In the recently published 2011 IT Industry Competitive Index report, South Korea ranks 19th place with 60.8 points.

In a case study administered by the Economist Intelligence Unit of Business Software Alliance, South Korea is today's world's largest producer of display panels and memory semi-conductors and the second largest manufacturer of mobile phones, making the whole IT industry as the main driver of its economic success.

The Ministry of the Knowledge Economy (MKE) stated that South Korea's IT exports recorded US$154-billion revenue in 2010 from 1970's US$154 billion. The current figure accounts for 33 per cent of the country's total exports and 11 per cent of its GDP.

Officials of MKE pointed out the country's efficient collaborative efforts between the private sector and the government with the latter affording tax incentives and cultivating goals for speed and coverage without hurting competition, as the key point to its success. Other factors such as the government's initiative to advance cooperation among businesses, research institutions and universities contributed also to the success.

However, despite all of these potentials that have supposedly pushed South Korea to become an IT powerhouse, the rankings showed a stark ebbing of South Korea's IT industry as this is the fourth consecutive year that the country slipped further down in the index.

A major factor to such tumble is the government's protectionist economic policy against foreign direct investments (FDI) and in favor of chaebols (nobles) like the IT giant Samsung. MKE officials highlighted the country's strict policy is "causing controversy over discrimination against foreign enterprises" making South Korea a less favorable destination for IT investments in Asia Pacific.

Another contributive factor pointed out in the case study was the government's decision to promote technologies with limited commercial appeal when it pushed for the launching of Samsung's broadband, WiBro, despite the giant company's preference to develop 3G standards. Today, SK Telecom and Korea Telecom, the operators of WiBro have migrated to LTE or 4G technology and the funds used in WiBro were wasted.

South Korea's favor over its homegrown companies like Samsung falls short of breeding own talents to become entrepreneurs. Thanks to the support of its government, Samsung has become so strong that most small-scale entrepreneurs have been extracted out of the IT landscape.

Seoul vowed it has expanded the scope of sectors to welcome more foreign investments and to create a friendly environment conducive to fair competition especially among foreign companies.