The Politics of Technological Upgrading in South Korea: How Government and Business Challenged the Might of Qualcomm

Abstract

How has industrial restructuring and technological upgrading in South Korea undertaken in the post-crisis era impacted on the state's capacity to guide strategic industry development? The latest reincarnation of the ‘end of the developmental state’ thesis proposes that industry policies are losing their strategic long-term oriented character due to the state's lack of legitimacy to play a guiding role after the economic recovery. I test this view in light of the Korean state's role, since the early 2000s, in the promotion of a new mobile communications software standard known as the Wireless Internet Platform for Interoperability (WIPI). I argue that the Korean state retains a strategic long-term approach to techno-industrial governance. The argument is developed through examining how bureaucratic actors gained the legitimacy to challenge Qualcomm, the strategy involved in promoting WIPI, and how the bureaucracy supported domestic firms under an increasingly open international trading environment. The findings reveal the state's ability to renew its legitimacy to play a developmental role through re-articulating policy goals from catching-up to nurturing innovation. Furthermore, the state has experimented with new forms of cooperation between government and business to nurture the growth of new infant technological growth sectors such as telecommunications.

Keywords:

• developmental state
• Korea
• industry policy
• WIPI
• Qualcomm
• WTO

Notes

The US government's support for Qualcomm is evident in its provision of defence contracts from the company's very inception (Mock 2005: 11–24), to its support for the recognition of Qualcomm's CDMA-based technologies in second and third generation technologies in international standards organisations such as the International Telecommunications Union (Glimstedt 2001: 68–72).

The fact that it was the MIC which had compiled these figures is revealing of a developmental orientation and reflects a long-standing practice in Northeast Asia of continuously checking the import profile of sectors to see what high value-added components can be produced locally. Such a practice is rarely, if ever, undertaken in more ‘liberal’ settings such as Australia.

Information available from: http://www.tta.or.kr/English/new/main/index.htm [Accessed 5 May 2008].

For instance, during the initial years of the Forum's activities, the President of the Korea Wireless Internet Standardization Forum, Han Ki-chul, was also the Senior Vice-President of ETRI at the time (Oh 2003: 32).

See: http://www.kwisforum.org/English/provision.html [Accessed 12 July 2007].

See: http://tta.or.kr/English/new/certification/ION/WIPI.htm [Accessed 8 May 2008].

This is the same agency charged with the task of monitoring the performance of companies that participated in Ministry-sponsored R&D funding projects in the past and has the power to penalise poorly performing companies (cf. Lee et al. 1996: 811).

For example, between 2003 and 2004, EXEmobile collaborated in various R&D activities coordinated by ETRI such as certification and testing toolkits for WIPI Version 2.0, which were later commercialised by Korea's three major carriers. See: http://www.exemobile.com/eng/com_his.html [Accessed 30 March 2008].

This includes Minister Chin Dae-je's meeting with Qualcomm's CEO, Irwin Jacobs, in May 2003 and February 2004 where on both occasions he requested the resolution of the dispute at an informal level (Yang 2003b; Korea Times 2004b). The WIPI mandate was a key issue during the Korea–US trade talks held in Washington, DC in October 2003 and February 2004 (Electronic Times (Korea) 2003; Kim 2004). Collin Powell, the US Secretary of State, also raised his government's opposition to the WIPI mandate during his meeting with the Korean Foreign Affairs Minister, Ban Ki-moon, in March 2004 (Chosun Ilbo 2004a).

The USTR, Robert Zoellick, also sent a letter to the Korean Minister for Trade, Hwang Doo-yun, stressing the importance of technology neutrality (Silva 2004). See also, the similar views of the American Electronics Association (2003: 1–4), the Telecommunication Industry Association (2003: 6), and USTR (2004: 317–18).

It is no mere coincidence that domestic companies began to offer their own smart phones and associated online application stores such as Samsung's ‘Omnia’ and SK Telecom's ‘T Store’ several months prior to the introduction of Apple's iPhone and ‘App Store’ (in November 2009) into the domestic market (Korea IT Times 2009; Telecoms Korea 2009).

According to some reports, the mandate did not achieve the levels of interoperability originally envisioned by the Ministry due to some technical differences in the versions of WIPI used by each carrier (Electronic Times (Korea) 2005b; Park 2006a: 53).

The OMA is composed of industry ‘heavyweights’ including handset manufacturers such as Nokia, Samsung, Texus Instruments, and Qualcomm, carriers such as NTT DoCoMo, Vodafone, and SK Telecom, and mobile solution developers such as Microsoft, Sun, IBM, and Symbian. See: http://www.openmobilealliance.org/AboutOMA/Default.aspx [Accessed 3 May 2008].

In June 2004, Korean carriers and six WIPI developers made a joint proposal for the ‘protocol data type of WIPI’ to be recognised as an international standard for mobile game technologies (Sung and Mun 2004).

In 2005, the WIPI platform was adopted by ‘Helio’ which was a joint-venture between SK Telecom and EarthLink in the USA. Using the WIPI platform developed by XCE and InnoAce which are the suppliers for SK Telecom's service in Korea, the deal provided the first export market for WIPI developers (Electronic Times (Korea) 2005a).

TBT is available from: http://www.wto.org/english/docs_e/legal_e/17-tbt.pdf [Accessed 17 January 2008].

For instance, in 2001, the US government invoked national security exemptions during the Anthrax attacks of 2001 (Bach et al. 2006: 511).

This case involved the Chinese state's attempt to impose a locally developed wireless encryption standard known as WAPI.