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[Editorial] More Corporate Cooperation Needed

Posted October. 19, 2009 05:01,   


The Advanced Television Systems Committee, which oversees U.S. TV standards, chose last week mobile digital TV technology jointly developed by Korea’s Samsung Electronics and LG Electronics as a standard for mobile digital broadcasting. Americans will watch broadcasts on their cell phones, laptop computers, navigation devices and MP3 players using Samsung and LG technology. This is a splendid achievement by Korean companies, which have joined forces to pioneer the world market amid the global economic crisis.

Mobile digital TV technology allows consumers to watch TV broadcasts seamlessly while moving 290 kilometers per hour. Samsung and LG were initially competing to get their respective technologies approved as the digital broadcast standard in the U.S. They joined hands, however, to raise their chances of winning the bid and jointly developed the technology by combining each other’s technological strengths. The two companies are vying for the top position in the global digital TV market, and deserve a compliment in that they placed national interests above individual goals. Through such cooperation, Korea has gained the upper hand in the global mobile digital TV market, as it has in the mobile TV market.

Mobile digital TV broadcast devices sold in the U.S. must use transmission systems produced by either Samsung and LG or other companies under the licensing agreement with the two companies. Royalties earned by both companies are expected exceed 100 million dollars a year. Korean companies lag behind their counterparts in advanced economies in technology and capital, but they can raise their share of the global market with strenuous efforts and collaboration. Samsung and LG have set a prime example in this regard.

Korean companies in other industries should follow Samsung and LG’s lead by conducting closer collaboration. For instance, the electronic car and rechargeable car battery sectors should urgently cooperate to create technological standards to gain an early edge in the global market, which will see intense competition from next year.

Korea is at a disadvantage in natural resources, land size and population compared to its competitors. The country is also far behind in technological competitiveness, with the money it spends on tech imports more than twice what it earns from tech exports. Without strenuous efforts to develop technology and find new markets, Korean companies cannot overcome such obstacles. The country’s fate depends on if it can secure core technologies earlier than others. For its part, the government should provide a favorable business environment to allow companies to devote themselves to technology development by shielding them from temporary financial difficulty and hostile takeovers.