Until the early 2000s, the majority of the brightest students in the country chose computer programming as their major. A decade later, some colleges are decreasing faculty as students are now shunning the major. People in the software industry don’t think they are compensated enough for their hard work.
KT, the country’s leading communications company, announced initiatives to promote the software industry, Thursday. Most of all, it would recompense for the value of the software instead of only paying labor costs.
KT Chairman Lee Seok-chae pointed out that the country, once called an IT powerhouse thanks to globally competitive communications, semiconductors, and display businesses, is losing in the global transition from hardware to software.
“The smart era turned mobile devices into computers. As these computers move from place to place, they need support from cloud computing. As a result, there is a huge opportunity for software here. The market is huge. Everything will be processed with software,” the chairman said.
Korea lacks competitiveness in software as it doesn’t remunerate the sector fairly, the chairman pointed out.
“In countries with a developed software industry, success is guaranteed if you have a good idea. Investors and client businesses acknowledge the value,” said Song Jung-hee, head of the service innovation division at KT.
“In Korea software companies are considered a man power outsourcer. While developed economies take into account value added by the innovation in software, Korean firms determine the value of software by calculating how many men were put to work to create it.”
Even a genius IT expert is paid according to how many days they work, not by how much value they create. “If Steve Jobs was working in Korea, he would be nothing more than a top class technician being paid 12 million won a month,” Song said.
KT announced that it would pay for the value of the software not for the amount of labor. Around 10 percent of its software is purchased from local firms, or between 30 and 50 billion won, will be affected by this new way next year.
“I determined that the businesses that buy software should change their practice, their thoughts and the way they invest in the software. Else, the country’s software industry can’t develop,” Lee said.
He pointed out that software workers were treated like physical workers, without any ownership of their intellectual property. “It discourages them. The young industry people lose their dreams and hope. There will be no future in this way,” the chairman said.
He said KT will buy software as a package, and let the developer have ownership. “We will be only buying the service, just like we do with foreign software companies.” In this way, the software company will be able to use their output as a future growth engine. According to KT, if it pays NexR, a software company for a cloud based job analysis solution based on labor costs, it would be 1 billion won, but the price would double if paid according to value.
It doesn’t however, necessarily mean a loss for KT, according to Song. She explained that as KT will be buying more complete software packages, it would incur less costs later even with the system changes in this manner.
On top of that, KT will support software companies so that they can develop globally competitive software products. “We will continue providing them infrastructure, such as cloud computing. We will look for mergers and acquisitions with software companies that want to be sold, so that they can start another business with the money. This will inevitably attract more talented people to the industry,” the chairman said.
He added that software companies will accompany KT’s move to become a global company. “They will be aiming at the worldwide market, and develop software to fit global standards.”
Source:http://www.koreatimes.co.kr/www/news/biz/2011/09/123_95759.html
