3.1%

1.3%

15

Internet Usage Rate and the number of Internet Users (Ages 3+)

Current Status of Internet Use in Korea and Foreign Countries

(Unit: Thousand persons)

2000

44.7%

2005

72.8%

2010

77.8%

2015

85.1%

2019

91.8%

19,04033,010 37,010 41,940 46,353


Internet Usage Rate by Age Group (Ages 3+)

Internet Access Rate by Gender

89.6%/100 93.9%/100Female Male

Ages 3-9

Teens

20s

30s

40s

50s

60s

70s or above

91.2%

99.9%

99.9%

100%

99.8%

99.3%

89.1%

38.9%

83.9%

99.9%

99.9%

99.9%

99.7%

98.7%

82.5%

31.8%

2017

2019

17

Internet Usage Rate by Region

(Unit:%)

Jeju 88.8

Gangwon 84.9

Chungcheongbuk-do

95.6

Daejeon 94.7

Gyeongsangbuk-do

94.4

Daegu 98.2

Sejong

97.9

Chungcheongnam-do

93.8

Jeollabuk-do 85.1

Ulsan 93.7

Gyeongsangnam-do 88.7

Busan 92.8Gwangju 91.5

Jeollanam-do 84.3

Incheon 93.2

Seoul 92.2

Gyeonggi 91.1


(Unit:%)

(Unit:%)

Types of Internet Connections (Ages 3+, Multiple Responses)

Purpose of Internet Use

4.1

94.4Use of Wireless Internet with 3G and

LTE Mobile Phones (Including Smartphones)

5.6Use of Wireless Internet Using a

Portable Wireless Internet Routers (Egg)

6.2Use of Wireless Internet with 5G

Smartphones

85.5Use the Wireless Internet Such as Wi-Fi

Within a Certain Range

Using the Wired Internet

Using wireless internet

99.7

95.4 94.0 94.0

Communication Obtaining Data and

Information

Leisure Activities

Operating Website, etc.

50.558.9

Education and Learning

27.6

Career and Job

64.0

Other

19

Purpose of Internet Use by Gender and Age Group

95.6 95.3 93.4 93.1

62.6 58.948.6

25.5

94.5 94.8

65.4 59.052.4

29.6

Communication Obtaining Data and Information

Leisure Activities

Operating Website, etc.

Education and Learning

Career and Job

Other

Teens

Communication 98.6Obtaining Data and Information 96.0

Leisure Activities 99.5

Operating Website, etc. 69.9

Education and Learning 83.5

Other 27.3

Career and Job 8.9Ages 3-9

Communication 48.9

Obtaining Data and Information 36.0




Other 3.4

20s

Communication 100Obtaining Data and Information 100




Other 91.0

Career and Job 60.8 30s

Communication 99.8Obtaining Data and Information 100




Other 94.3

Career and Job 48.8

40s

Communication 99.8Obtaining Data and Information 100




Other 88.6

Career and Job 33.9 50s





Other 64.9

Career and Job 14.8

60s





Other 33.0

Career and Job 6.7

70s or above





Other 12.3

Career and Job 3.0

Male

Female

(Unit:%)


Location of Internet Use by Gender and Age Group

20s

40s

60s

70s or above

96.4 96.6

59.1 59.166.0

50.0 41.0 40.8

21.4 23.9 19.2 17.10.0 0.0

99.6 99.6

Home Commercial Facilities

(PC Rooms, etc.)

Company(Worksite)

Public Facilities

(Public Offices, etc.)

Someone Else's House

Places of Education

Such as School

Other On the Move

Male

Female

Ages 3-9

Home 96.7Commercial Facilities (PC Rooms, etc.) 42.4

Company (Worksite) 0.0

Someone Else's House 26.0

Places of Education Such as School 23.4

Public Facilities (Public Offices, etc.) 16.6

Other 0.0On the Move 94.4 Teens



Someone Else's House 30.4Places of Education Such as School 73.7


Other 0.0On the Move 99.8






Other 0.0On the Move 100
















Other 0.0On theMove 100






Other 0.0On theMove 100

Home 95.3

Commercial Facilities (PC Rooms, etc.) 35.4Company (Worksite) 21.7




Other 0.0On the Move 99.9

30s

50s

(Unit:%)

21

Location of Internet Use

Percentage of Internet Activity by Device in 2019

98.4 96.5

52.559.1

46.958.2

37.1 40.9

18.322.6

19.2 18.2

0 0

99.5 99.6

Home Commercial Facilities

Company

2017

2019

Someone Else's House

Places of Education

Such as School

Other On the MovePublic Facilities

(Public Offices, etc.)

Desktop Mobile device

43.7 46.2Education and Learning

78.8 93.9Leisure Activities

87.3 94.2Obtaining Data and Information

27.8 18.7Career and Job

81.5 95.7Communication

25.4 58.3Operating

Website, etc.

(Unit:%)

(Unit:%)


Current Status of Internet Usage by Country

Average Time per Week Spent Using the Internet (Ages 3+)

Less Than 7 Hours

18.0

7 to 14 Hours

22.8

Average Usage Time per Week

17 Hours and 40 Minutes

14 to 21 Hours

21.2

21 to 35 Hours

26.8

More Than 35 Hours

11.2

59.4

Denmark 97.1Norway 96.5Sweden 96.4Bahrain 95.9Qatar 95.9Korea 95.1UAE 94.8

UK 94.6Netherlands 93.2Canada 92.7Japan 90.9New Zealand 90.8Finland 87.5Germany 84.4

Source: ITU, Measuring the Information Society Report, 2018

(Unit:%)

(Unit:%)

23

Internet Service Utilization

54,055,617

1921.4

43.5

65,617,046

94,185,765

113,729,692

2015 2016 2017 2018

Online Shopping Transaction Value (KRW, Million)

Year-On-Year Increase and Decrease Rates (%)

20.8

Online Shopping Transaction Value

Source: Statistics Korea, Korean Statistical Information Service’s Report on Online Shopping Survey, 2018

Mobile

PC

14.54 Million Persons (46.0%)

36 Minutes

655 Minutes31.75 Million Persons (81.4%)

Average Usage Time (Minutes)

Number of Net Users (Ten Thousand Persons)

Status of Social Media Using PC/Mobile in Korea

Source: Nielsen Korea, www.koreandick.com, 2019


http://www.koreandick.com

Current Status of Internet Technology and Industries

Demand Market Size for Knowledge Information (e-Learning)

(Unit: KRW, Hundred Million; %)

2015

15,778

1,695

14,498

2,227

46.1

42.4

Ratio

100

Sales

34,198

5.0

6.5

2016

Ratio

100

Sales

34,287 15,816

1,718

14,514

2,239

46.1

42.3

5.0

6.5

2017

Ratio

100

Sales

36,299 16,682

1,995

15,140

2,482

46.0

41.7

5.5

6.8

2018

Ratio

100

Sales

37,772 17,848

2,056

15,354

2,514

47.3

40.6

5.4

6.7

Individuals Businesses Government/Public Institutions Regular Educational Institutions

Source: National IT Industry Promotion Agency, Survey of Korean e-Learning Industry in Korea 2018 (Reconstruction), 2019

25

VR/AR Market Size Forecast

(Unit: USD, Million)

Mobile AR

780.0

792.1

3,800.1

11,735.2

30,265.9

57,894.8

Smart Glasses

377.5

606.3

794.5

1,407.3

9,045.0

14,864.8

Premium AR

1,508.3

2,468.2

3,029.5

4,455.0

6,179.0

12,063.0

Mobile VR

527.9

1,551.9

2,584.9

3,665.1

4,690.2

6,046.4

2016

2017

2018

2019

2020

2021

Source: NIPA, VR/AR Industry Status and Outlook, 2018


Prospects for Use of AI by Sector

Korean Blockchain Market Size

Video Service Usage Status

TrafficCongestion 10%

Traffic Accidents 5%

Logistics Efficiency 33%

Health Life Extension 3 Years

Achieving 95% accuracy in early diagnosis of dementia

Manufacturing Productivity 10%

Achieve 95% Accuracy in Detecting Financial Accidents

Arrest Rate Around 90%

Damaged Forest Area 10%

Traffic Logistics

Manufacturing Finance

MedicalAttention

Welfare

Security Safety

Video Service Utilization Rate

81.2%Searching for

Information Through Videos

37.2%Average Video Usage Time

4.5Hours

2015 2016 2017 2018 2019 2020 2021 2022

123 201 324524

846

1,366

2,206

3,562

Source: Korea Institute of Science and Technology Information, 2019

Unit: KRW, Hundred Million

27

Status of Registration of Korea's Top-Level Domains

Internet Infrastructure and International Cooperation

Current Status of IPv4, IPv6, and AS Number Retention

IPv4 Addresses Retention

IPv6AddressesRetention

AS NumbersRetention

USA1,609,341,184 (Addresses)

China47,818 (/32)

USA27,248

112,473,600(Addresses)

5,258 (/32)

1,032

KoreaFirst Place

Two-Step System

(English.kr / Korean.kr / Korean.Korea)

887,460Cases

Three-Step System

(co.kr / or.kr, etc.)

716,185Cases

Source: Korea Internet & Security Agency, Current Status of Retention of Internet Addresses by Major Country(As of September 2019), 2019

Source: Korea Internet & Security Agency, Current Status of Country Domain Registration, 2019


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

Germany

UK

Netherlands

France

Italy

Australia

Poland

Canada

Switzerland

USA

Spain

Belgium

Japan

Sweden

Denmark

Austria

.de

.uk

.nl

.fr

.it

.au

.pl

.ca

.ch

.us

.es

.be

.kr

.jp

.se

.cz

.dk

.at

16,215,736

12,197,103

5,857,114

3,388,052

3,196,818

3,188,586

2,610,787

2,584,833

2,210,293

2,120,117

1,923,728

1,609,164

1,603,645

1,559,681

1,503,661

1,331,839

1,320,079

1,305,546

.mx

.no

.hu

.nz

.cl

.fi

.pt

.sk

.tr

.ie

.il

.lt

.si

.ee

.lv

.lu

.is

.gr

1,115,733

772,634

747,149

712,894

581,732

470,504

427,836

406,750

403,900

271,568

248,096

193,734

132,113

120,748

110,229

98,805

67,696

N/A

Mexico

Norway

Hungary

New Zealand

Chile

Finland

Portugal

Slovakia

Turkey

Ireland

Israel

Lithuania

Slovenia

Estonia

Latvia

Luxembourg

Iceland

Greece

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

* N/A : Not available

Ranking Country ccTLD Registration Count Ranking Country ccTLD Registration Count

Republic of Korea

CzechRepublic

Current Status of Registration of Top-Level Domains of OECD Member Countries (As of Q1 in 2019)

(Unit: Case)

Source: Korea Internet & Security Agency, Major ccTLD Statistics, 2019

29

Global Market Outlook by Sector (2026)

Convergence Service

KRW 692 Trillion

KRW 1,161

Trillion

(2026)59.6%28.4%

12.0%

Network EquipmentSmartphone

KRW 330 Trillion

Advanced Devices and Security

KRW 139 Trillion

Annual World Market Forecast (2019-2026)

8.2117.3

181.5275.1

384.5

686.4

894.4

1.161

2019 2020 2021 2022 2023 2024 2025 2026

Average Annual Growth (2022 → 2026)

43.3%

Forecast for Global 5G Market

(Unit: KRW, Trillion)

Source: 5G+ Strategy by Relevant Departments, 2019


Current Status of Korean and Foreign Undersea Cables

(Unit: bps)

FEA

SMW-3

APCN2

EAC

C2C

FNAL

TPE

Ulleung-Mainland

Ulleung-The Land 2

Jeju-The Land

Jeju-The Land

APG

KJCN

80G / 28,000km / 1997

Worldwide

Korea

14 Countries including Korea, Japan, Hong Kong, Middle East, Europe

33 Countries including Korea, Northeast Asia, South East Asia, Middle East, Europe

Korea, Japan, China, Hong Kong, Taiwan, Singapore, Philippines

Korea, Japan, China, Taiwan, Hong Kong, Philippines, Singapore

Korea, Japan, Taiwan, China, Hong Kong, Taiwan, Philippines, Singapore

Korea, Japan, Taiwan, Hong Kong

Korea, China, Japan, Taiwan, USA

Korea, China, Japan, Taiwan, Hong Kong, Vietnam, Malaysia, Singapore

Korea, Japan

160G / 39,000km / 1999

25.6T / 19,000km / 2001

30T / 19,800km / 2002

30T / 17,000km / 2001

12T / 9,800km / 2002

8T / 18,000km / 2008

57.6T / 10,400km / 2016

2.88T / 500km / 2002

Ulleung-Hosan

Ulleung-Hosan

Jeju-Goheung

Jeju-Namhae

10Gx16 / 159km / 1993

10Gx16 / 164km / 2016

10Gx32 / 191km / 1996

10Gx32 / 236km / 2000

Source: Current Status of Undersea Optical Cables in International Circuit, 2019

31

01First and Foremost, Artificial Intelligence

The year 2019 has been a period

of greater interest and expectations

for AI than ever before in Korea.

In particular, while government-

level measures were set in detail to

foster the AI industry, policy tasks,

implementation methods, and various

discussions were also actively carried

out. In January 2019, President Moon

Jae-in said through New Year’s first

press conference that what would

be needed to sustain growth would

be ‘innovation’and the government

will actively invest into the innovative

industries such as AI. Mentioning

AI as a key field of industry that will

lead Korea’s future, he suggested a

direction for its growth.

Following his press conference, the

Ministry of Science and ICT (MSIT)

proposed a detailed blueprint at the

first Innovation and Growth Strategy

Meeting chaired by the deputy prime

minister for economy on Jan. 16.

The ministry announced the “Plan

for Boosting the Economy of Data

and AI” jointly with related ministries

and presented the detailed action

plans and policy tasks. The Plan for

Boosting the Economy of Data and AI

included a five-year execution plans

to promote the strategy for fostering

data and AI and convergence during

the period from 2019 to 2023.

In addition to the plan to expand the

size of the domestic data market

to KRW 30 trillion by 2023, it also

set specific goals such as fostering

unicorn companies in the sector of AI,

creating AI convergence clusters, and

training professionals in the sectors of

data and AI. Social expectations for AI,

which began at the beginning of the

year, led to discussions on how Korea

can secure competitiveness in the

global AI market. Meeting President

Moon on July 4, Masayoshi Son,

SoftBank Chairman and CEO, said,

“The era of AI has come.”“Korea has

slightly fallen behind in AI,”he pointed

out. In addition, he emphasized

“What Korea has to focus on most is

AI,”leading the social interest in the

AI-related industry.

On Oct. 29, a seminar was held

involving Korea’s think tanks in

the sector of AI. In a seminar

titled “A Strategy for Enhancing

AI Competitiveness to Lead the

Fourth Industrial Revolution,”plans

for enhancing AI technology

competitiveness, analyzing business

cases, and organizing AI-related

legislations and ethics were discussed.

Presenting the basic plan on AI at

DEVIEW in October, 2019, President

Moon revealed the ambition to make

“an era of AI when you can imagine

and challenge.”Based on this, the

national strategy for AI was released

in December. In the three major

areas which include ‘Building the

world-leading AI ecosystem’, ‘The

country that utilizes AI best,’ and

‘Implementation of human-oriented

AI’ with the vision of leaping up as

the powerhouse of AI beyond the

powerhouse of IT, 9 strategies and

100 challenges were presented and a

goal to gather the national capabilities

were set. As such, 2019 can be

evaluated as a year when the social

interest in AI was growing with the

actively intellectual debate and the

blueprint at the national level started

to be unveiled.

Top 10Internet News of 2019


02Will the World’s First 5G Commercialization Be

ICT’s New Leap Forward?

In 2019, Korea became the country

that commercialized the 5G network

for the first time in the world. Korea’s

three mobile telecommunication

companies including SK Telecom, KT,

and LG U+ launched their 5G services,

attracting the first subscriber on April

3 at 11 p.m. Through this, Korea was

recorded as the first 5G network

service-providing country, surpassing

telecommunication powerhouses

such as the United States, Japan and

China.

As the world’s first launch of the

commercial 5G network service in

Korea began, the government quickly

announced follow-up measures. The


presented “5G+ Strategy”announced

with its related ministries on April 8,

which selected the 5G-based 10 core

industries such as next-generation

smartphones, network equipment,

edge computing, information security,

VR/AR devices, wearable devices,

intelligent CCTV, futuristic drones,

connected robots, and 5G V2X, and

five core services such as realistic

content, smart factories, autonomous

vehicles, digital health care, and smart

cities.

In addition, the authority presented

five strategies for fostering these core

industries and core services: ‘public

leading investment’ to secure initial

markets and enhance people’s lives;

‘expanding private investment’to

create test beds and advance the

industries; ‘reform of systems’ to

activate the 5G network service and

support user protection; ‘industry-

based cultivation’to foster global-level

transforming companies and human

resources; and ‘support to advance

into overseas markets’to globalize

the 5G technology service. In the

presentation of the “5G+ Strategy”,

President Moon mentioned that the

5G-based new industry ecosystem

would be a new challenge for young

people and a second venture boom

in the country.

T h e “ 5 G C o n t e n t F l a g s h i p

Project”announced on April 10 by the


is a project aimed at boosting the

realistic content market as a follow-

up to the “5G+ Strategy”. Specifically,

it intended to develop reclaimed and

buried items-maintaining contents

using mixed reality (MR) technology,

5G-based mult i-holographic

holographic video call services, a

5G-based multi-channel video relay

service, 5G video-based real-time

remote control, and application

contents exclusive for 5G foldable

phones to vitalize the 5G market.

At the 11 th meet ing o f the

Information and Communication

Strategy Committee chaired by the

Prime Minister and held on October 7,

the bill titled “Strategies for Vitalizing

Realistic Content Industry to Lead

the 5G Era” (2019 ~ 2023) was

resolved. It contained the strategies

to foster the realistic content industry

with the expectation of its growth

due to the 5G service. Through

strategies such as creating new

demand, advancing technology and

infrastructure, supporting industrial

growth, and creating an industrial

ecosystem, it set specific goals of

generating the production of KRW 20

trillion, achieving exports worth KRW

5 trillion, fostering 100 professional

companies, and fostering 5,550

professionals by 2023.

As such, 2019 is the first 5G year

in Korea, and is the first year of

‘commercialization’ of the service

for the first time in the world. As a

result, the technology and content

development support policies for 5G

led by the government have begun in

full swing and the industries-fostering

policies are also being promoted from

the mid- to long-term perspectives.

Attention is brought on whether

Korea that had the reputation as an

Internet powerhouse with the high-

speed Internet service could get a

new chance for a new leap forward

with the 5G service.

03Now is the Age of One-Person Media: “I Am A

Creator, Too.”

According to the report titled “Analysis

on Provision and Usage of Video

Contents Provided by Korea’s Major

OTT Service Providers”published

in March by the Korea Information

Society Development Institute

(KISDI), it appeared that the highest

33

percentage of teenagers watched

v ideos or Internet persona l

broadcasts produced by general

users on YouTube.

One-person media, a media format

provided by video-sharing platforms

such as YouTube that enable

individuals to easily produce and

provide their videos, is becoming

more and more popular as an

important media content type.

Just like this, as the one-person

media has been positioned as one

of the important media contents in

our community, a creator of one-

person media has already become a

profession and the interest in creators

continued to rise even in 2019. In

2019, “Pengsoo”a penguin character

from a public broadcaster EBS,

appeared as a creator, which became

popular. EBS developed Pengsoo,

a 10-year-old penguin-concepted

character and launched its YouTube

channel “Giant Peng TV”on March

14, 2019, which got the achievement

with more than one million YouTube

subscribers on November 27. The

character appeared as the creator

of one-person media, giving rise

to an unusual phenomenon that

the character makes broadcast or

appearances with the popularity.

As the one-person media has settled

down and the creators who became

popular came up one after another,

the promotion of government-level

policies began to be accelerated.

Analyzing that more than 3,200

teams of one-person media creators

are active in Korea, the “One-

person Media Industry Boosting

Plan”prepared on August 30 by

the Ministry of Science and ICT

(MSIT) jointly with related ministries

included the plans to foster the one-

person media as a new industry in

the field of media. In particular, as a

way to support the whole process

of creating one-person media,

the government decided to carry

out the policy support projects

in the process of producing and

distributing one-person media, such

as creator discovery, production

support, commercialization and

distribution support, and overseas

expansion support. Major projects

include discovering creators,

providing professional education

and mentoring, supporting creative

facilities and equipment, supporting

startups, matching businesses,

boosting private investment,

supporting overseas expansion

through international co-production,

building one-person media one-stop

platform, holding public-private joint

one-person media competitions,

and conducting one-person media

industry surveys.

On October 29, the establishment of

a one-person media creator training

center as a follow-up to the “One-

person Media Industry Boosting

Plan”was announced. This was the

offline place for one-person media

creators that deliver the trends

of the domestic and overseas

one-person media industry and

provide the policy supported by the

government. In addition, it opened

the “one-person media factory”in

the broadcasting support center of

the Korea Communications Agency

(KCA). As a result, the Ministry of

Science and ICT (MSIT) accelerated

the offline infrastructure project for

providing one-person media creators

with shooting and editing spaces and

public office spaces.

As the concept of broadcasting

that was transmitted based on the

existing radio network gradually

becomes bidirectional based on the

Internet network, one-person media

is expected to expand further in the

future. Similarly, more creators are

predicted to appear in 2019.


04Fiercer Competition in Online Video Streaming Service (Over-the-Top

Service)

The over-the-top (OTT) service as

an online video streaming service

started to bring the attention with

Netflix in 2007. After Netflix, as

Comcast, AT&T, Amazon, and other

media groups started the service,

the OTT service emerged as a video

transmitting service that can replace

TV broadcasting.

