Legal Issues for the Promotion of Knowledge-based Service Industries in Korea

This is the abstract of an article contained in Kyung Hee Law Journal, March 31, 2010, which has modified the original text written by the author for the 2010 White Paper on the Knowledge-based Service Industries in Korea.

When a number of retailers in the Asia-Pacific region gathered in Seoul in October 2009, their top priority interest was how to introduce and apply the information and communications technologies(ICTs) to their conventional business. Likewise, in the present information society, it is critically important to codify knowledge and transmit it through communication networks, and thereby to provide high-value knowledge-based services to customers.
Knowledge, skills and creativity equipped with the computer and Internet devices are the key to designing high value-added goods and services and advanced business practices.
Since 1990s, the OECD has found that the development disparity among its member states and less developed countries comes from the difference of ICTs, R&D innovation and skilled labor forces, and has held a series of global fora on sharing the know-how and experience on such issues.

Knowledge-based service industries consist of the businesses performing services by using ICT-related products and devices, pursuing R&D activities, or employing workers skilled at ICTs.
Though the definition of knowledge-based services may vary by state or region, it must include such basic elements as ICTs linked with specific knowledge, considerable amount of R&D investments, highly skilled laborers, and high-value products or services.

By analyzing the advanced economies, OECD has identified best practices for the knowledge-based economy in the field of science, technology and industry, and discussed noticeable trends, the role of the science system and the development of knowledge-based indicators and statistics. OECD has made suggestions to build up regional industrial clusters for balanced regional development.
These lessons should be learned by the less developed countries.
Furthermore, the government is responsible for cyber-security, authentication of electronic signature, protection of intellectual property rights, free access to government-held information.
Also the government should pay attention to expanding IT networking and training opportunities of the personnel of small and medium-sized enterprises to enhance their IT-related capacity.

This article explores, in particular, the legal aspects of knowledge-based service industries in Korea, putting aside the financial services which have taken quite different approaches.
First of all, the Government Organization Act, which set the cornerstone by establishing the Ministry of Knowledge Economy, and the framework of the Industrial Development Act should be mentioned.
The Industrial Development Act calls for national policy-making to prepare for the advent of knowledge-based economy and various policy measures for the industrial development towards knowledge-based economy. The Act has held the government liable to apply ICTs to conventional industries, and to promote R&D innovation, skilled labor forces, creative business model building, efficient outsourcing, and so forth.

Such individual acts as the Display Service Development Act, the Act on Industrial Design Promotion, the Software Industry Development Act, E-Learning Industry Development Act, the Distribution Industry Development Act, etc. are regarded as containing several elements of knowledge-based economy.

Legislation to promote knowledge-based economy should be centered on encouraging innovation, entrepreneurship, fair trade and competition, thus strengthening long-term infrastructure of overall business environment.
It is contrary to the conventional industrial development measures which usually focus on the specific industrial areas or special policy measures.
So to speak, desirable policy to enhance knowledge-based economy is like raining all over the forest rather than fertilizing individual trees.