Korean firms urged to overhaul business models

2013-05-30 21:59

Korean firms urged to overhaul business models

By Park Ji-won

A global IT expert has called for major Korean technology giants, such as Samsung and LG, to reinvent themselves as software-centered companies to survive an ongoing transition in the IT industry led by two key trends ― integration and convergence.

In a recent interview with The Korea Times, Wilbert Charlton Adams, former president of the Institute of Electrical and Electronics Engineers Standard Association (IEEE-SA), suggested Korean players overhaul their business models to become more agile.
IEEE is the world’s largest professional association dedicated to advancing technological innovation. IEEE-SA is is an organization within IEEE that develops global standards for a broad range of industries, including information technology and telecommunications.

“The profitability of the hardware that they would sell was becoming less and less. The time to get a product to market were becoming shorter,” said Adams, who led the institute from 2009 to 2010.

“So pursuing hardware in the IT industry became a not economical business model. So the IT industry started to focus more on a solution-driven market, software,” he added.

“The power is going to move into the software area. That’s what’s driving a new area of development.”

He said software will become more important as all home appliances, including refrigerators, are going to be intelligent models in the future. He is now a strategist at Huawei Technologies, a Chinese multinational networking and telecommunications equipment and services company, at its U.S. branch.

Adams, who has worked in the IT industry for more than 40 years, said Korean IT companies should be well aware of ongoing transitions in the industry and make themselves ready for more integration and convergence.

“There are a lot of transitions underway in the IT and communications industry. IT and communications technology sectors will become ever more integrated,” he said.

“The Korean IT industry will become ever more integrated. Technologies are already starting to blur. Each industry is going to bring its skills to the table, but 9the future is going to be the integration of these technologies.”

Adams, who recently visited Seoul to participate in the annual IEEE-SA meeting, said Korean firms should make more effort to be leaders in the technologies they are promoting, by sharing compatible standards across technologies.

“Basically, standards in business are taking and moving technology so that you can move it into the market place. Today’s industry wants products to move quickly into the market place,” he said.

“The other thing that standards provide is to allow the industry to leverage resources about companies.”

He said Korea is promoting IT technologies, 3D imaging and advanced graphics and should seek ways to put those technologies together so markets and products can be developed more quickly.

Adams, who set up an agreement with the Korea Electronics Association and Telecommunications Technology Association while he was president of IEEE-SA, said Korea is a very important market for IEEE because the country is a technology leader.

“For example, in the heavy industry area, Korea was involved in IEEE’s smart grid activities. More than half of energy consumed in Korea comes from nuclear power. So they do a lot of activities, basically transitioning the standards in nuclear power from analogue to digital,” he said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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