Citing a report by the Korea Chamber of Commerce and Industry, an article in the Joongang Daily notes that the growth of South Korea's IT Sector has slowed noticeably since 2005. From 1989 until 2004 the sector grew at an annual average of 16.8 percent, but since 2005 the pace has fallen to the 4 to 7 percent range. The report attributed the slowdown to three widening gaps.
1. Between software and hardware. Between 2000 and 2008 the hardware industry recorded annual growth of 9.5 percent, while the software industry grew at an annual average of 7.5 percent.
2. Between finished goods and parts. The report noted that domestic production of key parts in the IT industry remains weak.
3. Between large and smaller companies. While the nation's 20 largest IT companies posted an 8.1 percent rise in average annual sales from 2000-2008, sales at smaller firms grew by just 4 percent annually.