Netflix had dominated the market by

introducing original content, big data

management know-how and content

curation services, but from 2019, it

can no longer guarantee its unrivaled

position. This is because competition

is becoming fiercer with Korean and

foreign large operators participating in

the provision of OTT services.

In Korea, terrestrial broadcasters KBS,

MBC, and SBS and mobile carrier SK

Telecom together introduced “Wavve”

in September, which is a service

by the integration of “POOQ”by

the terrestrial broadcasters and

“Oksusu”by SK Broadband. Since

Korea commercialized the 5G service

for the first time in the world in 2019,

the provision of services that combine

SK Telecom’s key business 5G service

and realistic contents is considered

a characteristic of Wavve services.

Typical services include 5G pro-

baseball game multi-view streaming

service, and VR contents.

CJ ENM a l so promoted the

reorganization of the OTT service

“TVING”this year, and plans to

upgrade the TVING service in the

form of a joint venture with JTBC in

2020. As pay-TV channels are rapidly

shifting to OTT services, we believe

that we will focus on developing

monthly pay-based movies and

commerce-based content offering

services.

Following the expansion of the

OTT service, the “OTT Forum,”the

first research organization for the

development of the OTT industry,

was founded on July 16.

The OTT Forum started its first

activity through the seminar

titled ‘Diagnosis and Prospect for

Development of Korea’s OTT

Industry’.

In November, Apple and Disney,

the U.S.’s representative IT and

entertainment companies, launched

their OTT services named ‘Apple

TV+’and ‘Disney TV+’, respectively.

The two companies are at the top

of the US stock market in market

capitalization and making a pitch

for producing and securing original

contents, and they are expected

to change the landscape of the

global OTT industry in the future. In

particular, their low-priced monthly

pay products are expected to

overheat competition.

As such, the OTT market in 2019

shows the fiercest competitive

landscape since Netflix landed in

Korea in 2016. Globally, the OTT

market, which Apple and Disney

have joined together, is expected to

compete based on the vast scale of

funds. As Comcast and Warner Media

notified that they will launch OTT

services in 2020, the future market

will be in the fiercer competition and

this situation makes it difficult for

them to stand their positions among

others.

05Dream of Smart Cities, Industries, and Farms

It’s no exaggeration to say that the

“smartization”craze blew in each

industry sector in 2019. Government

ministries also continued their efforts

to vitalize the industries by launching

various support projects such as smart

cities, smart factories, smart farms,

35

and smart mobility. The Ministry of

Land, Infrastructure and Transport

(MOLIT) focused on building a system

for spreading smart cities from the

beginning of the year. On January 9,

the ministry announced a plan for

recruiting participating companies

in the Smart City Convergence

Alliance to build a sustainable smart

city system centered on the private

sector.

‘Smart City Convergence Alliance’ is

a private-centered consultative body

of large corporations, SMEs, startups,

universities, research institutes,

and association that serves as a

channel to communicate with the

government and performs technology

cooperation between different

types of businesses, development

of business models, improvement

of regulations and systems, and

disseminating and spreading in and

out of Korea. Meanwhile, on January

17, seven “Smart City Service Support

Organizations”were designated under

the ACT ON THE PROMOTION OF

SMART CITY DEVELOPMENT AND

INDUSTRY. The seven organizations

include the Architecture & Urban

Research Institute, Korea Agency

for Infrastructure Technology

Advancement, Korea Research

Institute for Human Settlements,

National IT Industry Promotion

Agency, Land and Geospatial

InformatriX Corporation, National

Information Society Agency, and

Korea Land and Housing Corporation.

The governmental body forced them

to carry out support tasks such as

exploration of policies, improvement

of systems, technology development,

professional manpower development,

and overseas export for the spread

of smart cities. In May 2019, the

Ministry of SMEs and Startups

announced plans for expansion of

smart factories and creating a boom

for manufacturing innovation through

public relations.

The Ministry of SMEs and Startups

together with 12 regional SMEs and

startups offices and 19 manufacturing

innovation centers decided to hold

a total of more than 230 meetings

and sessions by region, and a day of

matching demanding and supplying

businesses. Through this, it led more

than 4,700 companies in each area

to participate in them and made the

organizations guiding governmental

supports and good cases, introduction

effects, etc. and providing one-to-

one consulting by 5 regions.

In April 2018, the Ministry of

Agriculture, Food and Rural Affairs

disclosed a plan for creating four

innovation valleys by 2022 through


a plan for expanding smart farms. Tt

selected Sangju, Gyeongsangbuk-

do and Gimje, Jeollabuk-do as

innovation valleys in 2018, and

Goheung, Jeollanam-do and Milyang,

Gyeongsangnam-do in March 2019.

The innovation valley as a concept

of ICT-based agricultural industry

cluster that integrates training youth

and technology innovation into smart

farms will create, as core facilities,

incubating centers, leased smart

farms, and demonstration complexes.

In the field of smart mobility, plans

for large-scale projects have been

announced. Hyundai Motor Group

announced at CEO Investor Day on

December 4 that it will invest KRW

61.10 trillion by 2025 to become ‘a

smart mobility solution company’.

The company plans to transform its

business nature to a company that

produces smart mobility products and

services in the fields of automobile

manufacturing and sales.

Unveiling a variety of mobility

products, including robotics, personal

aircraft, and ultra-short-range

personal vehicles, Hyundai Motor

Company announced that it will

develop technology even in the fields

of battery and hydrogen fuel-cell

electric vehicles. In addition, it also

announced the completion of the

development of the platform for fully

autonomous vehicles by 2022 and

the mass production from 2024.

06ICT Regulatory Sandbox Gets Innovation Growth

The ICT Regulatory Sandbox program

is a system that exempts or suspends

regulations for a certain period of

time when a product or a service is

launched based on a new industry

or technology in the field of ICT. The

new industries such as converged

technologies and innovative financial

services are emerging one after

another based on ICT, but the existing

regulatory system was difficult to

keep up with these changes.

Therefore, the ICT Regulatory

Sandbox a l lows founders or

businesses to implement their ideas

as products or services out of the

existing business frame in ways of

temporary licensing, post regulation,

or pilot projects.

The regulatory sandbox program

was first introduced in the field

of finance in the U.K. in 2016 and

is already operated in more than

20 countries around the world. In

Korea, as the INVORMATION AND

COMMUNICATIONS TECHNOLOGY

INDUSTRY PROMOTION ACT and

the INDUSTRIAL CONVERGENCE

PROMOTION ACT took effect on

January 17, 2019, the ICT Regulatory

Sandbox program was actively in

effect. Accordingly, for Korea, 2019

is the first year of challenging and

testing the new regulatory policy in

the field of ICT.

The ICT Regulatory Sandbox

Counseling Center of Korea is

operated by the National IT Industry

Promotion Agency. If an individual or

a company applies to the Ministry of

Science and ICT (MSIT), the Ministry

of Trade, Industry and Energy (MOTIE)

or the local government, whether

to be under the regulatory sandbox

program or not will be determined

through the review by the deliberation

committee in accordance with the

laws of related organizations. The

deliberation committee goes through

the reviewing process in consideration

of the public interests such as

innovativeness of new technologies

and services, user benefits, and public

health, and environment.

On October 27, the Ministry of

Science and ICT (MSIT) held the

“7th New Technology and Service

Deliberation Committee” to deal

with 8 ICT Regulatory Sandbox

cases. Eight challenges include a

direct employment-based domestic

service provision platform, a shared

accommodation service for Koreans

and foreigners in center of Seoul

subway stations, demand-responsive

community-type large taxis, mobile

electronic bills of administrative and

public institutions, mobile virtual

reality horse-riding experience trucks,

GPS-based taxi appmeters, a digital

sales slip providing service, and an

automatic scale for weighing trucks

on the road. The eight challenges

were handled through six temporary

licenses or special demonstration

cases , one recommendat ion

fo r improv ing au tonomous

private regulation, and one active

administrative measure.

37

Since the implementation of the ICT

Regulatory Sandbox in 2019, a total

of 113 projects were submitted to the

Regulatory Sandbox to be applied.

A total of 95 cases were addressed

through seven meetings of the

deliberation committee. The Ministry

of Science, and ICT (MSIT) assessed

that over the past year, it dealt with

55 cases of rapid processing, 18

cases of temporary licensing and 22

cases of special demonstration which

resulted in the actual achievement of

the ICT Regular Sandbox and through

this, it brought innovation in various

fields such as digital health care,

shared economy, mobility, VR devices

and electronic documents.

The ICT Regular Sandbox is a system

necessary in the process of creating

and expanding new products or

services based on ICT-related

industries or technologies and then

new industries because existing

regulations are always difficult to

apply to new services, products and

industries. Therefore, in 2019, the

regulatory sandbox program can be

seen to have created a turning point

in the regulatory policy to vitalize the

ICT industry.

07Three Data-related Laws to Realize Data Economy

Three data-related laws indicate

the amendments of the PERSONAL

INFORMATION PROTECTION

ACT, the ACT ON PROMOTION

O F I N F O R M A T I O N A N D

COMMUNICATIONS NETWORK

UTILIZATION AND INFORMATION

PROTECTION, ETC. , and the

CREDIT INFORMATION USE AND

PROTECTION ACT. In the fourth

industrial revolution, the issue of

widespread use of information is very

important. The draft amendments to

the three laws will allow the use and

protection of personal information

to be more effective. They were

already presented to the National

Assembly in November 2018, but

in 2019, they were pending in the

National Assembly for a long time.

The importance of three data-related

laws and their handling brought social

attention.

If the PERSONAL INFORMATION

PROTECTION ACT is amended,

the existing concept of personal

information can be classified into

personal information, pseudonym

information, and anonymous

information to be processed

according to each purpose of use

and efficient management and

processing of personal information

is achieved by integrating personal

information supervision agencies.

Similarly, the core goal of the

draft amendment of the ACT ON

PROMOTION OF INFORMATION

A N D C O M M U N I C A T I O N S

NETWORK UTILIZATION AND

INFORMATION PROTECTION,

ETC. is to address the overlapping

of supervisory bodies on the law

related to personal information and

eliminating confusion therefrom. If

the CREDIT INFORMATION USE AND

PROTECTION ACT is amended, the

large amount of data accumulated in

the financial sector can be analyzed

and the development of financial

products can be actively used.

Accordingly, if the three data-related

laws are amended, data utilization can

take place more actively within the

framework of legal policies regarding

the field of ICT in Korea and even the

related industries are expected to be

more active.

However, 2019 was a year when it

was very difficult to realize the three

data-related laws. Although the

revision of the CREDIT INFORMATION

USE AND PROTECTION ACT was

approved by the Subcommittee

on Review of the Bill, the National

Assembly's Committee on Legal

Affairs on November 28, the bill was

expected to go smoothly. At the

level of the Legislation and Judiciary

Committee before the plenary

meeting on December 10, it was

expected that it would be difficult to

pass the bills of the three data-related

laws due to the pros and cons of the

issues in the National Assembly.

When the three data-related laws are

applied, it is true that there is a high

expectation for the creation of related

services and new industries through

the use of big data composed of

large capacity. However, worse

privacy infringement problems can

be discussed than before. The three

data-related laws can act as a catalyst

to activate services or industries,


but from the aspect of users, with

the growing emphasis on the easy

disclosure and collection of personal

information, there are voices that

point out the detriments of three

data-related laws.

Meanwhile, nine institutions, including

Korea Federation of Banks, Korea

Financial Investment Association,

Korea Life Insurance Association,

Korea Credit Information Services,

and Financial Security Institute,

issued a joint statement calling for

the pass of the three data-related

laws on December 9. The nine

institutions argued that the three

data-related laws must be passed

to innovate services, create jobs in

the data sector, and embrace the

financially underprivileged. Presidental

Committee on the Fourth Industrial

Revolution held the 14th meeting on

December 13 and asked the National

Assembly to pass the laws again,

considering the laws as an important

starting point in the era of the Fourth

Industrial Revolution. Just as the three

data-related laws are the result of

‘Hackathon’of the Fourth Industrial

Revolution Committee, the need for

legislation was further highlighted.

08Regulatory Reform Issues

for O2O Spread

The achievements of Online to

Offline (O2O), a concept that creates

new industries by combining the

advantages of online and offline,

depends on the policy environment.

In Korea, 2019 was a year when

O2O regulatory reform issues were

raised through car sharing. “Tada,”the

mobility platform launched in October

2018, was at the center of the issue.

“Tada”has announced that they seek

a kind of car ride sharing service

that provides a vehicle and a driver

together to consumers using an app

but the taxi industry has taken the

position against it considering that it is

an illegal service without a license.

In February, the concerned officials

from the Seoul Private Taxi Association

accused the officials in “Tada” and this

heated up controversy. In August,

even “Tada”accused the Seoul Private

Taxi Association and the Seoul Taxi

Association of their illegal act to the

Korea Fair Trade Commission and this

exacerbates conflict.

Of course, there was a move

to resolve the conflict between

industries. On March 7, the taxi

associations, Kakao Mobility, the

Ministry of Land, Infrastructure

and Transport (MOLIT), and the

Minjoo Party of Korea announced

a plan for temporarily allowing the

Kakao Mobility Carpool service

during the rush hours on weekdays

through the Taxi-Carpool Social

Compromise Organization. Through

this plan, various alternatives, such

as deregulation for growth of taxi

industry, regulatory innovation-

type platform taxis, and reduction

of private taxis owned by elderly

drivers for national safety, were

proposed. On July 17, the Ministry of

Land, Infrastructure and Transport

announced a “Plan on Reform of Taxi

System for Innovative Growth and

Mutual Development that includes

the detailed contents on social

compromise reached on March 7.

However, this plan excluded the

mobility platform service using rent

cars and the draft amendment of the

PASSENGER TRANSPORT SERVICE

ACT containing the content was

proposed on October 24. These

confirmed the different positions of

the industries.

According to a report titled “Current

Status and Future of Smart Mobility

Service”published in April by the

National Information Society Agency,

a car sharing service was first

launched in Switzerland in 1987 and

it is now being serviced in more than

1,000 cities in more than 60 countries

around the world. Therefore, it is

growing as a large-scale business.

Typically, Uber, which was launched in

the United States in 2009, has now

advanced in 361 cities in 58 countries,

and is now settled as a promising

industry as global automakers are

also entering the car sharing business.

Global automakers are also entering

the car sharing business and they

are settling into promising industries.

39

Accordingly, efforts are being made

globally to prevent the collision

between the car sharing industry and

the existing industry and to reduce

the difference in their positions in

the direction of coexistence. At

the same time, they are seeking

alternatives by drawing up policy and

stakeholders’agreement.

As such, in 2019, at the center of

the regulatory reform issue for O2O

expansion in Korea was a car sharing-

based mobility platform. In other

words, 2019 was a time to see how

O2O regulatory reform issues will

emerge when innovative services in

the O2O field emerge in the future.

09Technical

Competitiveness Secured by Localizing Materials,

Parts and Equipment

2019 was a year of widespread

awareness of the need for localization

of materials, parts and equipment.

The spread of such awareness

began on July 4 when the Japanese

government tightened export

regulations on Korea. On July 1, the

Ministry of Economy, Trade and

Industry of Japan announced the

measures for controlling the export of

Japanese products that are essential

to the production of semiconductors

and displays, etc. in Korea.

Japan took the regulatory actions

against the essential chemical items

such as photoresist, high-purity

hydrogen fluoride and fluorine

polyimide during the manufacturing

of semiconductors and display panels.

The Japanese government's actions

reminded Korea of the necessity of

localization of materials, parts and

equipment.

There was another moment when

awareness and discussion about

localization became more active. That

is why the Japanese government

excluded Korea from the whitelist. On

August 2, the Japanese government

voted for the amendment of the

Export Trade Control Order which

excludes Korea from the whitelist

in which countries get benefits of

simplifying the export procedures

through the Council of Ministers

chaired by the Prime Minister.

S u b s e q u e n t l y , t h e K o r e a n

government's countermeasures

were sought. On August 5, after the

Japanese government excluded

Korea from the whitelist, the Korean

government announced that it

would select top 100 core items

and supply them domestically within

one to five years. The plan included

the stabilization of supply in top 20

items in a year and top 80 items in

five years to reduce the dependence

on Japanese materials, parts and

equipment for Korea. In particular,

the Korean government decided to

assist in securing alternative importing

countries such as the United

States, China, and the European

Union for core materials related to

semiconductors such as hydrofluoric

acid and hydrogen fluoride, and main

and new industries in July.

In the case of companies, actual

localization cases have appeared. In

October, LG Display succeeded in

localizing 100% of hydrogen fluoride

made in Korea, which is used in

Korean factories that produce displays

and panels. It replaced Japanese

liquid hydrogen fluoride to Korean

one by 100%. Samsung Display also

completed the domestic hydrogen

fluoride test, raising expectations

for localization. From the beginning

of September after Japan's export

control measures, the Korean

industry began to introduce domestic

hydrogen fluoride to their factories

for the first time. This resulted from

the actually lowered dependency on

Japanese items in a month.

Korea's manufacturing industry was

evaluated to be highly dependent on


Japan. However, as Japan imposed

export control on Korea in 2019,

awareness has spread that it is

necessary to localize core materials,

parts, and equipment, which are

critical in the ICT field.

10WHO Defines Video Game

Addiction as Disease.

The World Health Organization

(WHO) adopted the 11th revision of

International Classification of Diseases

(ICD-11), which gives a disease

code for 'gaming disorder' at the

72nd General Assembly in Geneva,

Switzerland in May 2019. There

vision will take effect in 2022. If it

is listed as a domestic disease code,

the application of the disease code

in Korea was also possible in 2026.

Therefore, 2019 was the controversial

year in the gaming field.

The medical circle and the gaming

industry have different views in the

WHO giving a disease code for the

gaming disorder. While the medical

circle argues that game addiction

leads pain and some are treated due

to the disorder, the gaming industry

takes the position that it lacks enough

studies and scientific grounds.

Therefore, the pros and cons of this

are expected to continue for a while,

and the government is expected to

prepare countermeasures.

In July 2019, the government

launched a public-private body

in connection with the domestic

introduction of the disease code

for the gaming disorder. It was

organized to gather opinions and to

prepare countermeasures in order

to establish a sound gaming culture

without shrinking the game industry.

The public-private body consisted of

22 members including experts and

professionals from the medical circle,

the game industry, and the law circle,

civil organizations and public officers

from the Office for Government

Policy Coordination, the Ministry

of Health and Welfare, the Ministry

of Culture, Sports and Tourism, the

Ministry of Education, the Ministry of

Science and ICT (MSIT), the Ministry

of Gender Equality and Family,

and the Statistics Korea, etc. in the

governmental part.

The public-private body had a total of

four meetings until November starting

the first meeting on July 23. At the

first meeting, they freely shared

opinions on the background of the

gaming disorder disease code and its

social impact. At the second meeting,

they shared ideas and opinions

from various perspectives, such as

understanding the game industry,

the meaning of the International

Classification of Diseases, and as the

Korean Standard Classification of

Diseases.

Subsequently, the 3rd and 4th

meetings of the public-private

body were held in sessions for

those consenting and opposing the

introduction of the code. At the

session for those consenting it, the

medical circle, the educational circle,

school parents, and civil organizations

attended to share opinions on the

need to introduce the disease code

and argued the problems, side effects,

and risks to adolescents. Meanwhile,

experts from the games-related

academic circle, the industries, the

medical circle, the law circle, and

psychology-related academic world

at the session for those who oppose

it shared the opinion regarding the

problems caused by the introduction

of the disease code. The opposite

side mainly argued that the scientific

and objective grounds for listing the

gaming disorder as a disease code are

insufficient. Besides, concerns were

raised that the introduction of the

disease code may cause problems in

the fields of industry, medical care,

laws, etc. and that the effect of the

stigma of game users along with the

downturn of the industry.

According to the classification of the

gaming disorder as a disease code

decided in May by the WHO, the

relevant controversy and the conflict

between pros and cons are expected

to deepen from the beginning

of the year. Since the deadline is

not long due to the effectuation

of the amendments in 2022 and

the domestic application by 2026,

it is expected that there will be a

movement in a form of expressing

opinions in each field and deriving

relevant grounds from the beginning

of the year.

41

Part 1.1Industry and Service



2. Internet Service


Introduction

The Internet is in for a qualitative change because it is being combined with new

networks such as 5G, the introduction of block chains, and the spread of AI. On April

3, 2019, the world's first 5G mobile communication network based on smartphones

was commercialized. 5G is the core infrastructure of the 4th Industrial Revolution,

which transmits vast amounts of data faster and connects everything in real time,

in comparison with the existing 4G mobile LTE. It's not just fast but super-fast. It’s

a completely different infrastructure than before in terms of being combined with

intelligence. Beyond voice and data communication with humans, the 5G network

connects everything and creates new industries such as innovative convergence services

and advanced devices. It is a driving force for innovative change not only in industry but

also in the whole community, including the public sector, and it is the foundation for

changing people’s lives.

Blockchain is so called the second Internet. Blockchain has evolved from cryptocurrencies

like Bitcoin as a technology of trust that cannot be forged or tampered with but it is now

applied to medical, media, content, distribution, logistics and public services. Blockchain

is revolutionizing the economy and the society through smart contracts that securely

store and trade tangible and intangible assets. Soon, a model of digital currency will be

created.

The development of artificial intelligence also leads the Internet to a world of

intelligence based on data, unlike the previous simple online world. Medical and

educational innovations based on big data and artificial intelligence are taking place.

Users are already getting used to the recommendation systems such as Melon, Netflix

and YouTube. This will spread further into the fields of labor, transportation, welfare and

public services.

