[Inside Chodong] Regulatory Innovation Is Important, but the SW Ecosystem Must Come First

[Asia Economy Reporter Lim Hye-seon] As the government gradually loosens the restrictions of the 'Software (SW) Promotion Act,' which had been tightly locked for 10 years for large corporations, the small and medium IT industry is collectively protesting.

The Ministry of Science and ICT clarified through a public notice that in public software projects, when SW projects and other projects are separately commissioned or commissioned under a shared execution method, the restriction on large corporations' participation does not apply to the non-SW projects. For the past decade, large corporations were completely blocked from participating if there was even a partial SW project, but now a path has opened for large corporations to participate. Small and medium IT companies unanimously say that this revision of the notice by the Ministry of Science and ICT is "a preliminary step toward effectively abolishing the SW Promotion Act." They argue that because separate commissioning based on the arbitrary standards of the ordering institutions allows unrestricted participation by large corporations, this measure could severely undermine the legislative intent of the SW Promotion Act, which is to protect and nurture small and medium SW companies.

However, there have been continuous criticisms that restricting large corporations' participation even in other projects with little direct relation to SW projects, such as equipment installation and network construction, constitutes excessive discriminatory regulation. It is also evaluated that technological competitiveness has regressed. In the UN's e-government evaluation rankings, Korea maintained first place but dropped to third after 2016. Whenever a system outage occurred due to a sudden influx of users, the government turned to large corporations. During emergencies such as EBS online class connection failures and the COVID-19 vaccine reservation system crash, the government deployed large corporations to resolve the issues.

The Yoon Seok-yeol administration is advocating regulatory innovation to realize a digital platform government. The 'restriction on large corporations' participation in public SW projects' was cited as a representative example of unreasonable discriminatory regulation in the economic policy direction announced last June. Change is necessary. It is clear that with the current IT capabilities of small and medium enterprises, it is difficult to perfectly implement a 'digital platform government.' However, it is necessary to clearly define the limits of what will be allowed. In the SW industry ecosystem, large corporations, small and medium enterprises, and solution companies each have their roles. Policies that threaten the survival of small and medium enterprises should be avoided. Now is the time for 'united cooperation (齊心合力),' not 'competition.' For creating a mutually beneficial ecosystem between large and small-medium SW companies, clear judgment from the government is needed.

This content was produced with the assistance of AI translation services.