By Nick van der Leek
South Korea is one-tenth the size of SA, far removed from the largest markets and, until a couple of decades ago, was ensconced in an agricultural economy.
Yet the country is part of the trillion-dollar club and one of the world's 15 largest economies. It is projected to be the second-wealthiest economy per capita by 2050.
Korea - All connected
How is all this possible for a small peninsula that has as many citizens as SA?
The key factor underpinning South Korea's meteoric rise is that the country has over the past decade emerged as the most wired nation in the world, and is now the global leader in broadband Internet penetration.
The Internet story starts with telephone penetration, which at a teledensity of 48,8 is three times the world average.
Almost 80% of households have mobile phones, (compared with SA's estimated 50% mobile phone penetration, and exceeding the US's estimated 75%).
As recently as 13 years ago, Korea's Internet penetration levels were less than one per 100 inhabitants. In 2001 Korea emerged as the world's fifth-largest Internet market with 26m users, and today it is the world leader in broadband Internet access. Less than 10% of Americans have high-bandwidth connections, compared with more than 50% of Korean households.
Korea is piloting and deploying connections at 1 000 Mbit/s (the UK average is 4,6 Mbit/s). Koreans have the highest speeds and pay the least for broadband connections, capable of downloading movies in minutes.
How to explain Korea's exceptional Internet penetration, when these seemingly don't correlate with the country's income levels? In fact, it works the other way round: the high levels of IT access have stimulated Korea's income capacity.
Local experts list a number of reasons:
* Koreans have their own language, so there is very little "recycling" and "lifting" of content from outside sources.
* Koreans love to read newspapers, despite the increase in online news sites.
[This has been edited and doesn't quite reflect my meaning. The point is Koreans are voracious readers. Thus books, newspapersand online all do well. Part of the reason for this is a very strong focus on both education and work ethic.]
* Koreans are hard working students. Tertiary-level enrolment is almost 70%.
* Population density helps: 70% of Koreans live in the seven largest cities.
Korea's connectivity has had a huge impact on the economy, which until a decade ago rested on its chaebols, a few large family-controlled conglomerates.
Research firm Connected Nation estimates a 7% broadband adoption, such as Korea achieves in a year, would mean a US$134bn boost to the US economy.
In Korea it has allowed the corporate sector to expand globally at a faster pace than would otherwise have happened.
South Korea's largest conglomerate, Samsung, with 2006 revenues of almost $159bn, is the global market leader in more than 60 products. Samsung and other Korean groups are leaders in building electronic devices ranging from semiconductors to blu-ray players and from home cinema systems to mobile phones. And there is a whole range of traditional white goods, such as microwaves and washing machines, in which these companies first made their names and which still contribute a large portion of profits.
They are forced to adopt new technologies because their domestic market changes so rapidly and consumers adopt new technologies so quickly. Koreans replace their cellphone handsets more often than US consumers do.
Korean companies invest billions of dollars in research and development. Their home market becomes their testing ground before they expand these products to the world market.
Korea is a country of early adopters because its citizens have such a high degree of access to Internet technologies. Its companies are always the first to develop a slew of homegrown gadgets to sell to domestic consumers - via the Internet, of course.
E-commerce in Korea is already 20% of the economy, worth about $200bn.
Korea's "hit" products are identified, deployed and modified for world markets. By the time they reach the globe they have been tried and tested, and have gathered huge consumer momentum.
Korea's success holds numerous lessons for SA.
Firstly, Korea relies heavily on local content. All the top 10 websites accessed by Korean users are Korean. Local content differentiates and links local communities. Home-based portals like Korea's Daum portal, for example (a local version of Google or Yahoo), attracts 450m page impressions [per month] and is a world leader in pages per user and session time.
Daum is able to earn money because it holds a captive market that is Korean, and does not risk "diluting" its content from outside sources.
The Korean websites also keep it local by offering a wide range of services - everything from dating to chatting and gaming - which prevents users from using overseas sites like Google.
In SA, more home-grown Web portals like 24.com will attract a greater number of users to the Internet.
Secondly, a vast investment in SA's urban IT infrastructure is required. Korea's Internet resembles one gigantic Intranet (or local area network), where most users access only local sites.
It is also crucial that SA develops an Internet culture similar to Korea's, which has more than 26 000 Internet cafés and a lively gaming industry (65% of visitors to Internet cafés are gamers).
Almost half - 43% - of South Korea's population have blogs, and almost every Korean twentysomething uses a social network on a daily basis. It's an Internet culture that is inculcated at school, at home and at business level.
And it isn't limited to business and education. Housewives generate 45% of domestic traffic doing shopping, buying and selling shares, taking classes and just surfing. Online banking, and the adoption of other forms of technology, are well ahead of those in SA.
Also read: SA'S RESPONSE TO SOARING GLOBAL OIL PRICES
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