1편 Introduction


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2019KOREAINTERNETWHITEPAPER

1

Internet Technology andIndustry


B. Cloud

C. IoT

D. Blockchain

E. Virtual Reality



Current Status of Global AI Market

A global market research institution Gartner announced totally 10 strategic

technology trends for 2020 with the idea of ‘people-centric and smart spaces’in

October 2019. The top 10 strategic technology trends are generally based on the use

and expansion of AI. An economic magazine Forbes in September announced ‘The 7

Biggest Technology Trends In 2020 Everyone Must Get Ready For Now’through the

article written by a well-known futurist Bernard Marr. Of these seven technologies,

four technologies are directly connected to AI: AI as a service, autonomous driving,

personalization and predictive therapy, and computer vision. Four technologies ---

‘AI-as-a-service,’‘autonomous driving,’‘personalized and predictive medicine,’and

‘computer vision’--- of the seven technologies are directly connected with AI.

A consulting firm McKinsey expected that AI will contribute USD 13 trillion to the

global economy by 2030, increase 1.2% of the global GDP, and will be adopted by

roughly 70% of companies worldwide. Markets & Markets, which specializes in

enterprises-centered B2B researches, predicted that the world market for AI will

grow from USD 21.46 billion in 2018 to USD 190.06 billion in 2025, with a CAGR of

36.62%.


Top 10 strategic technologies that will lead 2020 are based on the use and expansion of AI.

Currently, the US, China, and the European Union are leading the global AI competition and

particularly China is increasing its impact. In 2019, as OECD’s new Recommendation of the

Council on Artificial Intelligence were adopted, the first international-level agreement on AI

ethics was reached.

TrafficCongestion 10%

Traffic Accidents 5%

Logistics Efficiency 33%

Health Life Extension 3 Years

Achieving 95% accuracy in early diagnosis of dementia

Manufacturing Productivity 10%

Achieve 95% Accuracy in Detecting Financial Accidents

Arrest Rate Around 90%

Damaged Forest Area 10%

Traffic Logistics

Manufacturing Finance

MedicalAttention

Welfare

Security Safety

[Fig. 1-1-1] Prospects for Use of AI by Sector

[National Strategy for AI, Dec. 2019]


Current Status of Domestic Companies

According to the Institute of Information & Communications Technology Planning

& Evaluation (IITP), domestic AI technology as of 2017 is evaluated to be 78 on

assumption that the U.S. level was 100.

Data technology, which is essential for AI learning, is also at the level of 79%

compared to the level of the U.S., and the data market volume is only 1/400 of that

in the U.S. In Korea, the commercialization of AI services such as voice recognition

AI assistants, AI speakers, smart homes, AI interviews, and AI video analysis is

actively on progress, centering on large domestic IT companies such as Samsung

Electronics, LG Electronics, KT, Kakao, and Naver but still, there is a considerably big

gap from global leading companies.

Current Status of Domestic Policies

On January 16, 2019, the government announced the ‘Plan for Boosting Data and AI

Economy’(2019-2023) that specifies the ‘I-Korea 4.0 Strategy’and ‘the 6th National

Informatization Master Plan’(2018-2022) announced in the previous year by the

government at a joint conference of the relevant ministries. The detailed goals of

producing at least 10 AI-related unicorn companies, achieving data market size of

KRW 30 trillion, increasing the AI utilization rates of domestic companies up to 25%,

the world’s highest level, and training more than 10,000 workers for data and AI in

center of three strategies and nine focused challenges by 2023. In December 2019,

the National Strategy for AI with the aim of ‘the leap forward to AI powerhouse

beyond IT powerhouse’was announced with the President’s basic AI-related idea

(October 28, 2019). With the core strategies of innovating AI competitiveness, fully

using AI, and harmonizing and coexisting with AI, nine strategies and 100 challenges

in three areas are presented and the pan-government capabilities to become an AI

powerhouse are gathered.

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B. Cloud

Current Status of Domestic Market

Korea amounts to only 0.6% (USD 730 million) of the global cloud computing

market. Korea’s cloud computing market is expected to grow at an average annual

rate of 14.8% from KRW 796 billion in 2017 to KRW 1,304.1 billion in 2021 (Internet

Data Corporation, Jun. 2017). While the overseas cloud computing market grows in

center of SaaS, the domestic market is growing still in center of IaaS of 52.1% with

SaaS of 41.1%, and PaaS of 6.7% as of 2017 (IDC, Jun. 2017).

Among Korean companies, IT companies including KT, NBP, LG CNS, SK,

Samsung SDS, NHN Entertainment, Douzone Bizon, and YoungLimWon Soft Lab

are actively advancing to the cloud computing market. The number of companies

specializing in cloud computing and their sales are steadily increasing. As of 2018,

804 companies gained the sales of KRW 2,405.9 billion.

According to Gartner, the domestic public cloud market is expected to grow 22%

to KRW 2.44 trillion in 2019 compared to the previous year and then to KRW 3.44

trillion up at the annual average rate of 20.5% by 2021 but it amounts to only

0.6% of the global cloud computing market. According to KDB Monthly Bulletin

in January 2019, IaaS and PaaS are expected to grow fastest in the global market.

Contrarily, the Korean market will grow 136% in SaaS, 106% in IaaS, and 104% in

PaaS in 2021 compared to 2017. SaaS is expected to amount to the largest ratio by

occupying 43.4% of the whole market.

Cloud computing is an essential infrastructure for the 4th Industrial Revolution and a

service that allows large amounts of data to be easily stored, managed, utilized, and

analyzed anytime, anywhere as the core technology for the hyper-connected society in the

future. Unlike SaaS-oriented foreign computing markets, the domestic cloud computing

market in center of IaaS is growing rapidly and is trying to expand in the private market.



Future Prospect

There are 804 domestic cloud computing companies, accounting for around 10%

of all software companies but the growing trend of the domestic cloud computing

service market is clear. In particular, the market is expected to grow in center of

SaaS. According to the data released in September 2018 by Gartner, Korean SaaS

end users spent roughly KRW 840.4 billion in 2018 which would amount to almost

half of spending on the whole cloud computing services and their spending was

expected to exceed KRW 1 trillion in 2019. The public market is also expected

to increase significantly according to the plan of the Ministry of the Interior

and Safety to expand the use of private cloud computing services in the public

sector and even the private market is expected to conduct expansion. According

to the Plan for Introduction and Expansion of Cloud to the Financial Sector by

the Financial Services Commission, personal credit information and personal

identification information will be allowed for the cloud computing services from

2019, which will give great influence over the financial IT industry.

No. of Com-panies

Sales in Cloud

IaaS PaaS SaaS CSB/CMS SEaaS Other

Total (804) 2,405,973 1,256,450 112,375 500,085 393,586 115,414 28,063

No. of Workers

1~9 (189) 41,754 25,312 702 11,594 67 3,365 714

10~29 (268) 165,627 58,198 4,918 63,987 3,277 34,381 865

30~99 (200) 401,071 216,272 19,663 70,284 1,349 74,030 19,473

100~299 (93) 503,619 342,514 11,503 105,406 41,794 2,118 283

Over 300 (54) 1,293,903 614,155 75,589 248,814 347,099 1,519 6,727

Company Size

Middle or Large Standing

Companies

(64) 1,362,241 592,127 75,589 252,026 388,562 47,210 6,727

Small Companies

(740) 1,043,732 664,323 36,786 248,059 5,024 68,204 21,336

Service Models

IaaS (314) 1,143,579 1,117,722 13,587 3,872 1,495 6,619 283

PaaS (55) 92,318 236 91,727 - 0 - 355

SaaS (336) 499,551 538 1,424 494,033 3,485 71 -

CSB/CMS (17) 531,448 136,953 320 - 387,606 - 6,569

SECaaS (42) 115,047 1,000 2,000 2,165 1,000 108,724 158

Other (40) 24,029 - 3,316 15 - - 20,698

(Unit: KRW, 1 Million)[Table. 1-1-1] Sales in Cloud

[National IT Industry Promotion Agency Korea, 2018, Survey of Cloud Industry, 2018]

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C. IoT


The Korean government defined the 4th Industrial Revolution as a hyper-

connected intelligent revolution and launched the world’s first commercial service

of the 5G mobile communication network as a hyper-connected intelligent

infrastructure in April 2019. The domestic IoT-related policies are comprehensive

as policies to solve social and economic problems through the convergence of

information and communication technology, which is a technology that drives

the 4th industrial revolution away from independent policies in the past IoT field.

While the policies for only IoT technology was established and implemented at

the stage of research and development, the IoT technology, is now, at the stage of

use. Therefore, the innovative service policies with businesses that can be created

through convergence with other technologies became required. In “the Plan for

Fourth Industrial Revolution in Center of People with Science, Technology and

Information and Communication Technologies”announced by the government, the

government is increasing the investments to strengthen investments for healthy

and safe lives, promote convergence projects for healthy and pleasant lives, and

promote convergence projects for public safety. This reveals that the goal of the

policies has been changed not to individual technology policy but to services-

centered policies. As the number of manufacturing workers decreased from 4.589

million in 2017 to 4.514 million in 2018, the government announced the policies

of lifting regulations related to new industries such as IoT to attract corporate

investments and creating more than 100,000 jobs by 2022.

Current Status of Services

The applications that are recently growing rapidly include autonomous vehicles,

drones, and robots, etc. While the integration of IoT technology is expanding, it

As the service functions become more diverse and richer, the concept of IoT has been

expanded beyond the interconnection to the areas of application services that can utilize

and interact with information connected to the Internet. Applications that are recently

growing rapidly include autonomous vehicles, drones, and robots, etc. and they are

expected to enter the stage of full-scale growth in 2020.



Healthcare / Medical Care /

Welfare

27.9

17.8

12.410.9 10.6

5.2 5.0

3.42.5 2.0

1.1 1.1

Smart Homes

Energy Manu-facturing

Automobiles / Transportation /

Aviation / Aerospace / Shipbuilding

Construction & Facility

Management / Safety /

Environment

Finance Retail / Logistics

Education National Defense

Agriculture, Livestock / Fisheries

Tourism / Sports

[Fig. 1-1-2] IoT Service Field

[National IT Industry Promotion Agency Korea, 2018]

(Unit: %)

becomes common that businesses in the fields of different industries are linked

to each other to create diverse and effective values. The linkages between smart

home, smart grid, smart car, smart transportation, and smart environment

are developing into a huge new service called smart cities. In addition, when

manufacturing and distribution meet IoT, not only improved productivity but also

effective inventory management can be achieved and this can allow relatively high

profits. As the IoT technology is fully integrated, it can be found that changes in

competition structure, border expansion and integration become common. The

figure below shows the IoT service sector that is expected to be activated.

Future Prospect

As the real-time, intelligent personalized services are available due to the

introduction of IoT by industry and the drop of prices of sensors, IoT is expected

to enter the stage of full-swing growth in 2020. The number of things connected

to the Internet is rapidly increasing with more than 50 billion connections between

global devices and the market fused with IoT technology will be at the fully

growing stage and it is expected to grow to more than USD 1 trillion by 2022. The

economic ripple effect is expected to reach at least USD 3.9 trillion by 2025.

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D. Blockchain

Current Status of Global Market

According to the announcement of a global research firm IDC (in Sep. 2019), the

blockchain-related market size is estimated to become USD 15.9 billion in 2023

with an average annual growth rate (CAGR) of 60.2% for five years from 2018 to

2023. In 2019, the Blockchain market is expected to reach USD 2.7 billion up by

80% compared to the previous year. As general companies are steadily introducing

blockchain, companies that have confirmed the technical values are switching their

businesses to the blockchain business. Meanwhile, Facebook, a SNS company, is

planning to issue a stable coin, “Libra,” by 2020 by building a blockchain-based

payment platform (Libra) with more than 100 participating companies.

Meanwhile, Facebook, a social media company, will implement a blockchain-

based payment platform with more than 100 participants to issue ‘Libra,’ a stable

cryptocurrency, in 2020.


The Korean government is developing the mid- and long-term plans to support

the development of blockchain technology and industry while pushing ahead with

regulations to prevent virtual currency speculation.

The Ministry of Science and ICT (MSIT) and the Institute of Information &

Communications Technology Planning & Evaluation (IITP) established the ‘National

ICT R&D and Innovation Roadmap 2023 (Blockchain Field)’ in December 2018 by

comprehensively analyzing domestic and foreign blockchain technology, industry

and policies and actively promoted the blockchain technology development with

the goal of achieving 90% (until 2022) compared to the world’s best technologically

advanced countries.

In order to apply blockchain technology to the fields of various industries, the

government expanded support for core technology development challenges such as

Blockchain is a distributed ledger technology that can safely handle data and transactions

without intermediaries. Starting from the first generation represented by Bitcoin,

Blockchain is developing into the third generation with the new structure and maximized

application efficiency, being more applied in a variety of industrial fields.



blockchain storage technology, optimal technology, and heterogeneous blockchain

interworking technology to compensate for the lack of current technology (scalability,

interlocking, processing speed, etc.) (from 5 new challenges in 2018 to 5 on-going

challenges and six new challenges in 2019). In addition, the government is developing

blockchain-based application platform technologies such as decentralization,

immutability, and transparency to explore the fields that can maximize the benefits

of the blockchain, including fraudulent transactions, supply and demand, issuance

and distribution of electronic documents, content transactions, and logistics and

distribution information tracking (six new challenges in 2019).

Current Status of Domestic Market

The domestic blockchain market is expected to reach about KRW 350 billion by

an average annual growth of 61.5% by 2022. Blockchain technology is spreading

to various industries such as finance, medical industry, education, manufacturing,

distribution, home appliances, energy, safety and transportation. Korea is

expanding the alliance and investments to introduce technologies in center of the

financial industry, and the project of using and applying blockchain technology in

center of the ICT-based companies instead of financial institutions is at the initial

stage. Until now, there have been domestic investments in technology on a small

scale but after commercialization and tangible results, new investment climate is

expected to expand to non-financial sectors.

123 201324

524

846

1366

2206

3562

2015 2016 2017 2018 2019 2020 2021 2022 0

500

1000

1500

2000

2500

3000

3500

4000

[Fig. 1-1-3] Korean Blockchain Market Size

[Korea Institute of Science and Technology Information, 2019]

(Unit: KRW, Hundred Million )

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Fields 2016 2017 2018 2019 2020 2021

Total3,193.8

(100.0)

5,418.4

(100.0)

10,209.0

(100.0)

21,262.2

(100.0)

50,180.2

(100.0)

90,868.9

(100.0)

Mobile AR780.0

(24.4)

792.1

(14.6)

3,800.1

(37.2)

11,735.2

(55.2)

30,265.9

(60.3)

57,894.8

(63.7)

Smart Glasses377.5

(11.8)

606.3

(11.2)

794.5

(7.8)

1,407.3

(6.6)

9,045.0

(18.0)

14,864.8

(16.4)

Premium AR1,508.3

(47.2)

2,468.2

(45.6)

3,029.5

(29.7)

4,455.0

(21.0)

6,179.0

(12.3)

12,063.0

(13.3)

Mobile VR527.9

(16.5)

1,551.9

(28.6)

2,584.9

(25.3)

3,665.1

(17.2)

4,690.2

(9.3)

6,046.4

(6.7)

[Table. 1-1-2] VR/AR Market Size Forecast

[Source: NIPA, VR/AR Industry Status and Outlook, 2018]

(Unit: USD, Million)

E. Virtual Reality

Korean VR Industry

In the past, there were numerous question marks about VR, but it, as a future

industry, has explored applicability in various fields and has invested and improved

the technology evolution. With such efforts, the public approach to VR began

in 2014 based on mobile devices and the movement forward, including the

appearance of hardware and platforms for high quality of VR was not stopped.

There are still a lot of people who need to make technical improvements and

question the side effects of the VR to bodies and the scale of its industry, but this

atmosphere is slowly softened through active participation of domestic and foreign

tech companies.

In particular, Korea’s VR industry tended to focus on the B2B market, such as

education, training and VR attraction, rather than the B2C market until 2018 but as

mobile carriers that intended to boost the killer service for the 5G network started

to make investments in 2019, VR is gradually developing. While implementing

the VR platforms, three mobile carriers including SK Telecom, KT, and LG U+

in addition to the launch of the 5G service are raising public interest through

advertisement and public relations by supplying VR headsets.

VR is a step forward in popularization as a means to experience 5G-based immersive

content and XR 1.0, a standard for making applications of VR and augmented reality work

consistently on different hardware was officially released.



Current Status of 5G-related VR Service

It was in December 2018 that Korea declared commercialization of the 5G network

for the first time in the world. As the 5G network for enterprises (B2B) was opened,

Korea was registered as a country that started the world’s first 5G service, and

launched the 5G service for general users in April 2019. Because the 5G network is

a wireless network with high bandwidth and low latency that allows more data to

be sent to thousands of devices in near real time, it has been expected to bring the

change of mass-capacity digital media contents.

VR has been regarded as a representative industry along with augmented reality

in numerous fields for the large-capacity ultra-low delay characteristics of the 5G

network. Due to the expected increase in the consumption of immersive content

in the 5G network environment, the industries have had far more interest in VR.

Actually, after the commercialization of the 5G network, the three mobile carriers

are investing in the VR field. In order to create a realistic media environment

that users can experience, they provided VR headsets for 5G subscribers free of

charge or at low prices, and started realistic media services through their own

content platforms. Besides, they are operating 5G experience halls where people

can experience the 5G service before joining it to promote the VR through which

people can experience realistic contents.

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1) O2O Service

The government announced the Plan for Boosting Sharing Economy in January

2019, emphasizing the need for boosting the Online to Offline (O2O) service as a

platform for mediating sharing. The O2O service is a rapidly growing industry due

to the spread of smartphones and service innovation regardless of time and place.

As of June 2019, it gives great impact enough to account for most of the business

models of eight domestic unicorn companies.

The O2O service is an industrial field that needs governmental policy support to

boost the sharing economy and increase the global competitiveness of the industry.

It enters the market faster than existing industries by providing innovative ideas-

based business models as applications. It is expected that the market paradigm will

be changed with the companies which enter the market rapidly with differentiation

The O2O service, a platform for mediating sharing, is growing rapidly. The O2O service

has a characteristic of fusing various types of services and enters the market faster

than existing industries. The sharing economy Is an economic model for sharing assets

and services using platforms and transportation, accommodation, and space, etc. are

emerging as the trading fields for the Sharing Economy thanks to the created trading

environment through mobile and online trading.

Classification (Order of

Designation)Company Name Service Service Type

1 Coupang Coupang O2O and E-commerce

2 KRAFTON BATTLEGROUNDS Game

3 yello mobile Coocha, Pikicast Online Contents

4 Woowa Brothers Baedal Minjok O2O

5 L&P Cosmetic Sheet Mask Cosmetics

6 WEMAKEPRICE WEMAKEPRICE O2O and E-commerce

7 Viva Republica toss O2O and FinTech

8 yanolja yanolja O2O

[Table. 1-1-3] Unicorn Companies and Services in 2019

[Ministry of SMEs and Startups (MSS), Media Report cited, 2019]



creating markets and expanding market share.

Except existing e-commerce companies among the domestic O2O unicorn

companies as mentioned in the introduction above, most started as start-up

companies and preoccupied the market. Their values and sales are increasing every

year. This is the result of cooperation between suppliers and O2O service providers

and increased demand from users.

Cooperation between suppliers and O2O service providers is actively made in the

fields of food and accommodation that lead the domestic O2O industry. In order

that suppliers such as living service providers and employment agencies secure

global market competitiveness in preparation for global O2O service companies’

entry into Korea, governmental support is required for enhanced capabilities and

job trainings of suppliers and advancement of services through convergence with

new technologies such as 5G, AI, and IoT. The government needs to systematically

push ahead with the actual surveys of the O2O industry and establish it as a

special industrial system.

2) Sharing Economy and Subscription Economy

Recently, Korea has shown a paradigm shift of ownership to collaborative

consumption in sharing due to the increase in single-person households. In

addition, as the real-time peer-to-peer trading environment is created through

mobile and online, transportation, accommodation, space, etc. are emerging as the

major fields of the transactions in the sharing economy. In terms of market size,

the Korea market is still smaller than the world market but the demand is growing

rapidly due to high participation in the 20s and 30s and high interest in the 40s

and above.

To respond to the change in the paradigm of the sharing economy and create

a new service market, the government in January 2019 announced the Plan for

Boosting Sharing Economy that includes boosting the sharing economy by field

and establishing the systematic foundation for the sharing economy by reforming

the regulations on entry, etc. The Plan for Boosting Sharing Economy is to promote

the creation of innovative sharing platforms and increase the economic efficiency

through the sharing economy and the challenges and main contents are as shown

below.

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Depending on the subjects of sharing, the sharing economy is often classified

into peer-to-peer (P2P) transactions through which individuals need and provide

specific services and business-to-peer (B2P) transactions through which companies

with assets lease or rent such assets in a short term. In the private sector, the

commercial businesses in the sharing economy such as accommodation sharing,

ride sharing (carpool service), and talent sharing (freelancer, etc.) are growing in

a form of P2P such as accommodation sharing, ride sharing (carpool service), and

talent sharing (freelancer, etc.). According to the survey by the Bank of Korea, the

size of P2P transactions through the digital platforms has increased nearly 10 times

from KRW 20.4 billion in 2015 to KRW 197.8 billion in 2018.

The regulatory policy is recognized as an important factor for boosting the sharing

economy. In the sharing economy, differences in positions and conflicts can be

highlighted. Therefore, it is common to prefer a positive regulatory approach in

pursuit of “allowances in principle and exceptional limits” in sectors that seek new

services through the sharing economy. The regulatory sandboxes promoted by the

government is a transitional policy to quickly verify and institutionalize various

innovative services in the field by applying partial positive regulation in limited

scope and regions.

The market size of the global sharing economy is growing significantly. According

to the Juniper Research report in 2017, the global market is expected to expand

from USD 18.6 billion to USD 40.2 billion by 2022. Therefore, the major countries

of the world seem to pay attention to the sharing economy as an important factor

that can change the existing economic structure in terms of economic growth,

employment, etc., and are supporting various policies.

