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Characteristics & Outlook of Information Provision Industry

What is an Information Provider (IP)?

Business or individual who provides information that is processed through “Raw information → Information collection·processing·storing (DB) → Information Communications Devices (Telephones, PC Communications, Internet, Documents, etc.) → Information consumer.”
According to the Industrial Questionnaire by the Miniostry of Information and Communications, IP industry is categorized as a value-added communications service, which is comprised of advanced fax, data network service, on-line information service and other value-added communications service.

Characteristics of IP Industry

Being a industry that collect, process and provide information of business, jobs, stock markets, real estate markets, patents, news, games and all other daily information, IP industry has low entry barrier for anyone who has new and original idea.
With the advancement of high-speed communications networks, competitions in the industry is getting more and more fierce, and the contents providers (CPs) or knowledge creators become the sources of creating value-added.
Now that the profitability will be depending on the quality of contents, IP industry volume will grow. Consequently, a business start-up without enough market survey or other preparations will be very likely to go under.

Current Status & Outlook on Korea's IP Industry

Since the late 1990's, when the number of PC communications service proviers and internet-based service providers increased, now 2,500~3,500 IPs are providing more than 1,500 kinds of information service.
- Being small in size and young, Korean IP industry is subordinated to large-scale PC communications businesses.
Given the world market trends, Korean IP industry will shift and expand from the PC-communications-oriented one to a Internet-based CP industry.
- Covering the multimedia factors of Internet and multimedia contents service employing hypertext functions, CP industry is a more advanced one than the IP that carries just text messages.
The combined sales of value-added communications service and database production market reached 1,295.9 billion won in 1999, more than 50% up from 852.7 billion in 1998.
The number of IP lines have grown by 30% on yearly average since 1997 and as of January 2000, 536,367 lines were providing information services.
- IP service subscribers have grown by 46% per annum since 1997, when only 8.5 million were subscribed to the service, to reach 18.6 million as of January 2000. Above all, the number of internet access subscribers have exploded, while less signed up for PC communications service. As of April 2000, internet population is more than 14 million.
Meanwhile, DB type IP industry recorded 215.8 billion in sales with .3095 DBs and 1,357 DB productions in 1998. The average growth rate of overall database market is 35%.
After adjustment of overlapping IPs in each service, 2,850 IPs are in operation with sales records of 690 billion won and hiring 11,500 in 1999. By 2003, the number of IPs is expected to grow by about 8% every year and sales grow by 20%, number of employees, 10%.

Korean IP Industry Outlook

Korean IP Industry Outlook: 1998,1999,2000,2001,2002,2003,1998~2003 Annual Growth Rate(%)
	1998	1999	2000	2001	2002	2003	1998~2003 Annual Growth Rate(%)
IP 1)	2,500	2,850	3,100	3,300	3,500	3,650	7.9
Sales 2) (￦1 bil.)	532	692	865	1,038	1,194	1,373	20.9
Business players (persons)	10,000 ³⁾	11,500	12,900	14,100	15,100	16,100	10.0
PC Telecommunications Subscriptions (10,000 persons)	498	560	620	670	710	750	8.5
No. of DB 4)	3,095	3,500	4,000	4,400	4,800	5,100	10.5

※ Source: Kim, In-jung, 1999, p. 17.
※ Note: 1) Overlaps-adjusted, web-based individual contents providers are excluded
※ Note: 2) On-line IP business 3) Estimation 4) Overlaps-adjusted.

Gangwon's Industrial Conditions

Current Status of IP Industry

Gangwon has relatively weak industrial base for IP in terms of number of companies and employees and production amount.
- Out of the 3,362 value-added communications service providers across the country, only 118, or 3.3% are operating in Gangwon, with 1.8% of employees and 0.6% of production amount.
- Gangwon has practically no DB production industrial base.

Potentials of IP Industry

As it is easy to start a busines and succeed in the industry, IP can prosper in any place.
- Average foundation costs of the industry are only 25 million won and it is relatively easy to enter and leave the market.
- Even without a specific technology or patent, fresh idea and mobility will do to succeed and creat high value-added in the industry.
- With the service basis shifting from the previous PC communications to Internet, more business opportunities are found in the market.
Even in Wonju city, where the IP industrial base is relatively weak, the industry can prosper, but it doesn't seem to be easy to succeed in the city.
- As low entry barrier, more often than not, leads to fierce competition, a differentiated competitiveness is a must to succeed in the industry.
- Given, howerver, that the essential competitive edge shall be human resources with technology, Wonju can still be competitive enough.

With three universities and two colleges producing computer-related manpower every year, Wonju has the potential growth.

The number of students in IP-related industry in Wonju is more than a thousand and most of which are from the Wonju National University.

Computer-related Courses in Universities around Wonju Area

Computer-related Courses in Universities around Wonju Area: University, No. Students, Courses & Students, Sangji, Yeonsei, Halla, Wonju Nat'l , Sangji Yeongseo
University	No. Students	Courses & Students
Sangji	6,166	Computer Science (184)
Yeonsei	5,488	Computer Science (43)
Halla	829	Electronics Engineering (20), Computer Science & Engineering (17)
Wonju Nat'l	2,144	Computer & Information Process (219), Electronic Telecommunications (196), Office Automation (155), Administrative Communication (50)
Sangji Yeongseo	3,630	Office Automation (120), Electronic Calculation (120)

※ Source: Wonju-si
※ Note: as of September 1999, based on the number of enrolled students

Strategic Industry

Despite the advanced internet and other information communications devices, IP industry finds it difficult to succeed in Gangwon area, where the industrial base for collecting, processing and storing information is weak.
- Even if it is easy to collect, process and store information, it is still difficult to get access to information due to its weak fundamentals for raw information production.
- As IP industry is on a growing trend as the Internet· PC communications service provider are, competition in niche market is not easy as well.
However, broadly interpreting the IP industry, if one provides information with more focus on producing information contents, there still exist chances to succeed in the industry.
- Competitions in the simple IP industry are fierce and, consequently, it is highly likely to fail in the market. Therefore, note that the sources to creat value-added are moving from simple information provision to contents production.
- Since information contents production requires significant amount of investment, enough funding is a key to success.
In case of Wonju, it is better to focus on producing information contents that suits the characters of the region in the initial stage than on the high-growth field with hard competitions.
- In the shorter run, it is recommended to begin with information on envrionmentally friendly clean specialty products like health medicine, clean nature and agricultural products and rich natural medicinal herbs.
- In the long run, it is desirable to develop multimedia contents for internet PC communication service providers and connect to the multimedia contents industry of Chuncheon area.
As IP industry is based on a vast DB of information, it is also important to build a database on clean specialty products.
- Since technology and capital are required in building database, it is necessary at the initial stage to cooperate with the Software Promotion Center in Gangneung and creat demands in public sector.
- And as IP industry is heavily influenced by the level of informatization, it is important to informatize the region.
As it looks hard for companies to directly provide information to end-users in Wonju, it is more desirable to provide information to the Internet·PC communications service provider at the inintial stage.
As IP industry shares fundamentally the characteristics of venture business, it is recommended to approach the industry with the view of nurturing ventures.
- As it takes a signficant amount of time from the foundation of a information providing company to commercialization of the prototype, the company may suffer cash stringency. Therefore, a supporting system is required at this point.
- Various supporting programs by the central government, especially the Ministry of Information & Technology are in place to assist small-and-medium companies, research center and others with technology development and commercialization