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VisionWorks' Breakthrough Solutions
Harnessing the Forces of Change
Broadband Quiz for the Day – December 2004
1) Other things being equal, which nation (or region or
community) would grow and develop most rapidly – one with a high
percentage of broadband connectivity (always-on, high-speed digital
communications), or one with a low percentage of broadband
connectivity?
Response:
The community with
the higher percentage can take greater advantage of education and
workforce opportunities, and more successfully create and attract
new businesses and residents. Furthermore, its citizens, workforce,
and youth would have a greater comfort level with high-end
applications, making it easier to compete in the global marketplace.
2) Which nation has the highest percentage of its households
with broadband connectivity:
___ a) U.S.A.
___ b) Canada
___ c) Germany
___ d) Great Britain
___ e) Ireland
___ f) South Korea
___ g) North Korea
___ h) Kuwait
___ i) I don’t know
___ j) I don’t know,
and I don’t care, but I suspect you are going to tell me anyway
Response:
The nation with the
highest percentage of its households connected to broadband is
South Korea, with over 75 percent of its households wired.
In the U.S., only slightly more than 20 percent of homes have
broadband connectivity.
Other facts:
- In cities like Seoul and Busan, broadband
is as basic a utility as water or electricity.
- Broadband phones are becoming popular, and
the government anticipates that by 2008, over 80 percent of the
population of Korea will have broadband mobile phones.
- The South Korean government subsidized the
installation of broadband, based on the belief that pervasive
broadband will increase industrial efficiency, create
e-businesses and jobs, improve global competitiveness, and
significantly increase family incomes.
- Korea’s broadband networks are much faster
(20 megabits/second), and less expensive than DSL or cable
broadband in U.S. homes (2 megabits/second). The government
plans to upgrade the nation’s backbone to 50 megabits/second,
and by 2012, to 100 megabits/second, which is blazing fast.
- South Koreans are already downloading
full-length digital movies (in seconds), and over 20 percent of
all purchases are made on-line, including banking and stock
purchases.
- Roh Moo-Hyun’s upset victory in the 2002
presidential race is attributed to on-line grassroots
campaigning. President Roh, who can markup documents in HTML,
the language of the web, recently predicted: “Over the next five
years the government will foster new-generation mobile
communications, intelligent robots, digital televisions,
post-PCs, and various software industries as the new engine of
growth.”
How Did They Do It?
So how did South Korea leapfrog over the U.S.
to become the world’s leader in high speed Internet? Americans
invented the Internet in the late 1960s, when South Korea was still
recovering from war and its devastated economy. Have we been asleep
at the wheel since then?
South Korea’s progress started with a visionary
leader who understood the times and what it takes to create a viable
future. Kim Dae-Jung, the current president’s predecessor, decided
to rebuild the nation as a knowledge superpower. That decision led
to deregulation of the telecommunications industry, marketing
broadband to the public, investment of public funds for a fiber
backbone, and a billion dollars in financial aid to companies to run
fiber to homes.
This process was aided by Korea’s fascination
with on-line games. This past summer, over 100,000 people came to a
park to watch the finals of the Starcraft professional gaming
league. At the same time, only 16,250 attended Korea’s all-star
baseball game.
With broadband connectivity now a given, the
next phase in development is to provide high value services that are
enabled by broadband. These services include faster music
downloads, unlimited television and movie subscriptions, video
recording, and the ability to connect to a home network with a
handset. This allows internet-enabled home appliances such as air
conditioners, microwave ovens, washing machines, rice cookers, and
robot vacuums to be controlled by a handset. Some South Korean
homes even have refrigerators with 13-inch flat panel displays on
the door and cameras so parents can check on their kids after
school.
Moving further in this direction, the South
Korean government plans to have 13,000 smart apartments by the end
of this year and 10 million smart homes by 2007. They anticipate
that this will stimulate even greater demand for services, such as
satellite broadband that can beam digital movies and TV to cars and
trains traveling up to 90 miles per hour. These new technologies
that can then be sold to the world. (Source:
Fortune Magazine, September 20, 2004)
Key Lessons to Take Home
What can we learn from the story of South Korea
and its bold investment into telecommunications? Here are some
observations:
- Great things often come out of
desperation, from having your back to the wall, and from a
realization that your community, your region, or your nation is
being left behind in the world economy. This desperation can
then be channeled into a sense of urgency to move forward.
- Progress requires bold, visionary
leaders who understand the times and have the courage to
forge a strategy that will enable you to not only catch up with,
but surpass everyone else. (Did you catch that President Roh can
code in HTML?)
- Wise public policy is needed to
foster strategic infrastructure investments and create a
favorable policy environment. Good policy can stimulate demand
for services from the public and significant investment from the
private sector.
- When you change the environment, you
change the culture. Providing broadband connectivity
stimulated the creation of PC baangs – a combination
Internet café and game room, which became wildly popular for
young South Koreans and fueled demand for broadband connectivity
to the home.
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Harnessing the Forces of Change
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