3) Data Economy

The domestic data market is expected to grow from KRW 14 trillion in 2018 to

Project Main Description

Boosting Sharing Economy by Field①Field of accommodation ②Field of transportation

③Field of space ④Other fields such as finance, and knowledge

Systematic Foundation of Sharing

Economy

①Arrangement of taxation system

②Protection of employees and consumers

③Support for innovation of sharing economy companies

[Table. 1-1-4] Plan for Boosting Sharing Economy

[Summary of Plan for Boosting Sharing Economy, 2019]



KRW 30 trillion by 2023. In terms of opening public data (For the U.S., 250,000

data; For Korea, 32,189) and big data utilization, it is evaluated that they are not still

insufficient, but this resulted from insufficient professionals and the infrastructure

and the legal and systematic environment such as protection of strict personal

information.

Recognizing the importance of the data economy, the government has been

actively pursuing various policies for the data economy after announcing the “Plan

for Boosting Data and AI Economy” in January 2019. In 2019, the main promotion

policies are:

The National Information Society Agency’s project for constructing big data

platform and centers was funded at a total of KRW 64 billion in two rounds to

select 10 challenges: 72 centers in the 1st round and 28 in the 2nd round to connect

with platforms by field.

The National Information Society Agency plans to build and publish AI learning

data and release at least 25 million data in 2019. In April 2019, more than 25 million

data were already released and more than 44 million data including the already

released data will be expanded. All data will be published as an open dataset at AI

hubs. In addition, it is establishing the survey for demands on the datasets to be

added every year and strategies with external experts.

The data voucher project hosted by the Korea Data Agency supports 660 cases

in the first round and 980 in the second cases, and selected 17 specialized

professional agencies by field. The data voucher project, as a project that supports

the costs of purchasing data or performing data processing services, is subject to

SMEs, startups, and small business owners. It plans to execute the budget of more

than KRW 60 billion in 2019.

The National Information Society Agency organizes the Data Economy Forum to

discuss key policy directions and issues related to the data economy each month,

and introduces data economy-related information and important policies to related

companies and the public through two public seminars. It is actively working while

operating professional research groups including the AI and data research group,

and the quality standardization research group. It also started to publish “AI and

Data Insights” in October.

The Financial Supervisory Service of Korea (FSS) announced that it would open

roughly 22,000 financial contents in an open API in May 2019, expand the open

API of the Data Analysis, Retrieval, and Transfer System (DART) in June and

introduce the opening banking system to all the banks. Through this, Fintech

companies also provide integrated account services through open API, and are

actively pursuing My Data businesses.

The Korea Institute of Science and Technology Information (KISTI) is conducting

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a national research data platform pilot service that started in 2018 and provide

research data on more than 25 government-funded research institutes and 20

major universities. In particular, it is linked with ‘Open AIRE’, Europe’s largest

research data platform.



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2

Internet Services


B. Communication


D. e-Commerce

E. Location Information


Overview

The market for Internet information search, formerly known as “search = portal”,

is undergoing a change in the expansion of search platforms and devices. The

expansion of the search platform refers to the activation of new search platforms,

such as representatively YouTube, in place of portals, which are the most

representative search platforms. In essence, YouTube is a platform for sharing

video contents, but it has been used as an information retrieval platform because

its video contents in various fields have been accumulated for a long time and

have significant values as search results.

Current Status of Domestic and Foreign Search Engines

Among major PC-based search engines in Korea, Naver has maintained the highest

share of search queries every year since June 2016 and took the highest rate with

the share of 71.1% in June 2019. While Daum, the next highest ranked engine,

has maintained around 16% market share over the last four years, Google, which

continued to rise in share, grew by 3.2%p to 9.9% in June 2019 compared to the

same term of 2016.

The market for Internet information search is undergoing a change in the expansion

of search platforms and devices, and in particular, advances in speech recognition

technology have resulted in improved search accuracy and popularization of devices

that can recognize and process speech.

2. Internet Services


When looking at the current status of the share of the search queries of Korean

mobile web-based major search engines in Android browsers with all versions of

Android operating system, Chrome 6.0 or below, and Samsung S version 7.0 or

below, Naver has the highest share in mobiles as well as PCs with the share of

68.2% in June 2019 but its market share declined 4.7%p from June 2016. Daum

took the market share of 17.2% in June 2019 up by 4.1%p compared to 2016 while

Google took 14.5% in June 2019 with the four-year share of 15%.

In June 2019, Google took 88.8% share, which is the highest, among major foreign

mobile search engines was the highest in the same market just as shown in PCs.

Compared to June 2018, its share increased by 11.0%p. Baidu's market share was

19.8% in June 2018, but it fell by 11.9%p to 7.9% in June 2019.

[Fig. 1-2-1] Current Status of Share of Search Queries of Korean PC-based Search Engines

[Nielsen Korea, www.koreanclick.com, 2019]

1-2-1-(1)

Bing

ZUM

Google

Daum

Naver

74.8% 74.7% 72.2% 71.1%

16.6%

6.7%

15.3%

7.3%

16.4%

8.6%

16.2%

9.9%

2016. 6. 2017. 6. 2018. 6. 2019. 6.

[Fig. 1-2-2] Current Status of Share of Search Queries of Major Foreign Mobile Search Engines

[Netmarketshare, netmarketshare.com, 2019]

1-2-1-(4)

91.0%

4.0%3.0%

94.0%

2.0%1.4%

88.8%

7.9%1.5%

2016. 6. 2017. 6. 2018. 6. 2019. 6.

77.8%

19.8%

0.8%

Other

Yahoo

Baidu

Bing

Google

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Future Prospect

Thanks to the widespread of devices that can improve search accuracy and

recognize and process speeches with the advancement of voice recognition

technology, search through ‘voices’ is gaining attention. Smartphones are the

representative voice search-available devices already owned by most of the Korean

people. In case of AI speakers as another voice search devices, more than 8 million

units will be accumulatively sold at the end of 2019. Since AI speakers are not

personalized devices, unlike smartphones, they will soon become popular if the

number of users at the actual touch points are more than the number of devices.

In addition, voice recognition is applied to various smart home appliances and

smart vehicles equipped with voice recognition will also be commercialized soon.

Therefore, voice search devices will become part of our daily lives.



B. Communication

1) Instant Messenger

Of the domestic mobile users, 38.54 million, or 98.8% used instant messengers

for a monthly average of 1,114 minutes per month in the last month. The monthly

average time of use of the mobile instant messengers by those in the 20s and 30s

were 1,534 minutes and 1,320 minutes, respectively, who are actively using mobile

instant messengers compared to the other age groups.

2) Social Media

Of the Korean PC users, 14.54 million or 46.0% used social media services for

monthly average of 36 minutes in the last month and 31.75 million or 81.4% of

the mobile users used monthly average of 655 minutes. In terms of the user size,

mobile social media services are widely used by a variety of age groups in their

20s to 50s but in terms of activities, it can be found that young age groups from

Communication services such as instant messenger and social media have grown rapidly

thanks to the spread of smartphones and have become indispensable services in our

daily lives, evolving into a platform by combining various services based on the network.

[Fig. 1-2-3] Current Status of Korean Mobile Instant Messengers

[Nielsen Korea, www.koreanclick.com, 2019]

0

200

400

600

800

0

400

800

1,200

1,600

Teens 20s 30s 40s 50s 60s

1_2_2_(1)

Number of Net Users (Ten Thousand Persons)

Ten Thousand Persons Min.

Average Usage Time (Min.)

3,854Ten Thousand Persons(98.8%) 1,114Min.

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teens and those in the 20s use more frequently than the other age groups.

3) email

Of Korean PC users, 20.64 million or 65.3% used emails in the last month and

they used average 74 minutes per month while 12.11 million or 31.0% of mobile

users used average 23 minutes per month. This proves that emails are mostly used

through PCs and accessorily used through mobiles. The age groups that use emails

most using PCs and mobiles appeared to be in their 30s and 40s.

[Fig. 1-2-4] Status of Social Media Using PC/Mobile in Korea

[닐슨코리아, www.koreanclick.com, 2019]

Teens 20s 30s 40s 50s 60s Teens 20s 30s 40s 50s 60s

800

600

400

200

1,600


1,200

800

400

0 0

800

600

400

200

1,600

1,200

800

400

0 0

Number of Net Users(Ten Thousand Persons)

Average Usage Time(Min.)




14.54 Million Persons (46.0%) 36 Min. 31.75 Million Persons (81.4%) 655 Min.

PC Mobile

[Fig. 1-2-5] Status of E-mail Using PC/Mobile in Korea

[닐슨코리아, www.koreanclick.com, 2019]

600

400

200

0

150

100

50

0

600

400

200

0

150

100

50

0Teens 20s 30s 40s 50s 60s Teens 20s 30s 40s 50s 60s







20.64 Million Persons (65.3%) 74 Min. 12.11 Million Persons (31.0%) 23 Min.

PC Mobile




Now, fintech is making a big impact around the world and the global investments

into fintech were just USD 4.05 billion (KRW 4.8 trillion) in 2009, 10 years ago, but

in 2018, the investments exceeded USD 100 billion (KRW 120 trillion). This means

they increased by 46.5% every year and the number of investments during the

same period was sharply increased by 8 times from 366 to 2,966.

In Korea, fintech is becoming a core policy of the financial authority, and a

great change is taking place in the fintech sector. In particular, the SPECIAL

ACT ON FINANCIAL INNOVATION SUPPORT was implemented in 2019, and a

total of 53 innovative financial services were designated as of October 2019. An

innovative financial service is a system for temporarily deregulating the market

and consumers to test innovative financial services in the market. This is part of

the financial testbed, along with a designated agent system and a consignment test

system.

1) Internet Banking１)

Current Status of Internet Banking and Mobile Users

(1) Number of registered customers: As of the end of June 2019, the number of

Internet banking service registered customers was 146.56 million up by 8.5%

compared to the end of 2017.

(2) Types of use of mobile banking service: Based on cases and amount (except

inquiry service) in 2018, the number of cases of using inquiry and fund transfer

and loan application services through Internet banking (including mobile banking,

daily average) was 118.97 million up by 25.3% with the amount of KRW 52,155.7

billion up by 19.9%, respectively.

1) Bank of Korea, Current Status of Use of Domestic Internet Banking Service in 1H of 2019, 2019

Fintech is a new financial service through convergence of finance and information

technology, such as internet banking, P2P and cloud funding. In particular, Insuretech

(compound of insurance and technology) is an innovative insurance service that

utilizes IT technologies such as artificial intelligence, IoT, and big data and it is

expected to grow rapidly.

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2) Wire Transfer and Payment

Currently, the proportion of electronic payment services using the fintech industry

is increasing. Customers can easily pay using their mobile devices when purchasing

goods or services online or offline. In fact, there are mobile-easy payments and

mobile cards that can be used for wire transfer and payment services with QR

codes or applications with their mobile phones.

3) P2P and Cloud Funding２)

Crowdfunding refers to the way a venture founder or a small business entrepreneur

receives financial support online, unlike the existing stock listing. This allows

small companies with ideas to invest from an unspecified majority through

intermediaries. Starting with the accumulated amount of KRW 89.1 billion in May

2016, the domestic P2P loan market exceeded KRW 3,184.9 billion at the end of

December 2018. As of the end of August 2019, the cumulative amount was KRW

4,735.8 billion. Crowdfunding reached a cumulative amount of KRW 130 billion as

of the end of 2018, and regulations are gradually loosened.

4) Asset Management

Robo-Advisor, as a compound of robot and financial advisor, means a robot-

based AI investment platform where algorithm is the center of investment. In the

report released by the KEB Hana Bank HAI Robo Center, the Korean Robo-Advisor

market size is about KRW 1 trillion in 2018 and it is expected to double to KRW 2

trillion in 2019 compared to 2018. Furthermore, the market will grow to KRW 25

trillion by 2023 and KRW 30 trillion by 2025.

5) Internet-Only Bank

Internet-only banks must be operated in ways of electronic financial transactions

(transactions under Article 2(1) of the ELECTRONIC FINANCIAL TRANSACTIONS

ACT) in accordance with Article 102(1) of the REGULATIONS ON SUPERVISION

OF BANKING BUSINESS. In other words, Internet-only banks provide financial

2) Korea P2P Finance Association, Monthly Disclosure of P2P Loans, 2019



products and services through electronic devices (CDs, ATMs, computers,

telephones, etc.) and users use financial products and services in an automated

manner rather than the face-to-face method.

6) Insuretech

Insuretech in the domestic insurance industry is developing rapidly as it was

introduced late. In the early days, only products related to driving habits were

released in center of non-life insurers but recently, large insurers as well as fintech

firms are rapidly increasing Insuretech products. Besides, customized insurance

and natural disasters-related insurance using various electronic devices were

launched and thanks to the introduction of AI and blockchain, significant changes,

such as premium discounts or early insurance payment, are appearing. In 2019, as

an innovative financial service, ‘On-Off Insurance’ that can allow insurance to be

turned on and off when needed with a single subscription when traveling abroad

also appeared.

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D. e-Commerce

Domestic Online Shopping Trends

In 2018, Korea’s online shopping transactions amounted to KRW 113.7 trillion, up

20.8% year-on-year. Over the past four years, online shopping transaction volume

has grown at an average rate of 26.2% each year, hitting the highest record among

the retail businesses. (This is because statistics increased significantly in 2017 due

to changes in the survey method by the National Statistical Office.)

In 2018, mobile shopping transactions amounted to KRW 69.1 trillion, up 30.6%

from the previous year, accounting for 60.8% of total online shopping transactions.

It can be found that since 2016, when mobile transactions exceeded PC-based

transactions, mobile transactions have continued to increase and the ratio of

mobile shopping and internet shopping was divided into 61% and 39%.

It appeared that while the use of internet shopping for cultural and leisure services

(9.7%) fell 21%, mobile shopping increased by 45.5%. In addition, the boom in the

O2O service providers that provide a variety of delivery services led the relative

transaction ratio and the increase rate compared to the previous year to become

high.

According to Statista, global retail e-commerce sales totaled approximately USD 2.8

trillion in 2018, which is up by 21.7% from the previous year (with USD 2.3 trillion)

and it is expected to increase to USD 4.9 trillion by 2021. Similar to the domestic

situation, the growth of the global e-commerce market is driven by mobile

electronic devices.

The volume of online shopping transactions is growing every year and mobile

shopping particularly accounts for 60.8% of total online shopping transactions. This

is the same for the global e-commerce market, where mobile electronic devices are

driving the growth of the market in large part.

Year 2015 2016 2017 2018

Online Shopping Transaction

Value 54,055,617 65,617,046 94,185,765 113,729,692

Year-On-Year Increase and

Decrease Rates 19 21.4 43.5 20.8

[Table. 1-2-1] Online Shopping Transaction Value (2015-2018)

[Source: Statistics Korea, Korean Statistical Information Service’s Report on Online Shopping Survey, 2018, http://kosis.kr, 2018]

(Unit: : KRW, Million, %)



Cross-border Online Shopping Trends

In 2018, 81.0% of overseas direct sales came from duty free shops, among which

92.7% were taken by China. The sales amount of each item through duty-free

shops ranked first in cosmetics (KRW 2,706.1 billion), second in clothing and

fashion goods (KRW 512.8 billion), and third in home appliances, electronics and

telecommunications equipment (KRW 99.2 billion). The rankings were same as

those in the previous year. Compared to the previous year, cosmetics increased by

nearly KRW 800 billion from KRW 1,989.6 billion in 2017, and apparel and fashion

products increased by about KRW 300 billion won compared to the previous year

(KRW 225.4 billion). It can be found that the popularity of the Korean wave cultural

contents such as K-COSMETICS and K-POP leads consumption of related products

to increase. In 2018, 97.2% of online direct purchase transactions was concentrated

in 4 countries: of the U.S. (52.6%), EU (20.8%), China (17.2%), and Japan (6.6%) in

order based on the transactions-based share rates.

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E. Location-based Service (LBS)

The LBS means a service that provides various kinds of information related to

location, such as location tracking service, public safety service, location-based

information service, etc. by attaching chips connected to base stations or a global

positioning system (GPS) to portable terminals such as smartphones. Briefly, the

LBS provides various services based on location information obtained through

wired and wireless communication networks.

Current Status of Domestic Location-based Service Market

The LBS is growing together with the smartphone market, which has been growing

rapidly since 2010. As of 2018, there are 208 personal location service providers, 3

IoT service providers, 1,223 LBS providers, and 12 small business owners and the

number of permit and reporting companies is on increase every year.


As various services that utilize personal location information increase with the

development of ICT technologies such as IoT and cloud computing, the Korea

The LBS that provides a variety of services based on location information obtained through

wired and wireless communication networks are offered in various ways. The LBS can be

divided into location information business and LBS business and largely into outdoor and

indoor services. The indoor location determination service market is still at the early stage.

Classification ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18

Personal Location Service Providers

26 33 44 51 71 83 96 114 132 155 180 193 208

IoT Service Providers - - - - - - - - - - - - 3

LBS Providers 74 91 101 126 174 373 506 626 738 848 978 1,085 1,223

Small BusinessOwners

- - - - - - - - - - - - 12

[Table. 1-2-2] Current Status of Permits and Reporting of Domestic LBS Providers(Unit: Companies)

[Korea Communications Commission, Current

Status of Business Owners Permitted and Reported,

2018 ]

※ Provisions on reporting of location-based information service businesses by IoT location

information business owners and small business owners newly enacted due to the

Amendment of the Location Information Act (Apr. 17, 2018)



Communications Commission prepared a (draft) partial amendment to the ACT

ON THE PROTECTION, USE ECT. OF LOCATION INFORMATION to strengthen

the protection of personal location information and rationalize regulations. The

amended ACT ON THE PROTECTION, USE, ETC. OF LOCATION INFORMATION

rationalize regulations on the entry to the location information market. It loosened

the existing permit system for the IoT location information business to the

reporting system and rationalized the unnecessary prior consent regulation by

stipulating that the location information of a thing could be processed without the

prior consent of the owner of the thing.

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Internet Contents

A. Use of Contents

B. Creator


A. Use of Contents

The Broadcasting·Video·Music·Game

According to the content industry statistics survey 2018 by the Ministry of Culture,

Sports and Tourism (MCST), the broadcasting, videos (movies, animations),

music, and game markets showed steady growth from 2013 to 2017. The sales in

2017 showed an overall increase compared to 2016. The game market showed

the highest growth rate of 20.6%, followed by music (9.3%), movies (4.5%) and

broadcasting (4.1%).

The sales volume of the animation industry decreased by 1.7% compared to

2017 due to the decrease in the sales of theaters and the reduced exports of

broadcasters (See Table 1). Looking at the current sales breakdown by industry,

it can be seen that the diversification of online platforms and services and the

widespread of online content usage culture are driving the overall growth of the

content industry.

The diversification of online platforms and services and the widespread of online

content usage culture are driving the growth of the contents industry and the

domestic e-learning industry is developing as the edutech industry that increases

educational effects through the convergence of information technology and

education from the transfer of knowledge through simple contents.

Classification 2013 2014 2015 2016 2017 Ratio (%)

Increase or Decrease Rate (%)

Compared to 2016

Average Annual

Increase or Decrease Rate (%)

Broadcasting 14,940,939 15,774,634 16,462,982 17,331,138 18,043,595 15.9 4.1 4.8

Movies 4,664,748 4,565,106 5,112,219 5,256,081 5,494,670 4.9 4.5 4.2

Animations 520,510 560,248 610,175 676,960 665,462 0.6 -1.7 6.3

Music 4,277,164 4,606,882 4,975,196 5,308,240 5,804,307 5.1 9.3 7.9

Game 9,719,683 9,970,621 10,722,284 10,894,508 13,142,272 11.6 20.6 7.8

[Table. 1-3-1] Current Status of Sales in Contents Industry by Year

[The Ministry of Culture, Sports and Tourism (MCST), Content Industry Statistics Survey 2018, 2019]

(Unit: KRW, 1 Million)



Knowledge Information (e-learning)

The domestic e-learning industry is continuously developing in scale due to

the development of the Internet and mobile environment, but it is not able to

maintain the high growth rate of the early e-learning industry due to the decline

in the domestic economic growth rates, the decrease of school age population, the

maturation of the e-learning industry. etc. However, new education markets, such

as continuing education and vocational education, are growing, and are evolving to

the edutech industry that enhances the educational effect through the convergence

of information technology and education from the transfer of knowledge through

simple video contents. In 2018, the e-learning supply market amounted to KRW

3.845 billion, and it is expected to reach KRW 4 trillion in 2019.

The domestic e-learning demand market size, which was estimated based on the

expenditure survey of domestic e-learning users in 2018, totaled KRW 3,777.2

billion, up by 4.1%p compared to 2017. When looking at consumers, individuals

accounted for KRW 1,784.8 billion and businesses accounted for KRW 1,535.4

billion, which amount to 87.9%. The private sector showed an increase of 7.0%p

compared to 2017. As the demand market of individuals grows, the usage rate of

personal e-learning is continuously growing to 58.2% in 2015, 58.7% in 2016, 58.9%

in 2017, and 59.0% in 2018.

[Table. 1-3-2] Demand Market Size for Knowledge Information (e-Learning)(Unit: KRW, Hundred Million; %)

[National IT Industry Promotion Agency, Survey of Korean e-Learning Industry in Korea 2018 (Reconstruction), 2019]

Classification2015 2016 2017 2018

Sales Ratio (%) Sales Ratio (%) Sales Ratio (%) Sales Ratio (%)

Individuals 15,778 46.1 15,816 46.1 16,682 46.0 17,848 47.3

Businesses 14,498 42.4 14,514 42.3 15,140 41.7 15,354 40.6

Government/Public Institutions

1,695 5.0 1,718 5.0 1,995 5.5 2,056 5.4

Regular Educational Institutions

2,227 6.5 2,239 6.5 2,482 6.8 2,514 6.7

Total 34,198 100.0 34,287 100.0 36,299 100.0 37,772 100.0

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B. Creators

Expansion of Video Platforms and Personal Engaging Contents

Today, as the interest in the videos-sharing platforms and their use rates have

increased, the space for numerous creators has begun to be expanded. In particular,

it was greatly influenced by YouTube, a video platform that has been popular

worldwide. According to 2019 Internet Use Survey by Nasmedia, the percentages

of domestic users who watch YouTube videos on fixed PCs and mobiles was 87.7%

and 89.4%, respectively, which were much higher than other platforms. According

to a survey conducted in May 2019 by an app analysis firm WISEAPP, the YouTube

usage time of Android smartphone users in Korea increased by 50% year-on-year

from 25.8 billion minutes in 2018 to 38.8 billion minutes in April 2019 and YouTube

was selected as the app used for the longest period of time in all age groups.

