**2. Digital Korea: Crisis as catalyst**

Considerable analysis across various disciplines has been dedicated to the extraordinary transformation of the Korean economy. This transformation has been noted as remarkable for both the speed and intensity with which the country evolved from an agrarian society with least-developed status to a highly developed global leader in manufacturing and high-tech industries [21]. While the 'Miracle on the Han River' that encompasses this growth refers to most of the latter half of the twentieth century, it is pertinent for this chapter's analysis to focus specifically on the period following the Asian Financial Crisis of 1997.

The Asian Financial Crisis can be understood as a critical juncture from which Korea collectively propelled itself towards a high-tech digital economy. The crisis itself and the widespread economic damage it caused exposed the vulnerabilities of South Korea's industrial export-oriented economy, highlighting the need for economic diversification and a future-oriented shift towards cutting edge technological industries. Responding to the crisis, government and industry elites had the foresight to recognize the importance of fostering innovation and technological advancement as a means of both recovery and longer-term sustainability [22]. This ultimately resulted in a wave of reforms and initiatives aimed towards a digital reorientation of the national economy [23].

The Korea Information Infrastructure (KII) project was launched in March 1995 by Kim Young Sam's government, which sought to transform Korea into a knowledgebased economy. Korea's status as a global trailblazer of digital growth and emerging technologies can be traced back to the early development of broadband, which was introduced to the country in June 1998. This enabled several telecommunications providers to revolutionize the country's digital landscape via the introduction of high-speed internet services [24]. By as early as the year 2000, Korea had achieved the astonishing feat of having the world's highest broadband penetration rate. The KII project played a crucial role in building a more advanced information technologybased economic model, which culminated in a network infrastructure that was the result of "collaboration among the industry, citizens, the market, and the government" [25]. See **Figure 2**.

Subsequent administrations, whether liberal or conservative, including the Kim Dae-jung government (1998–2003), the Roh Moo-hyun government (2003–2008), the Lee Myung-bak government (2008–2013), the Park Geun-hye government (2013– 2017), and the Moon Jae-in government (2017–2022) have continued to prioritize digital technologies as an integral engine for economic growth [20]. Policymakers have not shied away from bold decision making in this realm, as exemplified by the Lee Myungbak government's decision to terminate an analog TV system via the introduction of the digital TV system in 2012 [20]. The Creative Economy Initiative, launched in 2013, aimed to promote convergence between different industries while cultivating a culture of innovation [27]. Furthermore, the government has provided financial incentives for start-ups, facilitated access to funding and venture capital, and established research and development centers to support scientific research and collaboration between academia and industry. The government's Digital New Deal initiative, launched in 2020, has further accelerated digital transformation and stimulated investment in emerging technologies such as Artificial Intelligence and 5G connectivity [28].

Although the disproportionate power and influence of 'chaebols' (family-run business conglomerates) over Korea's economy and society have long been contentious

**Figure 2.** *Number of internet users in South Korea from 1999 to 2022 (in millions). Source: [26].*

issues [29], the close relationship between the government and chaebols has to an extent served to protect and advance the domestic IT market in the face of formidable competition from international competitors [20]. WIPI (Wireless Internet Platform for Interoperability) was a potent example of this protectionist state-led interventionism during the pre-smartphone era. This WIPI platform enabled phones to run applications, regardless of manufacturer or carrier. The specification that all mobile phones sold in the country include the platform constituted a legal and technical barrier for foreign makers to effectively penetrate the Korean market [20], thus bolstering the position of domestic manufacturers.
