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Seongnam forges ahead with IT hub vision

Posted: 02 Jan 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Seongnam IT hub vision? South Korea IT company?

Kim: Firms have transformed this Seoul City-neighbor into a venture valley.

Seongnam City's battle cry says it all. Punctuated with great fervor, "Mobile City! Seongnam" envisions the South Korean city as the country's IT hub by 2030.

Even this early though, Seongnam is making great strides in fulfilling its vision as a swarm of companies, a big number of them into IT, has transformed this Seoul City-neighbor into a venture valley. Out of the 250 SoC firms in South Korea, 75 are based in Seongnam, and this number is expected to increase with the 2009 opening of Pangyo, an area that will alleviate the excessive demand for apartments in Gangnam, Seoul and Bundang.

Among the firms located in Seongnam, 40 percent are IT-related. As for startups, which include those engaged in broadcasting communications, electrical/electronics, information communications and semiconductor, 60 percent relate to the IT sector. Meanwhile, key IT players such as KT, SK Telecom, SK C&C, Postdata and NHN, and a number of small- and medium-sized venture companies have put down roots in Seongnam. R&D centers, government agencies and key infrastructures that will further boost entrepreneurial activities in the city have also taken up space in Seongnam.

Three strategies
Tasked to work on the city vision is the Seongnam Industry Promotion Foundation (SNIP). The foundation's goal is to create in Seongnam an integrated cluster for the latest industries by giving full support to IT companies. Says Kim Bong-Han, SNIP president and CEO, "Three requirements are needed to attain this goal: establishing industry production systems and science technology systems; building a university R&D center; and setting up a government agency to fully support the companies." And the biggest obstacle to establishing an integrated cluster, remarks Kim is "a lack of governance capability."

"We are looking at various ways to play this role."

Meanwhile, SNIP has started its "Global Star Company" program for promising companies. This program, which has allocated 900 million won (about $1 million) to selected companies for the past three years, aims to provide various business support services in the marketing, technology development, education and financial realms.

Regional cooperation
Seongnam is also working with neighboring areas on several development programs. Seongnam will play a key role in strategic businesses such as next-generation mobile communications and IT SoCs, while adjacent districts will focus on manufacturing.

"Seongnam is closely involved with other regions such as Ahnyang, Youngin and Suwon as an IT-belt zone," explains Kim. "For example, Seongnam would first lay the software foundationAhnyang, Youngin, Suwon could add hardware support next. This means if the area southeast of Seoul develops as an IT-belt zone, then development could move southward to Cheoan and Daeduk.

"However, before expanding the plan nationwide, we must first realize Seongnam's vision as an IT hub. We will focus on four strategic businesses: IT SoCs and components, next-generation mobile communications, medical bio industry and digital contents"

Meanwhile, Seongnam's digital content industry is doing good business. In 2006, the revenue of the digital content industry in Gyeonggi-do totaled 1,330 billion won (about $1.5 million), and 77 percent was contributed from Seongnam enterprises. SNIP and the Gyeonggi Digital Contents Agency are working together to promote the sector.

Plans also call for the establishment of technology parks such as Bundang's Techno Park in Dongwon-dong. In Bundang, around 10 digital content companies including NHN and JC Entertainment Corp. are doing business. Major gaming companies such as NCsoft Corp., Neowiz Corp. and Nexon Corp. are expected to locate in Pangyo in 2009.

To realize its IT hub vision, Seongnam needs to raise funds, around 10-13 billion won (about $11-14 million) every year over the next 10 to 15 years. In 2002, SNIP established a 10 billion won venture fund that helped carry out projects for the last couple of years. One of the recipients of the first wave of funding was FCI, a Korean CDMA and DMB RF chip developer that got 2 billion won.

SNIP is now looking into creating a venture fund worth 23 billion that will last for the next seven-year cycle. Also by 2030, Seongnam is anticipating 710,000m2 of space that will serve companies that will locate in the city.

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