According to the figure below, 82.6% of the video service users used the one-

person broadcasting contents that one creator appears and broadcasts. The most

popular video platform using one-person broadcasting content appeared to be

YouTube. In particular, the one-person broadcasting content shows the highest

utilization rate among teenagers, and the younger generation is accustomed to

the one-person broadcasting content in which the creator participates, showing

that the use of such contents become common. The use of videos that present

specialized contents by individual participation rather than those produced by

existing broadcasting companies with large organizations becomes common.

There are more diverse contents produced by creators who plan and produce

contents as one-person media and they give greater influences. In particular, one-

person broadcasting contents are most highly used by teenagers. The personal,

engaging contents market where creators participate in planning, producing,

distributing and commercializing contents is expected to continuously grow.



Creators’ Activities

According to a survey of the members of Korea MCN Association, whose members

are creators by the Korea Labor Institute, it appeared that the period of working as

full-time creators was 2.8 years while the period of working as part-time creators

was 3.3 years, which was longer than the former. The most popular platform

for creators was YouTube and most of them did not belong to their companies.

In terms of the average monthly income of creators, it was found that full-time

creators earn an average of KRW 5.36 million and part-time creators earn an

average of KRW 3.33 million while creators for hobbies earn KRW 1.14 million.

Watching experience Watching experienceNo watching experience No watching experience

Teens

20s

30s

40s

Over 50

17.4

82.6

83.8 16.2

81.4 18.6

96.7 3.3

6.9

17.9

26.3

31.1

93.1

82.1

73.7

68.9

[Fig. 1-3-1] Experience of One-person Broadcasting Content Watched by Video Service Users

[Nasmedia, 2019 Internet Use Survey, 2019]

(N=1,906, Unit: %))

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Since 2011, domestic online advertising has emerged as the second largest

advertising medium following broadcasting. Among advertising media, it has been

the only continuous growing medium since 2014. In particular, online advertising

posted the highest ad revenues, surpassing the largest broadcast ad market in 2016.

The market accounts for 35.2% of the entire ad market. Unlike other media, which

are expected to slow down its growth after 2017, the online advertising market is

steadily growing by 6%, leading the entire advertising market.

Online advertising can be divided into Internet (PC) advertising and mobile

advertising. Since 2000, Internet advertising, which had grown at an average

annual rate of 28.3%, is steadily sluggish while the market has entered the mature

stage with the reduced sales by 12.1% in 2017. Meanwhile, mobile ads rapidly

growing with the expansion of distribution of smartphones recorded KRW 2.8

trillion in 2017, exceeding the Internet advertising size (with KRW 1.9 trillion).

It is expected to reach roughly KRW 4 trillion in 2019 (2018 Korea Advertising

Expenditure Research, KOBACO).

Considering Korea’s Internet usage rate (91.5%) and smartphone usage rate

(89.6%), the steady expansion of the online advertising market seems obvious

(2018 Internet Usage Survey, Ministry of Science and ICT). The video consumption

and active use of social media by all generations in addition to the lower costs

of advertising than traditional media are factors that advertisers choose online

advertising. Therefore, experts analyze that the concept of primetime that has

been applied to TV media and their advertisements in the past will be faded

Classification 2015 2016 2017 2018(e) 2019(e)

Broadcasting 4,463,966(6.7) 4,135,069(-7.4) 4,051,416(-2.0) 4,157,715(2.6) 4,201,027(1.0)

Printing 2,329,706(0.3) 2,319,341(-0.4) 2,310,264(-0.4) 2,267,150(-1.9) 2,312,884(2.0)

Online 3,427,814(12.4) 4,154,724(21.2) 4,775,137(14.9) 5,513,306(15.5) 6,060,045(9.9)

옥외 1,061,274(-9.5) 1,088,532(2.6) 1,305,948(-) 1,336,572(2.3) 1,363,960(2.0)

Other 507,873(16.7) 464,991(-8.4) 412,056(-11.4) 408,867(-0.8) 399,970(-2.2)

Total 11,790,634(5.6) 12,162,657(3.2) 12,854,822(5.7) 13,683,609(6.4) 14,337,886(4.8)

[Table. 1-3-3] Sales by Korean Advertising Type and Increase or Decrease Rate Compared to Previous Year (Unit: KRW, 1 Million, %)

[KOBACO, Korea Advertising Expenditure Research, 2018]※ e: Refers to the estimated value.



and personalized contents and customized advertisements in the era of videos

and OTT will be still more developing. As AI, big data, and LBS technologies are

advanced, the efforts of the advertising industry to develop online advertising that

can bring the attention instead of reducing user inconvenience will continue.

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2 Part 2.

Utilization


Utilization





1

Current Status ofInternet Usage


B. Business


Internet Usage Rate and Number of Users

According to 2018 Internet Usage Survey conducted by the Ministry of Science

and ICT (MSIT) and Korea Internet & Security Agency (KISA), the Internet usage

rate of the population aged 3 and over (the rate of people who used the Internet

more than once in a month) as of July 2018 was 91.5% up by 1.2%p compared to

2017 and the number of users was roughly 46,135,000 (up by 842,000 compared

to 2017), steadily increasing every year. The Internet usage rate of the elderly aged

60 and over was 65.4% and the number of internet users was 6,025,000 surpassing

60%-something for the first time, showing a steady increase.

The Internet usage rate as well as the number of users is steadily increasing every year.

The Internet usage rate of men is higher than that of women, and the Internet usage

rate of the elderly is increasing. More wireless connection methods are used to connect

to the Internet. Most said that the purpose of using the Internet is ‘communication.’

Most users used the Internet ‘while moving’ by using smartphones or smart pads.

2-1-1-(1)

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

91.5

100

44.7

19,040

56.6

24,380

59.4

26,270

65.5

29,220

70.2

31,580

72.8

33,010

74.1

34,910

75.5

35,590

76.5

36,190

77.2

36,580

77.8

37,010

78.0

37,180

78.4

38,120

82.1

40,080

83.6

41,118

85.1

41,940

88.3

43,636

90.3

45,283 46,125

[Fig. 2-1-1] Internet Usage Rate and the number of Internet Users (Ages 3+)(Unit: %, Thousand persons)

* From the 2004 survey, wireless (mobile) Internet was included in the Internet and the definition of the Internet user was changed from ‘users who

use the Internet monthly average once or more’ to ‘users who have used the Internet in last one month’.

* From the 2006 survey, the subjects of the survey were expanded to the population aged 3 years or over (2000~2001: Population aged 7 years

or over, 2002~2005: Population aged 6 years or over)

[Korea internet & Security Agency, Internet Usage Survey 2018, 2019]



Internet Usage Behavior

To connect to the Internet, the wireless connection method (99.7%) appeared to

be more frequently used than the wired one (69.4%). Among the wireless Internet

connection methods, ‘using wireless Internet with mobile phones (including

smartphones) with 3G/LTE networks, etc.’ was the highest at 99.7%, followed by

‘using the wireless Internet within a specific range such as Wi-Fi’ (85.2%), and ‘using

the wireless Internet using portable wireless router’ (4.1%).

The purposes of using the Internet (within a year) were ‘communication’ at 94.8%,

which was the highest, followed by ‘acquisition of data and information’ (93.7%),

and ‘leisure activities’ (92.5%) in order. Besides, it appeared that people use the

Internet to ‘operate websites, etc.’ (59.0%), ‘educate or train’ (49.0%), ‘work or look

for jobs’(25.0%), etc.

Internet Usage Environment

Among all 19,752,000 households, there are 19,649,000 households that can

connect to the Internet up by roughly 222,000 households even though the

percentage (99.5% of all households) was same as in 2017.

[Fig. 2-1-2] Percentage and Number of Households with Internet Access (All households in Korea)

(Unit: %, Thousand Households)

[Korea internet & Security Agency, Internet Usage Survey 2018, 2019]

2_1_1_(9)

49.8

63.270.2 68.8

86.092.7 94.0 94.1 94.3 95.9 96.8 97.2 97.4 98.1 98.5 98.8 99.2 99.5 99.5

14,60916,128

15,028 15,454 15,719 16,224 16,610 16,899 17,47517,868 17,868 18,222

18,840 19,42719,649

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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B. Business


As of the end of December 2017, it was estimated that more than 3.18 million or

80.6% of all domestic businesses (3.95 million businesses) can access the Internet and

it was surveyed that the figure was up by 6.4% compared to the previous year (74.2%).

Current Status of Use of e-Commerce

It was surveyed that 26.0% (or 1.02 million) of the total businesses in 2017 (3.95

million businesses) had purchased, ordered, or sold products and services through

e-Commerce and the figure was up by 3.1%p compared to the previous year (22.9%).

IoT

It was surveyed that as of December 2017, 1.3% (or 49,000) of all the businesses

The Internet access rate of all businesses increased and WLAN was the highest as

the access method. Internet-based service utilization rate was also similar to, or

increased more than, before. The awareness of new Internet technologies such as

IoT, Cloud, and big data appeared to be lower compared to the previous year but the

usage rate was relatively high.

2015 2016 2017

Internet accessing companies

2,773,155(72.7%)

2,873,084(74.2%)

3,183,615(80.6%)

Companies not accessing the Internet

1,039,665(27.3%)

1,001,083(25.8%)

766,577(19.4%)

[Table. 2-1-1] Whether or Not to Access the Internet

[Ministry of Science and ICT & National Information Society Agency, Yearbooks of Information Society Statistics (2006-2018)]


(Unit: Companies)

[Table. 2-1-2] Whether or Not to Use e-Commerce(Unit: Companies)

2015 2016 2017

Companies that use e-commerce

777,352(20.4%)

888,357(22.9%)

1,027,243(26.0%)

Companies that do not use e-commerce

3,035,468(79.6%)

2,985,810(77.1%)

2,922,949(74.0%)



(more than 3.95 million) used IoT devices and services and this figure was down

(by 0.1%) compared to the previous year. In addition, the businesses that recognize

IoT devices and services (19.0%) appeared to be sharply reduced compared to the

previous year (10.4%).

Cloud

It was surveyed that as of December 2017, 5.8% (or 229,000) of all businesses (3.95

million) used cloud computing services, up compared to the previous year (2.5%).

Meanwhile, 22.4% appeared to know cloud computing services including the

businesses that used the services down by the previous year (30.1%).

Big Data

It was surveyed that as of December 2017, 1.7% (or 66,000) of all businesses (3.95

million) used the big data technology and service, up compared to the previous

year (0.9%). Meanwhile, 20.6% appeared to know the big data technology and

service down by the previous year (26.6%).



[Table. 2-1-3] Whether or Not to Use IoT Devices and Services(Unit: Companies)

(Unit: Companies)

2015 2016 2017

Companies that use20,214(0.5%)

54,078(1.4%)

49,770(1.3%)

Companies that do not use

3,792,606(99.5%)

3,820,089(98.6%)

3,900,422(98.7%)

[Table. 2-1-4] Whether or Not to Use Cloud Computing Services

2015 2016 2017


128,598(3.3%)

229,322(5.8%)


3,656,628(95.9%)

3,745,569(96.7%)

3,720,870(94.2%)

[Table. 2-1-5] Whether or Not to Use Big Data Tech and Services

2015 2016 2017


33,453(0.9%)

66,727(1.7%)


3,784,054(99.2%)

3,840,167(99.1%)

3,883,465(98.3%)


(Unit: Companies)

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Internet Use Culture




1) Rearing of software talent pool

Outlook for Demand and Supply of Software Talent Pool

The Ministry of Science and ICT (MSIT) analyzes the supply and demand

conditions and outlook of ICT/SW experts in Korea every year with the Korea

Research Institute for Vocational Education & Training (KRIVET) to efficiently

rear and utilize excellent ICT and SW human resources, providing the analysis

through the website of the Ministry of Science and ICT and the Korean Statistical

Information Service (KOSIS) of Statistics Korea.

According to the analysis and outlook of 2018 ICT and SW experts by the Korea

Research Institute for Vocational Education & Training (KRIVET) in February

2019, polytech-level SW experts will be oversupplyed by 2022 but the shortage

of university and graduate school-level experts is expected. Recently, as the

demand for core researchers in the SW field is increasing rapidly in center on the

industries embracing the 4th industrial revolution, the shortage of 7,590 university-

level researchers and 22,540 graduate school-level researchers is expected. Such

shortage of manpower is not limited to the specific software-related jobs but also

occurs in the fields of SW/SI development, digital contents, information system

operation and management and other overall software. In particular, the shortage

of more than 30,000 human forces is expected in the core technology fields of

the 4th industrial revolution, such as AI, Cloud, Big Data, and AR/VR. To this,

the government is seeking to develop strategic software manpower policies such

as developing a demand-linked curriculum for the next generation of human

resources for the 4th industrial revolution and reforming graduate curriculums

based on corporate cooperation.

SW Manpower Resources Rearing Policy

To this end, the government selects software-focused universities and support

the expansion of students who intend to major in software, the curriculum

Due to the anticipated change in the labor market environment due to the 4th

industrial revolution, the demand for core researchers as driving force in the

software field is rapidly increasing and new jobs combined with new technologies

appear. Informatization education for the underprivileged is very important as one of

the policies to resolve inequality.



reform, and the recruitment of new teachers to expand SW education. For this, it

conducts projects such as a ‘ICT mentoring project’ under which college students

(mentees) can perform projects in a team with software experts (mentors) and

‘software maestro project’ which nurtures the best software experts that will lead

the software industry through the apprenticeship and mentoring project with best

experts and professionals.

In addition, the government conducts a project titled ‘Innovation Growth, Young

Talent, and Intensive Training’ that nurtures working-level human resources in top

8 leading fields embracing the 4th industrial revolution including AI and Cloud

and provides jobs to them based on working-level projects-centered software

education. Besides, it carries out the project of supporting the AI graduate schools

for the goal of finding 10 graduate schools by 2022 to train AI-centered core

researchers.

2) Vulnerable Class Informatization Education

The Ministry of Science and ICT (MSIT) is pursuing an inequality-resolving policy

with the goal of “implementing a community of human-oriented intelligent

information that everyone can enjoy together.” It is an expression of the will to

prevent the current vulnerable situation from leading to digital inequality, which

in turn would lead to alienation in the new community. Informatization education

for the vulnerable is one of the policies to resolve inequality. For example, the

government has designated the disabled, the elderly, multicultural families, and

farmers and fishermen as vulnerable digital groups to provide education for

improving informatization capabilities. This project is based on Article 35 of

the FRAMEWORK AC ON NATIONAL INORMATIZAION. In 2018, the Ministry

of Science and ICT (MSIT) and the National Information Society Agency (NIA)

developed real-life-oriented educational contents that reflect demand, and carried

out the business in accordance with the policy of operating education courses by

level.

Classification AI Cloud Big Data AR/VR

Total -9,986 -335 -2,785 -18,727

Advanced -7,268 -1,578 -3,237 -7,097

Intermediate -2,048 648 390 -8,654

Beginner -671 595 62 -2,977

[Table. 2-2-1] Outlook for Demand and Supply of Software Talent Pool for 4th Industrial Revolution (2018-2022)

[Software Policy & Research Institute, Labor Market Forecast of Promising Software Areas 2018]

(Unit: Persons)

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Looking at the progress of education by class, the National Information Society

Agency (NIA) conducts informatization education in cooperation with 17

metropolitan governments across the country and provides one-on-one visiting

education for the severely disabled who cannot move easily. For the elderly, it

selected educational institutions for 17 regional metropolitan governments to

provide education, which trained a total of 20,026 people in 2018. From 2000,

approximately 640,000 elderly people were trained. For multicultural families,

it trains marriage immigrants with IT abilities as visiting supervisors, and makes

them visit and educate multicultural families. In order to educate farmers and

fishermen, it dispatches instructors to rented apartments and post offices located

in the units of eup or myeon, to provide training on how to use the Internet and

smartphones.




1) Prevention of Overdependence on Smartphones and the Internet

The Ministry of Science and ICT (MSIT) and the National Information Society

Agency (NIA) are studying the problematic use of the Internet and smartphones

every year from 2004 to serve as the basic documents for policy making.

According to the survey of 2018, 19.1% of the smartphone users in Korea appeared

to be an overdependence-risk group (high risk group + potential risk group). If it is

converted to a population, the number becomes about 8.3 million and the risk of

overdependence increases every year as smartphones become more common.

Looking at overdependence-risk group by age, adolescents took the largest

proportion at 29.3% and infants and children and the elderly in the 60s and above

took 20.7%, and 14.2%, respectively. In all groups, the risk appeared to continuously

increase. Experts point out that overdependence in infants and children has a more

significant meaning than the other age groups in terms of emotional anxiety, etc.

The rate of overdependence on smartphones is on increase and the government is trying

to prevent and solve this problem. The Internet and smartphones have been positioned

as communication tools and core means of living between people but since side effects

are also caused by the lack of awareness of the correct usage culture, efforts are required

to be made to expand educational programs to promote a clean usage culture.

2_2_2_1_(1)

2014 2015 2016 2017 2018

14.2

12.2

2.0

16.2

13.8

2.4

17.8

2.5

15.3

18.6

2.7

15.9

0.5%p

19.1

2.7

16.4

By Year

Children

High Risk

Potential Risk

Youth Adults 60s

20.7

2.0

18.7

29.3

3.6

25.7

18.1

2.7

15.4

14.2

2.4

11.8

By Target

[Fig. 2-2-1] Current Status of Overdependence-risk Group by Year and Target

[Ministry of Science and ICT & National Information Society Agency, Survey of Overdependence on Smartphones 2018, 2019]

(Unit : %)

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In 2018, the World Health Organization (WHO) newly recognized the “gaming

disorder” as a “behavioral addiction” in the 11th Revision of International

Classification of Diseases (ICD-11).” On this issue, the medical circle and the game

industry in Korea were fiercely conflicted. How to watch a smartphone game may

be an issue in the future. Another major issue in overdependence on smartphones

is that the number of infants and children and the elderly in the 60s and above

who show overdependence is continuously increasing. The government plans to

enforce a policy by tying them as a new overdependence-risk group.

2) Internet Ethics Culture

According to the result of “2018 Cyber Violence Survey” conducted by the Korea

Communications Commission (KCC) and the National Information Society Agency

(NIA), the rate of adolescents who have experienced assaults and damages using

cyber violence at least once increased by 4.7%p compared to the previous year

and adults showed sharp increase by 13.3%p. This implies the need to expand the

Internet ethics education and campaigns not only to teenagers but also to adults.

In addition, as the environment for anyone to produce videos has been created,

“creator” appeared as a promising job for elementary school students and the

cases of success in personal broadcasting were increased. While an average of 400

hours of videos are uploaded every minute (Source: Korea Information Society

Development Institute, 2018) and specialized content fit for individuals’ inclinations

and interests, there were also side effects, including an increase in the distribution

of violence and sexual contents.

To this, the Korea Communications Commission (KCC) and the National

Information Society Agency (NIA) are promoting customized internet ethics

education for infants, young people, adults, parents, and vulnerable groups. They

developed and disseminated education programs to prevent new dysfunctions

such as information discrimination, content discrimination, and the necessity of

producing proper personal broadcasting in the fragmentary education of cyber

violence prevention. In addition, “Beautiful Internet World” and “Korea Internet

Stars” were branded for the Internet ethics and these increased the Internet ethics

among the people and improved affinity.

3) Response to distribute unhealthy information

In accordance with Article 21 of the Act on the Installation and Operation of the



KBC and Article 8 of the Enforcement Decree thereof, the KBC may review, and

request for correcting, ‘illegal information’ and ‘information deemed necessary

to review information harmful to young people (harmful information),’ (deleting

the information, blocking access to the website, etc.) (to delete such information

or block the access to websites) in accordance with Article 44-7 of the 『Act

on Promotion of Information and Communications Network Utilization and

Information, Etc.』 as matters necessary to develop clean communication ethics in

the information on the Internet. In case of illegal information, the KBC may order

to refuse handling the information against such information handlers failing to

follow the corrective request of the KBC. In February 2019, the KBC announced

that it introduced the SNI field filtering method to strengthen blocking the access

to overseas websites which use HTTPS access.

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C. Improvement and Promotion of Regulations on Internet


1) Web Compatibility

Web compatibility is called compatibility by considering functional differences in

browser types and versions upon building websites. According to the 2018 browser

market share in Korea released by a global traffic analysis firm Stat Counter,

Chrome had 59.8%, and IE had 30.4%. Compared to the overseas statistics, Korea

still use IE more. As such, the relatively high share of IE in Korea increased the use

of plug-ins such as ActiveX, a non-standard web technology only owned by IE.

As a result of the survey of the usage of ActiveX, a non-standard web technology

for 500 domestic websites, conducted in 2018 by KISA, a total of 510 websites still

had ActiveX. This is down by about 37% or down by 300, compared with 810 in

2017. However, due to the high usage rates in electronic payment, graphic charts,

and video playback functions, it is necessary for domestic website operators to

make efforts to continuously improve the situations.

As the open Internet ecosystem service out of platforms including specific

operating systems becomes gradually common, users have more choices and the

efforts to secure web compatibility such as multi-browser support to ensure the use

of various browsers and devices become more important. On condition that web

compatibility is an essential element of the web service, it is necessary to improve

the convenience and service level of domestic Internet services by creating a

climate to change the web standards for domestic web sites.

