South Korea’s database industry last year posted KRW 11.65 trillion in sales, up 7.4% from a year earlier. In particular, the solution segment of the database industry witnessed the growth potential of homegrown DBMSs (database management systems), which took up 10.4% of the domestic market. Korean-made DBMSs are projected to continue its double digit growth to surpass the KRW 2 trillion mark in 2016. However, foreign companies taking the lion’s share (over 80%) of other key segments of the industry have been raising concerns over domestic solution vendors’ future prospects.
The National Information Society Agency (NIA)-led government efforts to nurture the ever-growing database business have been thus far as vague as the government-led employment generation project, launched in 1998 to offer public-sector jobs to low-income, unemployed people. Continually taking an aimless, scattershot approach toward the database industry, the government simply believed that something good would come out of building databases. People may think that simply ratcheting up the creation of databases would steel the nation for the expansion of the database industry. However, global trends in the database industry have already shifted to database analysis, i.e, “big data.” In a situation where S. Korea has yet to close the gap with database powerhouses in the world, the nation was ushered into an era of big data.
Despite changing global trends, the domestic database industry is the same today as it was two decades ago. The database industry of the past was solely centered on entering, deleting and retrieving data. The database industry of today is all about big data technology, designed to extract relevant data from databases and turn them into ‘knowledge.’ The knowledge obtained through big data technology can be analyzed and exploited to make a profit.
There are so many different ways to analyze and use vast amounts of data; the purpose of data use also varies. Hence various kinds of approaches to data are needed. In that sense, the term ‘database industry’ itself is too “old” because the database industry cannot keep up with growing demand for data utilization and analysis.
With the advent of the big data market, the S. Korean government has rolled up its sleeves to urge financial institutions, manufacturers and state-owned enterprises to embrace big data technology. In response to the government’s push for big data technology, global big data giants and consulting firms have paired up to take on the domestic market. They have already had big data analytics platforms under their belt. In response, domestic purveyors of database solutions have joined forces and developed a platform to counter foreign-made solutions. It is the government-wide big data platform, used by the Ministry of Security and Public Administration (MOSPA) of S. Korea.
MOSPA launched a pilot project to build a standard big data analytics platform, with a view to providing government officials with access to big data technology. And the pilot project was a success. The project offered insight into where the domestic big data industry should be headed; government agencies that dabbled in the government-wide big data analytics platform were motivated to capitalize on big data.
The US big data market cannot be overtaken.
“S. Korea cannot outstrip the US,” says Lee Young-sang, CEO of DataStreams Corp., a Korea-based data solutions provider which played a role in MOSPA’s government-wide big data analytics platform project by supplying its TeraStreamTMfor Hadoop. CEO Lee backs up his argument with the fact that the government-wide big data analytics platform project, albeit successful, was initiated by the S. Korean government. Bearing in mind the importance of data accumulation, big data powerhouses, represented by the US, have continued to accumulate data and frequently made investment in a voluntary manner.
US President Barack Obama’s use of big data technology as a means to getting closer to and communicating with American voters is a well-known big data success story. Having felt the need to tap into dataanalytics, the US continuously invested in data alignment and processing in a bid to nurture big data technology into an industry.
At a time when South Koreans feel no urgent need for big data technology and thus make no voluntary investments in big data technology, the government is consistently trying to bring attention to big data technology. I wish such government efforts could result in bring home to industry and academia the importance of big data technology and in investments gushing into big data technology. However, if the government’s chant of big data ends up ringing hollow to industry and academia, a problem will arise. The problem is that huge accumulations of data will be conveniently thrown away after being used. Measuring the value of data can be likened to appreciating the difference between one-year-old wine and 10-year-old wine.
The retention period of data dictates the value and power of the data. Since we lag far behind in terms of infrastructure, technology and investment, we cannot fare well once the big data era goes into full swing. The government’s efforts to give the nation a motivational boost should be followed by the private sector’s voluntary participation. Fortunately, a growing interest in the Internet of Things (IoT), a technology that connects devices to the Internet for business purposes, has thrown data back into the spotlight.
Ways to soup up the big data industry
DataStreams CEO Lee suggests ways to help the nation take the lead in the big data market and to galvanize the big data industry. First of all, he advises individuals or companies to take full advantage of government-led projects. Though the Park Geun-hye government has set forth the so-called Government 3.0, a new governance paradigm focused on wide-ranging data disclosures on areas that were previously off-limits to the public, it is unclear whether the government is simply paying lip service to transparency in government or it is really ready for scaled-up data disclosures. Therefore, we need to prepare the government for the implementation of Government 3.0. Preparing the government eventually means spending money on realigning huge accumulations of data. Since realigning vast accumulations of data costs a lot, the government has to invest in data management, which could give a much-needed impetus to the industry.
Second, fundamentally speaking, companies or individuals handling data should be able to make money using data. In other words, an environment where they can make money with data utilization should be created. A series of massive data leaks has recently hit the nation severely, consequently making people balk at utilizing data. Such an inclination to eschew data utilization is culling the database industry. As a matter of fact, the cyber security industry grows in inverse proportion to the data industry. The current government’s giving priority to data protection does the database industry no good.
For instance, EU nations and data leaders in the world have been collecting tremendous amounts of data on a daily basis across the board, from securities to weather information. Once data accumulate over a period of five or 10 years, they will be leveraged in making forecasts on where the global economy would be headed and will also serve as a yardstick in decision making processes. The data have-nots are no match for the data haves. The rivalry between those who bide their time in anticipation of upcoming trends and those in the dark about the future cannot exist. The data have-nots will always end up playing catch-up.
Therefore, the S. Korean government should wake up to the significance of the database industry and refrain from overly prioritizing cyber security, CEO Lee says. “I am not talking about going easy on cyber security breaches. I am taking about the importance of putting legal and institutional tools for data protection in place,” he elaborated. As a matter of fact, credit card companies have been no stranger to personal data leaks since they started issuing credit cards 20 years ago. The black market for stolen data was not created overnight; it existed then, too. If legal and institutions systems for data protection had been put in place back then, the black market for stolen data would not be this huge now. No matter how thoroughly you lock up your personal data, someone always finds a loophole if there is a great need for stolen data. Thus, legal and institutional reforms are required to step up the government’s crackdown on data leaks.
Third, fair trading and intellectual property rights are crucial to fostering the database industry. Those who have creative ideas are not recognized and often have their brilliant ideas stolen. And ideas thieves have no feelings of remorse or guilt after committing idea theft. Then, who would bother to come forward with their innovative ideas? Making business-to-business knowledge trading transparent and fair will lay the groundwork for taking the database industry to the next level.
A high premium should be placed on protecting intellectual property rights in order to create an enduring market. Then, knowledge accumulation should ensue based on the protection of intellectual property rights to enable data-based decision making processes and marketing activities. If things go down this path, the data industry will be put on the right track to growth. When individuals or companies packed with valuable knowledge and strong capabilities are distinguished from the rest and are paid for their competitive knowledge, an industry will be created that can make its presence felt in the global market.
Since laying the fundamentals of the database industry one by one could take 5-10 years, the issues of fair trading and intellectual property rights hardly catch the eye of politicians and bureaucrats, who want to impress the public with quick, noticeable achievements during their terms. If the nation failed to grasp what it has to do fundamentally for the advancement of the knowledge-based database industry, the S. Korean data industry would continue to tread water.