The Internet must be open to everyone equally in order to keep up with continuously

appearing new services and to enhance user convenience. Ensuring information

access or digital gaps represented by web accessibility, mobile accessibility, and kiosk

accessibility should be recognized as a matter of ensuring basic human rights.

Classification ChromeInternet Explorer

Microsoft Edge

Safari Firefox Opera

Korea 59.8 30.4 3.1 2.4 1.6 0.7

Worldwide 68.0 6.6 4.2 5.4 11.0 2.4

[Table. 2-3-1] 2018 Browser Market Share in Korea and Foreign Countries

[StatCounter, gs.statcounter.com]

(Unit: %)



http

2) Internet Openness

The openness of the Internet refers to an environment where users can use the

Internet at any time and at any place. As the convergence of broadcasting and

information communication is accelerated based on the Internet environment,

and new Internet services are continuously spreading, the internet network is

recognized as a necessity in modern society.

In Korea, when releasing the “Guidelines on Network Neutrality and Internet

Traffic Management” in April 2018, the MSIT unveils the policy to keep the

network neutrality even in the new Internet environment. The guidelines set forth

that “Internet users have the right to freely use devices or equipment that are not

harmful to legitimate contents, applications, services and networks and receive

information on Internet traffic management from relevant business operators”

and Internet access providers have the obligations to manage transparent Internet

traffic, prevent the blockage of legitimate contents, and prevent unreasonable

discrimination.

However, if it is necessary to secure the security and stability of the network,

and to protect the interests of multiple users from network congestion due to

temporary overload, reasonable traffic management is allowed. For the reason

that new services continuously appear and in order to improve user convenience,

the Internet network must be open fairly to everyone. However, if the costs of

developing, maintaining and repairing technologies to upgrade the Internet are

made to be borne only by network operators, this may cause a tragedy of the

commons. In the future, policy discussions on the openness of the Internet seem

to be held with the concerns about creating a sustainable media ecosystem from

the aspect of the fair use fit for the era of the 4th industrial revolution.

3) Web Accessibility

As the World Wide Web Consortium (W3C) recently enacted and promulgated

the “Web Content Accessibility Guidelines (WCAG) 2.1” (on June 05, 2018), the

government discusses the directions of the revision of the current Korean Web

Content Accessibility Guidelines 2.1 (on March 31, 2015) and the revisions of

national standards related to web accessibility, including the current national

mobile accessibility standards.

Meanwhile, the government has operated the policies by limiting information

accessibility in law to web accessibility but is expanding the scope to mobiles,

kiosks, and IoT. To reflect the trends, the government is continuously enacting or

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amending or revising relevant laws, regulations, enforcement decrees, enforcement

rules, standards, guidelines, etc. In addition, the government conducts status

surveys on the accessibility to kiosks in the field of transportation for information-

vulnerable groups such as the disabled and the elderly and arranges the checklist

of kiosk accessibility based on the national standards. It surveyed the status of

compliance of installation and accessibility of kiosks in the field of transportation

including airports, railway stations, subway stations, etc. (from Oct. 15, 2018 to Dec.

31, 2018) and also set the Guidelines for Public Access Terminal Accessibility (KS X

9211, enacted on Jul. 25, 2016).

In addition, as of 2019, the government amended and revised the notification

on designation of web accessibility quality certification institutions and quality

certification, etc. and the notification on improvement of information access and

convenience of use by the disabled, the elderly, etc. and it is conducting the study

to set up a guideline on the systematic promotion of the information accessibility

improving projects including survey on web accessibility, quality certification

institution management, etc.




1) Information Protectionand Personal Data Protection

a. Personal Information Protection Act

The amendment of 2017 (Regulation No. 14765) caused a personal information

manager to clearly indicate important matters as set forth under the Presidential

Ordinance including purposes of collection and use, items of personal information

to be collected and used, etc. to make the subject of information capable of

easily notifying when the subject of information gets a consent in writing, etc.

in accordance with a method as set forth by the Ordinance of the Ministry of

Government Administration and Home Affairs.

b. Information and Communications Network Act

The amendment on September 18, 2018 (Enforced on Mar. 19, 2019; Regulation No.

15751) sets forth that a person who meets certain specifications among information

and communication service providers who do not have any address or business

office in Korea shall designate an agent in Korea and the domestic agent shall

perform tasks including the tasks as a privacy manager, notification, and reporting

of leakage of personal information, etc. and explanation on reasons for delay,

submission of data required to investigate, etc. Besides, it stipulates that if personal

information that has been already transferred overseas is transferred again, consent

shall be received in principle in the same way as transfer to foreign countries and

introduced the reciprocal provision to reasonably and elastically respond to the

level because the personal information protection level is different by country.

c. Location Information Act

The amendment on December 24, 2018 (Enforced on Jun. 25, 2019; Regulation

No. 16087) prescribes that if a location information operator, etc. gets consent of

collection and use of personal location information from a child aged under 14,

it shall be made sure that the legal representative has actually consented and a

To respond to the demands for use of personal information fit for the 4th industrial

revolution and be harmonized with international rules including the General Data

Protection Regulation (GDPR) of the EU, the amendment to the Personal Information

Protection Act is required. The discussion on the protection of Internet users in the

changed environment is also necessary.

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location information operator, etc. shall give notice on the matters related to the

handling of the location information to a subject of personal location information

subject in a form easily understood and in a language clear and easy to understand.

2) Protection of users

a. Information and Communications Network Act

The amendment on December 24, 2018 (Enforced on Jun. 25, 2019; Regulation

No. 16021) specifies that an information and communication service providing

organization shall set and enforce the guidelines on self-regulation of information

harmful to adolescents and illegal information under Article 44-7 of the 『Act on

the Information and Communications Network』 and allow the government to

support them.

In addition, it stipulates that the head of the investigating agency may request the

KCSC to review illegal photographs and videos in accordance with Article 14 of

the 『Act on Special Cases Concerning the Punishment, Etc. of Sexual Crimes』 and

imposed the obligations on an information and communication service provider to

make efforts not to provide inappropriate information if the provider provides an

interactive information communication service to a child under the age of 14.

b. Telecommunications Business Act

The amendment on December 24, 2018 (Enforced on Jan. 1, 2021; Regulation

No. 16019) imposed an obligation to prevent distribution of illegal photographs

and videos on value-added telecommunications service providers and made the

ground that the Minister of Science and ICT may conduct a survey to identify

the current status of value-added telecommunications service providers. In

November 2018, the telecommunication problems caused by fire at KT Ahyeon

Branch caused damages to numerous users. Accordingly, it clearly stipulated that

if there occurs any telecommunication problem, electronic communication service

providers shall compensate damage and also specified the plan for protection of

users including making it mandatory to notify users of the criteria and procedures,

etc. for damages upon any communication failure. In addition, it stipulated the

Extraterritorial Application to make the current laws applied to even an act

committed in a foreign country which gives impacts over the Korean market or

users.



C. Improvement and Promotion of Regulations on Internet

Overview

The ICT Regulatory Sandbox as an experimental ground for innovation is a system

of exempting or suspending existing regulations for a certain period of time

unless technologies and services such as new information and communication

convergence interfere with the lives and safety of the people. Derived from the

word sands where children can play freely, it attempts to release new technologies

and services to the fullest and test innovation and stability to determine whether

the current regulations are appropriate or not. It consists of regulatory exceptions

for expedited processing, temporary permits, and demonstration (hereinafter

referred to as “demonstrative exceptional cases”). Under the 『ICT Convergence

Act』, temporary permits and demonstrative exceptional cases are exempted from

the regulations within two years. Besides, it is possible to extend the validity period

within two years to commercialize for up to four years.

Procedures

The government supports companies on a regular and customized basis for

all procedures from application to review and then to demonstration. At the

application stage, companies who are new to the system will be able to complete

an application form, consult the system in general, review documents, etc. At the

review stage, a prior review committee will be held to closely review the bill in

advance and finally introduce the bill to the deliberation committee. Through the

review and decision, the bill will be designated as a regulatory sandbox task. At the

demonstration stage, the government supports liability insurance premiums and

demonstration project costs and continuously manages and supervises jointly with

related departments.

The ICT Regulatory Sandbox System has been successfully settled down to make

systems and laws follow the change of the new technology services, which are rapidly

coming to fruit. It is expected that this will play a role in giving some companies which

have never get any business chance opportunities to do so in the field of ICT.

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Performance

Korea’s ICT Regulatory Sandbox system has been successfully settled down and

it is performing the result which was implemented first. As an early stage of the

implementation of the system, the government is making efforts to supplement

many points by collecting opinions from companies and experts. It supports

applicant companies to easily fill out the application form, and simplifies the

process for the same or similar cases. Furthermore, obviously unreasonable

regulations against new industries and new technologies can go through “the

meetings of the regulations-related relevant deputy ministers” without going

through the regulatory sandbox procedure. The government is actively pursuing

the ICT Regulatory Sandbox system to serve as a base for economic growth as an

experimental ground for innovation. According to the MSIT, since the enforcement

of the ICT Regulatory Sandbox system (Jan. 17, 2019), as a result of the operation

of the system in 2019 as the first year, the deliberation committee was held seven

times, and among a total of 113 projects received, 95 were processed (November

27, 2019).

Application for Regulatory Exceptions

Applicant↓

Minister of Science and ICT

Head of Relevant Organization

+New Tech & Service Review

Committee↓

Minister of Science and ICT

Review and Decision for Granting Exceptions

Ministry of Science and ICT+

Relevant Organization(Joint Management &

Supervision))

Demonstration(2 years or less)

Head of Relevant Organization

(Including Minister of Science and ICT)

Arrangement of Laws and Regulations

If necessary

[Fig. 2-3-1] ICT Regulatory Sandbox Procedures

[Ministry of Science and ICT, Enforcement of the ICT Regulatory Sandbox System on Jan. 17, 2019]



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4

Intelligent e-Government

A. e-Government


A. e-Government

1) National Services

“e-Government” broadly means a knowledge and information society-oriented

government that provides high quality of administrative services to the people,

customers of the government by innovating all processes of administrative

activities with the use of information and communication technology and more

specifically, it means the complete computation of paper works including all

applications, reports, etc. to the government and administrative procedures or

handling through the Internet.

The e-Government provides customized public services to guide, apply, issue, and

view civil complaints closely related to life without visiting administrative agencies.

Besides, it provides services for improving the convenience of civil petitioners, such

as operating the Public Information Sharing Center for Administrative Information

so that the complaint handling personnel can check necessary documents directly

for filing for complaints. In addition, it provides various services related to the life

of the people such as taxation, education, employment and welfare.

Information technology is used in various fields to provide administrative services

that meet the needs of the public, including Internet complaints, public participation,

provision of safety information, and support of welfare services and the government

is recently declaring “the vision of the intelligent government that is digitally united

with the people,” focusing on innovating the services for the people with intelligent

information technology.

A. Customized Service for Living

•Integrated administrative services provided (‘GOV.KR’)

- Online civil complaints-handling services (Minwon 24), government services and policy materials

•Participation of the nation and damage relief: e-People, Happy Dream

B. Implementation of Safe Society

Based on Real-time Response and

Prevention

•Safety information provided (Korea Safety Map)

•Life environment safety information system (Choroknuri)

C. Welfare Society Created Together

• Next-generation administrative immigration system to support foreigners

(HiKorea)

•Korea’s representative portal for welfare (Bokjiro)

D. Other Services

• Comprehensive information system for education, field and administration

(NEIS)

•Taxation-related services (Hometax)

[Table. 2-4-1] Main Services to the Nation



2) Enterprise Target Services

Since the enactment of the e-Government Act in 2001, the government has been

striving to realize the 21st century’s knowledge information society-oriented

e-Government that provides the high quality of the people-centered services

through administrative services using information technology.

Government to Business (G2B) in e-Government means the products or services

that the government provides in a type of direct commerce to companies by

making the government save time and costs using information technology

including high-speed information communication-based technology to create new

added values through the focus on its own business. Furthermore, Government

for Business (G4B) means a service at the national level that helps administrative

procedures related to corporate activities including corporate establishment,

support of policy funds, etc. to reduce its administrative burden.

Services Website Service Details

Government for Business

G4B(www.g4b.go.kr)

•Administrative portal service to handle all civil complaints and services regarding corporate support including corporate complaints and ad-ministration with the governmental bodies over the whole course of the business cycle, batch update of business, difficulties of companies, funds-supporting information, testing, and authentication

National Logistics and Trade

Information Services

National Logistics Information Center

(www.nlic.go.kr)

•Users-centered logistics information services by integrating inland, marine, and air cargo information individually scattered

Air Cargo Information System(AIRCIS)

•One-site and one-stop services that support logistics-related service handling functions between, and private VANs and provides air cargo information services to, airlines, terminal operators, forwarders, carri-ers, shippers, warehouse companies, civil VAN service providers, and other air cargo-related operators.

PORT-MIS(new.prtmis.go.kr)

•Integrated smart port logistics services that provide comprehensive information on shipping ports and logistics, such as complaints on shipping ports, use of information on port operation, and monitoring vessels or dangerous containers, and support common use of infor-mation and collaboration and cooperation between subjects related to marine cargo

uTradeHub(www.utradehub.or.kr)

•e-trade services that can handle the entire trading services from mar-keting to interpreting, logistics, customs clearance, and payment in foreign currencies.

UNI-PASS(unipass.customs.go.kr)

•Single e-customs clearance service through the Internet-based import and export customs declaration system that supports customs decla-ration, approval, payment of customs duties, refund, and requirements check

Information Service

Regarding Policies for Mid and Small-sized

Companies

Bizinfo(www.bizinfo.go.kr)

•Comprehensive information for small and medium-sized businesses such as small business support projects, education, seminars, exhibi-tion information, policy news, expert counseling, etc.

National Comprehensive e-Procurement

Service

Korea On-Line E-Procurement System

(www.g2b.go.kr)

•Korea’s single electronic procurement service that can process and check the entire government procurement processes from bidding to contracting, inspection, and payment on the Internet

Patent Information

Service

KIPORO(www.patent.go.kr)

•A service that can process all matters related to patents, such as ap-plying for patent applications online and viewing progress information

[Table. 2-4-2] Examples of Internet Services for Companies in Public Sector

[Reorganized websites for corporate services by governmental body, 2019]

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The Korean e-Government built and operated more than 16,000 information

systems as of 2018 through eleven e-Government projects and top 31 roadmap

projects in the early 2000s and the governmental bodies and the public

organizations are now providing major administrative and public services online.

Through this, it has been recognized worldwide for its excellence, including being

ranked first in the evaluation of the UN’s e-Government in 2010, 2012, and 2014

for three consecutive years and winning the UN Public Service Award 13 times.

Despite global changes such as the AI cloud-centered 4th Industrial Revolution

and digital transformation, the Korean e-Government, however, expressed limits

including insufficient information linkage and utilization between agencies, and

services disconnected by departments by focusing on quantitative increase through

making offline paper documents-based tasks informatized and serviced online. To

this, the government established and announced pan-governmental level of “Digital

Government Innovation Plan” to promote digital innovation and support itself

as an innovative engagement country in our individual sectors from society and

economy by pushing for the bold digital transformation of the government itself

under the judgment that new digital-based government innovation is necessary

at a fundamental point of view to take our e-Government to the next level (on

October 29, 2019).



Top 6 Challenges Detailed Tasks

To innovate proactive and integrated

public services

“From application-based services to

visiting services”

1-1. Customized information for convenience services to the public

1-2. Reinforcement of one-stop packages of life cycle

1-3. Proactive service to remove blind spots

1-4. Promotion of public services-innovating projects beyond existing

limits

1-5. Establishment and application of digital service standards

To activate my data in public sector

“No more paper certificates”

2-1. Use of personal information for civil affairs

2-2. Issue and distribution of electronic certificates through smartphones

(e-wallets)

2-3. Service for downloading self-information in the public sector

2-4. Introduction of mobile identification cards

2-5. Activation of digital notices and receipts

To make a platform for citizens’

participation advanced

“Care the voices of the people”

3-1. Improvement of the system of listening to and analyzing the

people's voices

3-2. Challenge for solving problems in citizens’ participation and

operating Korea’s platform

3-3. Support for digitally vulnerable people

To implement a smart work

environment that supports field-

oriented collaboration

“Remove two PCs for one public

officer.”

4-1. Step-by-step transformation to a smart work environment

4-2. Activation of mobile administration

To use and activate cloud and digital

services

“From service development to

service use”

5-1. Sharply increased scope of using private cloud

5-2. Establishment of an open e-government cloud platform

5-3. Activation of digital services-specialized contracts

To implement ecosystem for open

data and services

“Innovate with private sector”

6-1. Strengthened foundation for linkage and utilization of data across

governmental bodies

6-2. Opening and expansion of valuable public data to the people

6-3. Opening and promotion of public services through open API

[Reorganized press releases by Ministry of the Interior and Safety, 2019]

[Table. 2-4-3] Digital Government Transformation Plan

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3 Part 3.

Infrastructure


Infrastructure




1

Internet Infrastructure






Overview

Today, the Internet is used as a medium for distributing a wide variety of

information and connecting various users. In order to access contents and users

through the Internet, direct and indirect connections are required to be made

between ISPs that provide Internet access services. As the percentage of population

using the Internet has increased, many ISPs have been created. Large numbers of

ISPs can increase investment costs and traffic volume due to the disbursement of

excessive costs of lines and a large number of access lines. Accordingly, IX has

emerged to effectively connect and access lines.

IX is an Internet linkage service to smoothly communicate traffic volume between

ISPs and for the purpose of interconnections between ISPs, each provider, such as

an ISP, pulls the circuits together in the main IX NOC (Network Operations Center)

to provide efficient connection paths between ISPs while reducing costs of lines

through common linkage.

Domestic Situation

As the domestic Internet became active, Internet traffic started to increase rapidly.

To effectively use the traffic and prevent unnecessary passing of international

traffic, IX started to be implemented in 1995.

Currently operating IXs in Korea include KTIX (KT, www.kornet.net), DIX (LG

U+, www.uplus.co.kr), SKBIX (SK Broadband, www.skbroadband.com), and KINX

(www.kinx.net). Looking at the current status of the operation of domestic IXs,

KTIX is linked to a total of 15 ISPs and three IXs; DIX to roughly 18 ISPs and three

IXs; and SKBIX to 24 ISPs and two IXs; and KINX to two IXs and 70 ISPs.

Domestic Internet commercial services are operated under 96 English service

Backbone Networks mean the top-level networks to which all networks are attached.

Internet eXchange (IX) has emerged to effectively use the Internet traffic and

prevent unnecessary passing of international traffic. The Internet commercial services

are operated under 96 English service names and they provide services such as

connection to leased lines and high-speed Internet to Internet users and individuals

by being assigned IP addresses from the KISA.



names, such as Kornet (KT), BoraNet (LG U +), and B-Net (SK Broadband) and

they provide services such as exclusive lines, access to high-speed Internet, etc. to

Internet-using organizations and individuals by being assigned IP addresses from

the KISA.

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1) Wired Networks

The wired subscriber networks use Optical Fiber, Coaxial Cable, Unshielded

Twisted Pair Cable, etc. as transmission media. Today's high-speed subscriber

networks are mostly built with fiber-optic cables to enable large transfers. High-

speed wired subscriber networks absorb a considerable portion of the demand for

telecommunications in the homes or enterprises. They absorb the Internet access

demand by connecting WiFi to the subscriber network and the demand for the

over-the-top (OTT) service is supported from the high-speed wired subscriber

networks.

Since a nationwide GIGA Internet access network service was commercialized

in 2014, the development of core technology equipment of the 10 GIGA Internet

service and the testing and verification of the service were completed in 2018 and

the commercial services (2.5 Gbps, 5 Gbps, and 10 Gbps) were commenced at the

end of 2018. As of August 2019, there are about 21.72 million high-speed Internet

subscribers, including x Digital Subscriber Line (xDSL), Local Area Network (LAN),

Hybrid Fiber Coax (HFC), Fiber To The Home (FTTH) and other methods, in

Korea.

2) Wireless Networks

Wireless Personal Area Network (WPAN)

A wireless network is a communication network that is provided with mobility

so that voice, video, and data can be exchanged regardless of place. The most

representative technology of the WPAN technologies that have the tens of meters

of coverage is Bluetooth. Bluetooth has become positioned as a technology

commonly used by many people as it is being installed in various kinds of devices

Wired subscriber networks mean the final-end information communication

infrastructure of the network and an optical cable is the highest transmission

efficiency and the excellent quality method upon the implementation of the Internet

wired subscriber networks. The wireless network is a mobile communication network.

The growth of wireless communication network services has been in line with the

growth of portable mobile devices.



such as audio equipment and health care products in addition to smartphones and

computer peripherals.

Wireless Local Area Network (WLAN)

In the area of the wireless local area network (WLAN) whose maximum coverage

is hundreds of meters, IEEE 802.11-family technology is most actively used.

The technical standard is led by IEEE, the standardization organization, but

Wi-Fi Alliance, an industry association, certifies the interoperability of devices

manufactured to that standard, giving trademark “Wi-Fi”. Therefore, Wi-Fi is

widely used among the public.

Wireless Wide Area Network (WWAN)

The area of the WWAN, which covers more than a few kilometers, is an area

of fierce competition among various subjects because commercial services are

most actively provided. In competition of technologies, mobile communication

technology announced by the 3rd Generation Partnership Project (3GPP), which is

a standardization organization, has taken control.

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1) Domestic Network

Starting the implementation and operation in 1988, the Korea Research

Environment Open NETwork (KREONET), as one of top 5 basic computer networks

in Korea, is now utilized by more than 100 advanced science and technology

research institutions as well as more than 200 research centers, universities,

governmental bodies, and associations of studies. The KREONET is implemented,

developed, and operated with the support of the MSIT by Korea Institute of Science

and Technology Information (KISTI). Major research achievements are from

the fields of basic and applied sciences, society, and culture such as astronomy,

meteorological climate, physics, bio, medical science, construction, and culture

along with ICT and future networking. The KREONET is positioned as the national

core infrastructure of science and technology for the era of the 4th industrial

revolution.

2) International Network

The Global Ring Network for Advanced Applications Development (GLORIAD)

was launched as a kind of the International Research Network Connections

(IRNC) of the National Science Foundation (NSF) of the U.S. in 2005. In Korea,

the Korea Institute of Science and Technology Information (KISTI) is responsible

for implementation, development, and operation with the support of the MSIT.

The GLORIAD is a global network infrastructure of more than 10 gigabytes that

annularly connects the world with advanced research networks in 15 countries,

including the United States, China, Russia, Canada, and the Netherlands as well

as Korea. It supports large-scale global collaborative researches that require

The Korea Research Environment Open NETwork (KREONET), which achieves over

the fields of basic and applied science, society, and culture, has been positioned

as Korea’s best and world-class research network. The Global Ring Network for

Advanced Applications Development (GLORIAD), which supports large-scale global

collaborative researches, made an environment where domestic researchers can

directly exchange with researchers in corresponding countries through direct

linkages with research networks at hotspots around the world.



transmission and processing of large-scale or real-time science-related big data

such as high energy physics, astronomy, bio, meteorological climate, energy of

nuclear fusion, and medical science.

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1) 5G Commercialization

The 5G service commercialized in 2019 as the core infrastructure of the 4th

industrial revolution is expected to create innovative convergence services in the

economic and social fields that had been impossible so far and new industries

in the field of manufacture including equipment, terminals, etc. which will make

that possible. In particular, it is more meaningful in that it provides opportunities

for the preoccupation of the global market, such as the leap in the terminal and

equipment industries, which are struggling to intensify global competition, and the

creation of new markets for convergence services and devices. The 5G network

services, which was commercialized in 2019, will trigger shared growth of front

and rear industries and create large-scale added values in the future market, fusing

all the industrial fields. Specifically, it is expected that the market worth KRW 1,161

trillion will be created in the main relevant industrial fields, including network

equipment and terminals, advanced devices, security, and converged services, by

2026.

The 5G network services, which was commercialized in 2019, will trigger shared

growth of front and rear industries and create large-scale added values in the

future market, fusing all the industrial fields. Korea is pursuing the future Internet in

cooperation with the industries, academia, research centers, and the government with

the intention of enhancing its status as an Internet powerhouse. The technologies of

SDN and NFV are successful cases with the future Internet research.

8.2

(Unit: KRW, Trillion)

117.3 181.5275.1

384.5

686.4

894.4

1.161

2019 2020 2021 2022 2023 2024 2025 2026

KRW 1,161Trillion(2026)

59.6%

28.4%

12.0%

Convergence Service

KRW 692 Trillion

Network EquipmentSmartphone

KRW 330 Trillion

Advanced Devices and Security

KRW 139 Trillion

3_1_4_1_(1)

Annual World Market Forecast (2019-2026) Global Market Outlook by Sector (2026)

[Fig. 3-1-1] Forecast for Global 5G Market

[5G+ Strategy by Relevant Departments, 2019]



Starting to make the roadmap of the 5G network service led by the government

in December 2017, Korea steadily prepared the early commercialization of the 5G

network service through the 5G spectrum auction in June 2018. In September 2018,

the certification of the 5G base station equipment was started. At the same time

when the 5G network launched on December 1, 2018 for the first time in the world,

the B2B services were launched by using the mobile routers made by Samsung

Electronics. After the first commercialization, Korea checked the changed schedule

of the commercialization of the 5G service by the U.S.-based firm Verizon in real

time and the government with the private sector actively responded. As a result,

three Korean carriers got their first 5G service subscribers at 23 o’clock on April 3,

2019, and this led Korea to get the title of the world’s first commercial 5G service

providing country. Now, Korean 5G network has been implemented based on the

3 GHz band and the network based on the 28 GHz band is expected to be actively

implemented from 2020.

2) Future Internet

Overview

As the applications of the Internet become wider, a lot of new Internet services

have emerged, and the amount of traffic flowing through the Internet is also

exploding exponentially. According to the report of Cisco Korea early in 2019, it

was expected that the annual IP traffic volume will reach 4.8 zetabytes and the

number of devices connected to IoT will amount to roughly 28.5 billion by 2022.

The average Internet traffic speed in 2022 is expected to increase the annual

average of 30% at 1 petabyte per second up by roughly 3 times compared to 2017.

In addition, as the ratio of the video traffic volume to the whole Internet traffic

volume is expected to be 82% by 2022, it can be found that various video services

such as YouTube recently give significant influence on the increase of internet

traffic volume.

As such, the Internet traffic volume is increasing exponentially due to the rapid

spread of the use of the Internet, the connection of numerous IoT devices, and the

expansion of videos-oriented services.

As the variety of quality improvement requirements for each type of Internet

service is constantly increasing, the gradual evolution of the existing Internet has

led to the recognition of “the limits of growth,” which are no longer able to keep

up with the rapidly growing variety of user requirements.

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Future Prospect

SDN and NFV technologies, which have recently brought about the improvement

of network performance and their evolution, are successfully applied examples

through the studies on the future Internet, to effectively use the network and

various resources by programing the network like software and virtualizing various

resources.

Future internet industry has placed its recent interest on various technologies

including: network slicing technology that allows more elaborate use of network

resources as softwares; diverse artificial intelligence technology focused on

machine-learning; various big data analytic technology yielded from networks; and

efforts to realize intelligent network based on cloud platform. Accordingly, related

research and development and standardization are being actively pursued. In

conclusion, the future internet is expected to evolve towards more intelligent and

advanced internet in the near future.



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2

Internet Address Resources


B. Domains


D. History and Trend of Conflicts of Addresses


Overview

According to the Internet Address Resources Act, ‘Internet address’ refers to an

information system composed of numbers, letters, codes and their combinations to

identify and access a specific information system under the International standards

or the certain communication protocol under the International standards on the

Internet. It includes Internet Protocol (IP) addresses made to be recognized by

computers and telecommunication facilities, domain names easily remembered by

persons, AS numbers granted to distinguish the Autonomous System, etc.

IP addresses include Internet Protocol version 4 (IPv4) addresses commonly used

on the Internet, and Internet Protocol version 6 (IPv6) addresses, called next-

generation Internet addresses. The IPv4 address has a size of 32 bits with the full

range from 0.0.0.0 through 255.255.255.255 and about 4.3 billion addresses are

available. The IPv6 address is an address system developed to solve IPv4 address

shortage and uses 128-bit addresses quadrupling the IPv4 address allowing for an

address space of 4.3 billion ×4.3 billion ×4.3 billion ×4.3 billion possible addresses.

AS numbers are the system for identifying numbers designed to distinguish a

unique network (autonomous system) built through the international standards on

the Internet and refer to unique numbers granted to the network operated with the

same routing policy, wherein the routing refers to the use of a particular path for

transmitting communication data information from a sender to a receiver based on

IP address information on the Internet network.

Current Status of Internet Addresses Retained

At the end of September 2019, more than 3,678.53 million IPv4 addresses were

allocated worldwide and 290,000 (/32) IPv6 addresses (290,000 x 2 96) and more

than 93,000 AS numbers have been allocated and used.

Internet Adresses refer to IP addresses and AS numbers. The IP addresses are IPv4

generally used on the Internet and IPv6 called next-generation Internet and the

rapid rise in IoT is expected to accelerate the introduction and expansion of IPv6. AS

numbers are the system for identifying numbers designed to distinguish a unique

network built through the international standards on the Internet.

2. Internet Address Resources


By country, the United States has the largest number of Internet IPv4 addresses

with 1,693.4 million addresses and the largest AS numbers with more than 27.000

numbers and China has the largest number of IPv6 addresses with 47,000 (/ 32)

addresses.

Even Korea has sought for securing IP addresses and AS numbers to provide stable

Internet services since the early 1990s. As of the end of September 2019, Korea

took the 6th place with 112,47 million IPv4 addresses and the 19th place with

5,258(/32) IPv6 addresses. Korea is ranked the 19th with 1,032 AS numbers.

Current Status of Migrating to IPv6 and Future Prospect

In order to lay the foundation for migrating to IPv6 addresses to cope with

the exhaustion of IPv4 addresses, the Korean government has established the

master plan for supplying and migrating to IPv6 addresses three times over the

past decade. In March 2014, Korea set up its vision of “Implementing the IPv6-

based Internet Powerhouse” by establishing an “IPv6 Deployment Roadmap (the

Roadmap) to boost the new Internet industry.” Besides, Korea proposed the goal of

completing the implementation of the IPv6 network of main ISPs up to 2017 and

launching the IPv6-based commercial services for the first time for the wired and

wireless Internet and websites from the second half of 2014. The ‘IPv6 Commercial

Service Supporting Council’ was operated to share the current status of the

development of the Roadmap with operators including small and medium ISPs,

CPs, and major carriers and discuss main issues.

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B. Domains

Current Policy Situation

Due to the increasing demand for the creation of new generic top-level domains

(gTLDs) internationally, the ICANN determined to additionally introduce new

generic top-level domains in addition to existing 23 gTLDs in June 2008. The

purpose is to meet the demand for the domains and give Internet users various

choices to select. In June 2011, the ICANN finally approved the new gTLD policy at

the meeting of ICANN in Singapore.

Future Prospect

In accordance with “the 5th Master Plan on the Development, Utilization and

Management of Internet Address Resources (2018 - 2020),” the MSIT approved

the amendment to the ‘Domain Name Management Framework’ to register two-

level number domains to utilize the top-level domains and expand the options of

users. The numbers that can be registered in the 2nd level number domain to be

introduced from April 2020 are from 0 to 9 and with the combination with the

hyphen (-), the registration from three to 63 letters is allowed.

However, in order to prevent personal information infringement and protect

privacy, it is not possible to register unique identification information such as

phone numbers, resident registration numbers, and passport numbers of others. In

addition, to minimize domain disputes, the numbers-trademark owners and “10Y”

numbering operators under the ‘Telecommunications Numbering Management By

laws’ will be temporarily given an opportunity to first register before the start of

registration. As such, it is expected that the brand values will be enhanced and the

country code domain market during the stagnant period will be activated because

individuals and companies can utilize their number trademarks, trade names, and

telephone numbers as the second-level number domain.

Domains are created according to the prescribed systems. The two top-level

domains for Korea are ‘.kr’ as the 1st domain and ‘.한국’ as the other domain, which

can be freely selected and used by users. In the three-level domain systems, the first

level domain is ‘.kr’ and the second level domain is freely selectable by nature or area

of an organization. The third level domain can be freely selected by a user.




Overview

In order to access a specific information system including various web sites on

the Internet, an identifier for identifying the information system to be accessed is

required. Internet Protocol address (IP address) is an Internet address information

system in a form of numbers to allow computers and telecommunication

equipment to identify and access such information system and Domain Name

is an Internet address information system in a form combining English, Korean,

numbers, and other letters to make people easily remember such information.

The Domain Name System (DNS) is a system configured to exchange domain

names and IP addresses that converts easily recognizable domain names to IP

addresses recognized by information systems such as servers.

Operation Principles

When an Internet user wants to connect to a domain name, the user’s computer

first enquires the IP address information associated with the domain name to

connect to ‘Recursive DNS’ and the Recursive DNS goes through the course

of enquiring sequentially according to the hierarchy of authoritative DNS from

root DNS to top-level domain DNS and then to user domain until finding the

information on the IP address for the domain name.

Domain Name System (DNS) is divided into ‘authoritative DNS’ and ‘ Recursive DNS'’

and the authoritative DNS can be classified into ‘root DNS,’ ‘top-level domain DNS’

such as krDNS as the essential based country code domain service, and ‘user domain

DNS’ to manage information on individual domain names. To take countermeasures

against forgery and falsification of DNS information, DNSSEC was enacted as an

international standard.

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Authoritative DNS

Recursive DNS

Web Serverwww.kisa.or.kr

Root DNS

krDNS

User Domain DNS

� Ask the IP address of www.kisa.or.kr

� Enter a domain name www.kisa.or.kr

� Ask the IP address of www.kisa.or.kr � Respond to the IP address14.49.46.68

� Access the IP address 14.49.46.68

� Respond to the address of krDNS.


� Respond to the DNS address of kisa.or.kr


� Respond to the IP address 14.49.46.68

[Fig. 3-2-1] Operation Principles of DNS

[Korea Internet & Security Agency]



D. History and Trend of Conflicts of Addresses

Dispute Resolution by Mediation Procedures

The domain name dispute resolution can be considered by dividing gTLDs such

as ‘.com’ and country code top-level domains ‘.kr’ and ‘.한국’. The rules applied

to resolve disputes in a form of mediating the dispute about gTLDs include the

‘Uniform Domain Name Resolution Policy (UDRP) (adopted in 1999)’ and the

‘Rules for UDRP’. The UDRP is the rule applied when a trademark owner with

the interests in a registered domain name selects one of the dispute resolution

organizations [currently six organizations, including the World Intellectual Property

Organization (WIPO)] and applies for dispute resolution.

The Internet address Dispute Resolution Committee is responsible for resolving

disputes regarding gTLDs in addition to top-level domains (.kr and .한국). Disputes

regarding gTLDs are resolved by six dispute resolution organizations approved by

the ICANN. The Internet address Dispute Resolution Committee, as Seoul Office

of the Asian Domain Name Dispute Resolution Centre (ADNDRC),’ one of six

organizations, provides the dispute resolution service from 2006.

New gTLDs and New Dispute Resolution Method

Since seven gTLDs including .com were used for the first time, seven more gTLDs

including .biz were added in 2000 and seven more including .travel have been

added since 2003. In June 2008, the ICANN Board adopted a policy to introduce

new gTLDs. Since April 2012, 1,234 gTLDs have been created through the work of

introducing the new gTLDs. In addition to the existing UDRP, disputes about new

gTLDs can be resolved with the Uniform Rapid Suspension System (URS).

Disputes may arise between trademark owners and those who have registered

domain names consisting of others’ trademarks. There are rules for resolving disputes

in gTLDs include the Uniform Domain Name Dispute Resolution Policy (UDRP) and

the Rules for UDRP. Regarding disputes about new gTLDs, there is the ‘Uniform Rapid

Suspension System (URS)’ that can protect trademark owners rapidly and powerfully

other than the UDRP.

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3

Internet Technology





Overview

Artificial Intelligence (AI) implements human intelligence, such as cognition and

learning, using ICT technology, and it is a national infrastructure of the nation

that is spread not only in telecommunication but also in all social fields such as

healthcare, finance, culture, and manufacturing. In the future, we expect that we

will be in an era of AI everywhere. In particular, AI technology is emerging as an

infrastructure technology that provides more intelligent services in connection

with the core and applied technologies of the 4th Industrial Revolution and the

efforts of standardization for expansion of AI technology, improvement of quality

and convenience of use, and application by major domains, etc. have recently been

actively pursued by major international standards organizations.

Trends for Standardization of AI Technologies

The International Telecommunications Union’s Telecommunication Standardization

Sector (ITU-T) first started to develop the standard development task to apply AI

technologies to the networks and applied communication services and the Joint

Technical Committee 1 (JTC1) jointly established by the International Organization

for Standardization (ISO) and the International Electronical Committee (IEC) as

two standard organizations installed the SC42 (AI) committee and started the

international standard development task for the basic concept and properties and

data of AI technologies.

Big data is being used as a new concept and technology for efficiently processing

large amounts of data compared to traditional data processing structures. In

particular, big data standardization is promoted by major international standard

organizations to efficiently process and use various large-capacity data generated

in all industries and it is pushed ahead typically by JTC1 and ITU-T.

The efforts of standardization to expand AI technology, increase quality and

convenience of use, and application by main domain started to be made actively by

ITU-T, JTC1/SC42, etc. In addition, the standardization of big data is actively attempted

and the standardization and IoT technology standardization are also being promoted to

enable efficient cloud computing services in the environment of multi-vendor solutions.



Trend for Standardization of Big Data Technology

JTC1 installed Big Data Study Group (SG) in 2013 to analyze the scope of big data

standardization, target technologies, and current status of related organizations.

Based on this, the development of main standards was conducted by installing

JTC1/WG9 (big data) groups, which had been absorbed in JTC1/SC42. Now, the

relevant international standardization task is carried out by JTC1/SC42/WG2 (big

data).

ITU-T is focusing on big data standardization in connection with cloud in center

of SG13 (future network) while the tasks of developing standards on the security of

the big data-based structure, and multimedia application services-related big data

are conducted by SG17 (Security) and SG16 (Multimedia), respectively.

Trend for Standardization of Cloud Computing

Cloud computing is a computing technology that utilizes Internet technology to

make various ICT resources available as highly elastic services. Standardization

is being pushed ahead by major international standard organizations to enable

efficient cloud computing services in multi-vendor solution environments and JTC1

and ITU-T are focusing on the public development of international standards.

Trend for Standardization of IoT

Internet of Things (IoT) refers to a technology that enables various physical

and virtual things to be connected through a network, and provides various,

useful, convenient and new services through communications and intelligence

between things. IoT technology standardization is being promoted by a number

of organizations of standardization by detailed types of technology domains

or services, and JTC1 and ITU-T are focusing on the public international

standardization task.

The standardization of IoT by JTC1 is initially conducted by the SC41 (IoT and

relevant technologies) committee through SWG5 (Special IoT Task Group) and

WG10 (IoT) Task Group. The ITU-T focuses on standardization for IoT technologies

and services in center of SG20 (IoT, smart cities) and SG11 (signaling method and

test specification) conducts standardization for edge computing and SG17 carries

out encryption techniques and security technologies in the IoT environment.

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Trend of Authentication Technology

The biometric authentication method is a technology for authenticating users by

using biometrics including fingerprints, face, and iris recognition. Biometrics refers

to the means of identifying individuals by extracting and storing humans’ physical

and behavioral characteristics. Physical characteristics refer to characteristics of

humans such as fingerprint, face, iris, and vein and behavioral characteristics

refer to characteristics acquired by habits or environmental factors such as voice,

signature, keyboard input, gait, etc. However, the identity can be verified based

on whether behavioral characteristics due to acquired human habits are identical

based on the same multiple data, but the behavioral characteristics have lower

accuracy than physical characteristics, so physical characteristics are mainly used

for biometric authentication.

Trend of Crypto-technique

The crypto-technique is a technique for safe storage and transmission and

reception of information in the cyber environment that forms the foundation

of the information security. Modern ciphers can be divided into symmetric-

key cryptography, public-key encryption, digital signatures, and hash functions

depending on encryption methods. In the past, the design was primarily designed

to consider safety (to guarantee confidentiality, integrity, etc.) of protected

information but recently service availability is considered at the same time.

In particular, as the scope is expanded to the Database Management System

(DBMS)-conforming format-preserving encryption for cloud and big data security,

homomorphic encryption possible to be computed in cryptograms, lightweight

encryption for security of the IoT environment, Post Quantum Cryptography

The crypto-technique is a technique for safe storage and transmission and reception

of information in the cyber environment that forms the foundation of the information

security. Most online services provide user ID-based services and resident registration

numbers were used as a method for verifying the identities to create and manage IDs.

In order to prevent the damage caused by leakage and theft, alternative means such

as i-PIN, mobile phone, public certificate, and credit card, however, are being used.



(PQC) in preparation for the era of quantum computing, etc., researches and

standardization are active in international and domestic countries.

Alternative Means of Resident Registration Numbers

In order to minimize the use of resident registration numbers offline, the Ministry

of the Interior and Safety worked with the existing i-PIN service provider to

provide the My-Pin service that worked in conjunction with i-Pin to verify the

identity offline in 2014. In 2018, a credit card identity verification service was also

introduced to meet the market requirements to secure various identity verification

services and to allow users to conveniently select and use identity verification

services. Due to the problems that damages continuously occur when resident

registration numbers difficult to change are injudiciously used and leaked, the

『Act on the Information and Communications Network』 (2012) and the 『Personal

Information Protection Act』 (2013) were amended to prevent resident registration

numbers from being used online and offline unless the collection and use of such

resident registration numbers are stipulated by laws. These led the minimization

of the use of resident registration numbers and the supply and expansion of

alternative means for resident registration numbers.

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Overview

The transfer of information had been mainly made through paper documents but

the emergence of computers and the Internet has mainly led to the transfer of

information through electronic documents. In addition, with the development of AI

and IoT technologies, the processing and utilization of data by using information

generated through electronic documents is expected to become common. In order

to actively use electronic documents in the upcoming society, the reliability and

integrity of the creation, distribution, and storage of electronic documents must

be ensured. In order to legally ensure the reliability of distribution of electronic

documents and the integrity in storage, the ‘certified electronic document

intermediary system’ and the ‘certified electronic document center system’ are

operated in accordance with the 『Framework Act on Electronic Documents and

Transactions』.

Certified Electronic Document Intermediary System

The certified electronic document intermediary system is a system made upon the

amendment to the 『Framework Act on Electronic Documents and Transactions』

in 2012 to actively use e-documents and increase economic efficiency to give

legal power of inference for sending, receiving, and viewing e-documents in the

transmission and reception similarly to registered mails offline.

Files in electronic forms are effective to be created, distributed, and stored from the

aspects of speed and convenience. In order to actively use electronic documents in

work and life, the reliability and integrity of creation, distribution, and storage must

be guaranteed. For legal guaranty, the ‘certified electronic document intermediary

system’ and the ‘certified electronic document center system’ are operated.



Certified Electronic Document Center System

When the 『Framework Act on Transactions』 was enacted in February 1999, legal

force for e-documents was granted to prevent the force of the documents in an

electronic format from being denied. In order to establish a systematic basis for

storing reliable electronic documents, the certified electronic data authority system

was introduced through the amendment to the 『Framework Act on Transactions』

in 2005.

The notification and technical specifications related to the certified electronic data

authority to meet the requirements concerning the storage of the e-documents

specified in the law was enacted in 2006 and accordingly, a first certified

electronic data authority was designated in February 2007. In June 2012, due to the

amendment to the 『Framework Act on Electronic Documents and Transactions』,

the name of a certified electronic data authority was changed to ‘certified

electronic document center’.

Due to the demand for safe storage of e-documents, the total e-document storage

volume in the Certified Electronic Document Center is steadily increasing every

year. The stored documents mainly include various certificates, and finance-related

e-documents and the electronic forms of documentations gradually increase.

Planned the certifiede-address and the

intermediary system.

Amended the Framework Acton Electronic Documents and

Transactions.

Lessened qualificationrequirements of a certified

electronic document intermediary(capital, personnel, etc.)

Newly designated certifiede-document intermediaries

(two organizations).

Initially designated thecertified e-documentintermediary (#Mail).

Dec. Dec. Jan. Sep. Mar.

Jun. Jun. Jul. Mar. & Jun.

Korean national PoliceAgency and Ministry of

National Defense enforcede-notice (#Mail).

Changed the certifiede-document

intermediary-exclusiveorganization(NIPA→KISA).

New intermediary-basedpilot service

(Korea TransportationSafety Authority)

Lessened technologicalrequirements of a certified

electronic document intermediary(#mail to diversification)

Public e-noticing servicein effect(more than 20

organizations introduced(or to be introduced))

2010 2012 2014 2016 2017 2018 2019

[Fig. 3-3-1] Development of Certified Electronic Document Intermediary System

[Korea Internet & Security Agency, 2019]

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InternationalCooperation


InternationalCooperation


B. Information Security and Personal Data Protection



Overview

The concept of Internet Governance was defined the International society from

the WSIS in Tunisia in 2005 to ‘a system under which the government, the private

sector and civil societies have their roles in developing and applying common

principles, rules, and decision-making procedures to develop and use the Internet’

in the International society. The early topics about Internet Governance are about

the management of Internet address resources such as domains and IP addresses.

These discussions started while the National Telecommunications and Information

Administration (NTIA) under the U.S. Department of Commerce that has physical

authority to manage Internet address resources signed the contract for entrusting

the authority to manage Internet address resources with the U.S.-based NGO

Internet Corporation for Assigned Names and Numbers (ICANN) in 1988. As the

NTIA announced the intention to transition the authority function to the Internet

Assigned Numbers Authority (IANA) as a private organization in March 2014, full-

scale discussions on the establishment of a new Internet Governance system

started to be made.

Internet Corporation for Assigned Names and Numbers (ICANN)

The ICANN as an international organization that manages global Internet

addresses including domain names and IP addresses was established, led by the

U.S. government in 1998. The regular meetings of the ICANN Board are held three

times a year with each continent hosting in turn. Various stakeholders, including

the government, private sector, academia and civic groups, gather to decide on

an international policy on internet addresses according to a bottom-up decision-

making method and discuss Internet address governance models.

Internet Governance is defined as a system under which the government, the

private sector and civil societies have their roles in developing and applying common

principles, rules, and decision-making procedures to develop and use the Internet

and the Internet Governance Forum (IGF) was established to actively discuss them.

In center of the IGF, the topic of the discussion on Internet governance has been

changed from Internet address resources to the whole Internet.


International Telecommunication Union (ITU)

The ITU that is the specialized agency for information and communication

technologies (ICTs) under the United Nations is an intergovernmental organization

(IGO) with the goal of promoting international cooperation for improvement

and effective use of telecommunications. The ITU was established in 1932 to

promote international cooperation on wired telegraphs. Due to the development

of technologies, the organization has expanded its areas including the fields of

radio communication, satellite, and broadcasting as well as wired and wireless

telecommunication.

Internet Governance Forum (IGF)

The IGF office under the United Nations established and operates the Multi-

stakeholder Advisory Group (MAG) comprised of more than 50 Internet

governance specialists around the world for the purpose of advising the Secretary-

General of the UN on the program and schedule of the IGF meetings.

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B. Information Security and Personal Data Protection

1) Information Security

In the hyper-connected society, the dependence of people on the Internet in

the daily lives is increasing and cyber threats occur in various areas regardless

of borders. Active information security programs and supranational responses

are required due to the widespread use of the Internet of Things (IoTs), the

development of big data technologies, and white-collar cybercrime.

The relevant ministries including the MSIT and the Ministry of Foreign Affairs are

discussing plans for building confidence and enhancing cybersecurity capability for

international cooperation concerning cybersecurity with major countries including

the U.S., Japan and the EU. The UN, and the OSCE are actively participating in the

discussion on international norms.

A representative information security-specialized organization is the KISA and

Korea Internet Security Center (KISC) under the KISA is actively working as Korea’s

representative security center under the name of Korea Computer Emergency

Response Team Cooperation Center (KrCERT/CC). The KrCERT/CC plays a leading

role through the activities as a body for international Internet security-related

accidents, promoting the tightened cooperation with foreign relevant bilateral or

multilateral organizations, supporting the enhanced capabilities of developing

countries, and taking the lead in enhancing the cyber security environment in the

International communities.

2) Personal Data Protection

Data is called ‘crude oil’ in the era of the 4th industrial revolution. In particular,

since personal information becomes more important in analysis of big data,

Active information security programs and supranational responses are required

due to the widespread use of the Internet of Things (IoTs), the development of big

data technologies, and white-collar cybercrime. In particular, personal information is

increasing in big data analysis, and international cooperation is essential for personal

data protection in today's hyper-connected society.


countries around the world are actively competing with each other by reorganizing

laws and systems related to personal information. Not only the main goal is to

strengthen the level of protecting personal data by region and country, but also it

includes data localization and strengthened requirements for cross-border transfer

of personal information.

The strengthened requirements for cross-border transfer of personal information

could largely bring two effects. The first effect is to protect the personal

information of Citizens which have been transferred abroad by limiting the

thoughtless cross-border transfer of personal information. The other effect is to

block the move of the U.S.-based very large ICT firms which intend to monopolize

personal information of people around the world.

A case of enacting a legislative system in an area is the EU’s General Data

Protection Regulation (GDPR) enforced in 2018. The GDPR allows the EU

countries to freely transfer and use collected personal information to grow national

competitiveness for the digital single market and requires companies such as

Facebook, Amazon, Netflix, and Google to manage the personal information of

residents in the EU more safely.

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Overview

During the period from 2005 to 2018, the number and percentage of the world’s

population using the Internet continue to increase. According to the ITU, the

number of global Internet users was 3,896 million up by approximately 246 million

from a year earlier and the percentage was 51.2%.

Given the progress of the change in the world’s population using the Internet,

the percentage of the population using the Internet in developing countries are

remarkable. The percentage in developing countries, which was only 7.8% in

2005, recorded 45.3% in 2018, roughly up by 5 times over the last 12 years. The

percentage of the world’s population using the Internet was 80.9% in 2018 in

developed countries, while the percentage in Africa was merely 24.4%. This proves

that it is necessary to make efforts to improve the internet use environment of the

developing countries.

As of 2018, as for the percentage of the population using the Internet by country,

Denmark showed the highest percentage with 97.1%, followed by Norway (96.5%),

and Sweden (96.4%). Korea recorded 95.1%.

During the period from 2005 to 2018, the number and usage rates of global Internet

users continue to increase. In 2018, the percentage of the world’s population using

the Internet appeared to be 51.2%. In particular, the increase in the percentage of the

population using the Internet in developing countries is remarkable.

3896

2018

3650

2017

3417

2016

3170

2015

2880

2014

2631

2013

2424

2012

2184

2011

1991

2010

1729

2009

1547

2008

1367

2007

1147

2006

1024

2005

15.8

No. of Population Using the Internet Percentage of Population using the Internet

17.6 20.523.1

25.528.9

31.334.3

36.939.9

4345.8

48.6

51.2

[Fig. 4-1-1] Change in Number and Percentage of World’s Population Using the Internet

[ITU, ITU Statistics, 2018]

(Unit: %, 1 Million Persons)


Asia-Pacific Region

According to the ITU, since 47 percent of the population used the Internet in the

Asia-Pacific region in 2018 and the mobile Internet users totaled 2,880 million in

2018, it appeared that the number of mobile Internet users is steadily growing.

In addition, as the high-speed Internet subscribers continuously increase with a

record of 507.3 million up by 48 million compared to the previous year.

North and South America

According to the ITU, the percentage of the population using the Internet in South

and North America was 69.6%, with which the Americas was ranked the second

after Europe. In 2018, the number of mobile Internet users was 981 million and

the percentage of the population using the Internet exceeded 97.1%, which is

increasing sharply every year.

Europe

As of 2018, the percentage of the population using the Internet in Europe was

79.6% and this means that four out of five Europeans used the Internet, which is

the highest percentage among the continents around the world. In 2018, Europe

had 636 million mobile Internet users, relatively lower than the Asia-Pacific region

and the Americas but the number is steadily on increase.

Middle East and Africa

According to the ITU, 54.7% of the population in the Middle East appeared to use

the Internet and 24.4% in Africa showed the steady growth every year.

Status of International Indices

Being positioned at the top of rank in the ICT International indices announced by

International organizations such as the UN and the ITU and private organizations

such as WEF and the International Institute for Management Development (IMD),

Korea has its presence as an Internet powerhouse.

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Appendix

• Abbreviations

• Organization Abbreviations

• Writing Staff

Abbreviations

3D 3 Dimension

5G 5th Generation

6NGIX IPv6 Neutral Generic Internet

AADSL Asymmetric Digital Subscriber Line

AI Artificial Intelligence

AON Active Optical Network

API Application Programming Interface

AR Augmented Reality

ARPANET Advanced Research Projects Agency NETwork

AS Autonomous System

ATM Asynchronous Transfer Mode

APIGA Asia Pacific Internet Governance Academy

APPA Asia Pacific Privacy Authorities

BBGP Border Gateway Protocol

CCMS Compact Muon Solenoid

CERN European Organization for Nuclear Research

CFI International Conference on Future Internet Technologies

ccTLD country code Top Level Domain

CPBR Cross Border Privacy Rule system

CBDC Central Bank Digital Currency

CRM Customer Relationship Management

CAGR Compound Annual Growth Rate

DDNSSEC Domain Name System Security Extensions

DID Decentralized IDentification

DART Data Analysis, Retrieval and Transfer System

Ee-VLBI electronic Very Long Baseline Interferometry

ERM Enterprise Resource Management


FFSA Financial Service Authority

FE Fast Ethernet

FTA Free Trade Agreement

FTTH Fiber To The Home

FIF Future Internet Forum

FIA Future Internet Architecture

GGDPR General Data Protection Regulation

GPS Global Positioning System

GNSS Global Navigation Satellite System

G2B Government to Business

G4B Government for Business

GE Gigabit Ethernet

GEANT Grand European Academic Network

GENI Global Environment for Network Innovations

gTLD generic Top Level Domain

HHTML HyperText Markup Language

IIaaS Infrastructure as a Service

ICT Information and Communications Technology

IoT Internet of Things

IP Internet Protocol

i-PIN internet Personal Identification Number

IPTV Internet Protocol TV

IPv4 Internet Protocol version 4

IPv6 Internet Protocol version 6

ISP Internet Service Provider

IX Internet eXchange

IRNC International Research Network Connection

ITER International Thermonuclear Experimental Reactor

ICDPPC International Conference of Data Protection & Privacy Commissioners

IDC International Data Corporation

KK-PION Korea Patent Information Online Network

KREONET Korea Research Environment Open NETwork

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LLBS Location Based Service

LBSP Location Based Service Platform

LHCONE LHC Open Network Environment

LHC Large Hadron Collider

MMaaS Mobility as a Service

MAU Monthly Active Users

MCN Multi Channel Network

MAG Multistakeholder Advisory Group

Mu-MINO Multi User-Multiple-input and Multiple-output

NNPAPI Netscape Plugin Application Programming Interface

NORDUnet Nordic R&E Network

NFV Network Function Virtualization

New gTLD New Generic Top Level Domain

NOC Network Operations Center

OOTT Over The Top

ONF Open Network Foundation

O2O Online to Offline

ONOS Open Network Operating System

OTN Optical Transport Networking

PPaaS Platform as a Service

PSTN Public Switched Telephone Network

PTI Public Technical Identifiers

PKI Public Key Infrastructure

PORT-MIS Port Management Information System

QQPS Quadruple Play Service

RRTA Regional Trade Agreement


SSaaS Software as a Service

SMF Single Mode Fiber

SDN Software Defined Network

SLD Second Level Domain

SMF Single Mode Fiber

SMS Short Message Service

SNS Social Network Service

SWG5 Special Working Group 5

SKA Square Kilometer Array

SDSS Sloan Digital Sky Survey

SSI Self-Sovereign Identity

TTPS Triple Play Service

TDM Time Division Multiplexing

TWDM Time and Wavelength Division

TEIN Trans-Eurasia Information Network

TLD Top Level Domain

UUSMCA United States-Mexico-Canada Agreement

UTP Unshielded Twisted Pair Cable

UDRP Uniform Domain Name Resolution Policy

URS Uniform Rapid Suspension System

UBRI University Blockchain Research Initiative

VVDSL Very high-bit rate Digital Subscriber Line

VDNO Virtual Dedicated Network Orchestrator

VOD Video On Demand

WWCAG Web Content Accessibility Guidelines

WAN Wide Area Network

WDM Wavelength Division Multiplexing

WLAN Wireless Local Area Network

WPAN Wireless Personal Area Network

WWAN Wireless Wide Area Network

WWW World Wide Web

XxDSL xDigital Subscriber Line

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Organizations Abbreviations

A

APNIC Asia·Pacific Network Information Center

ARIN American Registry for Internet Numbers

AfriNIC Africa Network Information Center

ADNDRC, Asian Domain Name Dispute Resolution Centre

APrIGF, Asia－Pacific Region Internet Governance Forum

APEC Asia-Pacific Economic Cooperation

C

CDI Center for Data Innovation

CTI Committee on Trade and Investment

CNNIC China Internet Network Information Center

E

ECSG Electronic Commerce Study Group

ETSI European Telecommunications Standard Institude

EDPB European Data Protection Board

F

FCC Federal Communications Commission

G

GLIF Global Lambda Integrated Facility

GAC Governmental Advisory Committee

GLORIAD Global Ring Nework for Advanced Applications Development

I

IIC Industrial Internet Consortium

ICANN Internet Corporation for Assigned Names and Numbers

ITU-T Telecommunication Standardization Sector of the International Telecommunications

Union

ISO International Organization for Standardization

IEC International Electrotechnical Commission


ITU International Telecommunication Union

IDC Internet Data Center

IEEE Institute of Electrical and Electronics Engineers

IETF Internet Engineering Task Force

IGF Internet Governance Forum

IMD International Institute for Management Development

ISOC Internet Society

J

JTC 1 Joint Technical Committee 1

K

KISTI Korea Institute of Science and Technology Information

KAIST Korea Advanced Institute of Science and Technology

KISA Korea Internet & Security Agency

KISDI Korea Information Society Development Institute

KRNIC Korea National Information Center

L

LACNIC Latin American and Caribbean Internet Address Registry

N

NSF National Science Foundation

NIR National Internet Registry

NTIA National Telecommunications and Information Administration

NICT National Institute of Information and Communications Technology

NSA National Security Agency

O

OECD Organization for Economic Cooperation and Development

R

RIR Regional Internet Registry

RIPE NCC Réseaux IP Européens Network Coordination Center

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S

SC 42 Sub Committee 42

SEC Securities and Exchange Commission

T

TAFT Financial Action Task Force on Money Laundering

U

UNCITRAL United Nations Commission on International Trade Law

W

W3C World Wide Web Consortium

WSIS World Summit on the Information Society

WEF World Economic Forum

WSIS World Summit on the Information Society

WTSA World Telecommunication Standardization Assembly

WIPO World Intellectual Property Organization

WHO World Health Organization


Message from the Publisher Moon Yong Sik National Information

Society Agency President

History of Internet in Korea Editorial department

Major Statistics of Internet in 2019 Editorial department

Top 10 Internet News of 2019 Choi Hong Kyu EBS Researcher

Part 1 Industry and Service

Introduction Kim Dae Ho Inha University Professor


A. Artificial Intelligence Kim Myung Joo Seoul Women's

University Professor

B. Cloud Choi Young Jin Eulji University Professor

C. IoT Kang Sun Moo Kyung Hee University Professor

D. Blockchain Min Kyung Sik Korea Internet & Security Agency Director of the center

E. Virtual Reality Choi Pil Sik Tech G Representative


Park Pu Re Me

Information and Communication

Industry Promotion Agency

Senior Researcher

Cho San Gu Korea Shared Economy Co., Ltd.

president of association

Han Sang Ki Tech Frontier the chief director

2. Internet Service

A. Internet Information Search Kim Min Seok Nielsen Korea Team Leader

B. Communication Kim Min Seok Nielsen Korea Team Leader

C. Internet Finance & Fintech Jung Yoo Shin Sogang University Professor

D. e-Commerce Lee Jung Hyun Korea Internet & Security Agency Chief Researcher

E. Location Information Kang Yi Suk Korea Internet &

Security Agency Senior Researcher


A. Use of Contents

Oh Ha Young Korea Creative Content Agency Senior Researcher

Kim Sung Jin Seoul Digital Foundation Team leader

B. Creator Choi Hong Kyu EBS Researcher

C. Online Advertising Lee Bo Ram Korea Internet & Security Agency Senior Researcher

Writing Staff

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Part 2. Utilization


A. Individual and Household Park Han Woo Yeungnam University Professor

B. Business Kim Do Jin Bucheon University Professor



Lee Seung Min

Institute for Information &

communication Technology Planning

& evaluation

Chief Researcher

Ko Young Sam Dongmyeong University Professor


Ko Young Sam Dongmyeong University Professor

Kwak Hye Sook National Information Society Agency Senior Researcher

Son Ji Won Open Net Lawyer



Park Ji Hyun Korea Internet & Security Agency Researcher

Ko Heung SukKorea IPTV

Broadcasting Association

Team leader

Noh Suk Joon Sungshin Women's University Professor

B. Laws on Internet Usage Kim Hyun Kyung

Seoul National University of Science

and TechnologyProfessor

C. Improvement and Promotion

of Regulations on Internet

Gong Yoon Jung National IT Industry Promotion Agency Senior Researcher

Kang Sung Im National IT Industry Promotion Agency Senior Researcher


A. e-Government Park So Ah Daumsoft Director

B. Digital Government Innovation Jung Joon Won National Information

Society Agency Team leader

Part 3. Infrastructure


A. Backbone Networks Ahn Soon Sik Internet & Security

Agency Secretary-general


Kim Jae Hoon Ajou University Professor

Kim Jung Tae Electronics and

Telecommunications Research Institute

Researcher

C. Research Networks Kim Dong Kyun

Korea Institute of Science and

Technology Information

Senior Researcher



Kim Sa Jin

Institute for Information &

communication Technology Planning

& evaluation

Senior Researcher

Gang Shin GakElectronics and

Telecommunications Research Institute

Director


A. IP Addresses and AS Numbers Choi Yoon Mi

Korea Internet & Security Agency Senior ResearcherB. Domains Hwang Hye Ran

C. Domain Name System (DNS) Kang Sang Hyun

D. History and Trend of Conflicts of

AddressesLee Dae Hee Korea University Professor


A. Technology Standardization Gang Shin Gak

Electronics and Telecommunications Research Institute

Director


Lee Seung JaeKorea Internet & Security Agency

Chief Researcher

Kim Ki Moon Senior Researcher

Kim Dae Hyun Senior Researcher

C. Certified e-Documents Kim Jung Joo Korea Internet &

Security Agency Team leader

Part 4. International Cooperation

A. Internet Governance Cheon Mu Ho Korea Internet &

Security Agency Chief Researcher

B. Information Security and Personal

Data Protection

Hong Ji Young Korea Internet & Security Agency

Senior Researcher

Jung Tae In Chief Researcher

C. Global Status of Internet Lee Hae Sol Korea Internet &

Security Agency Senior Researcher

Appendix

Abbreviations

Editorial departmentOrganizations Abbreviations

* The Content contained in the 2019 Korea Internet White Paper may differ from the official views of the Ministry of Science and ICT and the National Information Society Agency.

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Date of Printing _ Mar. 2020

Date of Publication _ Mar. 2020

Publisher _ Moon, Yong-sik

Publishing Organization _ National Information Society Agency (NIA)

Address _ National Information Society Agency (NIA), 53, Cheomdan-ro, Dong-gu, Daegu, Republic of Korea

Tel _ 053-230-1114

Design _ HANKOOK AD

ISBN _ 979-11-86720-08-0

Report No. _ NIA Ⅷ-RBE-C-19066

• The copyright and publication rights of this white paper are held by the MSIT and the NIA.

Therefore, any reprinting of the content in this white paper without permission is strictly

prohibited. Upon the use of the content in this book, “The Ministry of Science and ICT and the

National Information Society Agency, 2019 Korea Internet White Paper”shall be identified.

• If you have any questions regarding the content or distribution of, this white paper, please

contact the National Information Society Agency (Tel. 053-230-1114). “2019 Korea Internet

White Paper”can be read as an e-book at the website (http://www.nia.or.kr/).

2019KOREA

INTERNET WHITEPAPER

Daegu Headquarters (41068) 53, Cheomdan-ro, Dong-gu, Daegu, Republic of Korea 053-230-1114Seoul Office (04520) 14, Cheonggyecheon-ro, Jung-gu, Seoul, Republic of Korea 02-6191-2114Jeju NIA Global Center (63568) 68-11, Seohojungang-ro, Seogwipo-si, Jeju-do, Republic of Korea 064-909-3114www.nia.or.kr

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