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Summary:

South Korea’s ability to use government funds to boost the country’s broadband industries has long been hailed as a savvy move that reinvented South Korean industry and identity as a country. Now the country that led the broadband revolution is looking to create a new market […]

South Korea’s ability to use government funds to boost the country’s broadband industries has long been hailed as a savvy move that reinvented South Korean industry and identity as a country. Now the country that led the broadband revolution is looking to create a new market for smart grid technology, and lucky for us, is planning to share its best practices. This morning U.S. smart grid trade group the GridWise Alliance and the Korea Smart Grid Association (KGSA) have teamed up to share intelligence about building out smart grid technology.

The partnership raises a question in my mind: What lessons can companies and policy makers take from South Korea’s government-led broadband build-out and apply to the development of the smart grid in the U.S.? The rollout of broadband and cellular infrastructure is clearly different than building out the smart grid, but when companies and organizations are developing, testing and deploying network infrastructure, spurred by government funds, there are notable similarities. Here are a few:

How to Create Intellectual Property: The South Korean government invested heavily in domestic information technology R&D so that Korean companies could develop intellectual property. The idea was to help the country develop into more than a low-cost manufacturing hub for other countries’ technologies. In the U.S. today the stimulus bill is investing in industries across the board, but almost $4 billion of the funds are being invested in smart grid technologies. How effective the funds are at spurring a U.S.-based smart grid industry for the long term will partly depend on how well the funds will help U.S. companies develop smart grid-based intellectual property.

Because the stimulus funds are largely being used for “shovel-ready” — job creating — smart grid deployments, it could end up stimulating the deployment of less-than-advanced technology. We would be encouraged to see technology vendors also use the funds to continue to create best-of-breed technology and help usher along the development of strong intellectual property.

Find a Good Test Bed of Consumers: South Korea famously built out broadband infrastructure and used early adopter consumers as testers of early broadband-based technology like cell phone applications and social networks. Utilities and companies across the U.S. (and in Korea) are now looking into launching trials to discover what consumer-facing energy management applications would be best to engage consumers and help them change their energy consumption behavior.

South Korea’s consumer broadband test bed works to create advanced and popular technology for Korean firms because users are connected to the network in their daily lives and can easily test out how they would use the broadband tools on a daily, consistent basis. Utilities testing out energy management tools will clearly have a more controlled environment but need to use the power of the network (which not all U.S. utilities plan to do), need to be able to be integrated into daily life, and need to engage consumers.

The Growth of an Industry Can Do More Than Create Wealth: South Korea’s creation of its broadband infrastructure and industry led to the development of South Korea’s identity as a tech-savvy leader in the global information technology world. Prior to that, the country’s tech industries were often seen as lower-cost manufacturers of tech goods. The change in identity can be seen in contemporary Korean culture, like Korean movies that portray the image of Korean youth as the connected early adopter.

While the smart grid will likely be less revolutionary than broadband in terms of national identity, if it’s implemented and marketed well enough, it could do a lot more than create wealth and jobs in both Korea and the U.S. If consumers are engaged to change their behavior — and even use social networks to share and compare energy consumption data — it could be a source of pride and identity. If U.S. cities are particularly aggressive, it could be a source of pride that’s connected to a domestic movement.

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  1. Before we go asking South Korea for advice on how to do a technology rollout, let’s look more closely at what they’ve done since the broadband rollout of the late 1990’s. They tried to do the same thing with WiBro–an only in Korea wireless broadband standard that has been an overwhelming flop. It’s rarely used in Korea and no other countries have adopted the standard. Then they spent billions on rolling out digital mobile broadband (DMB), otherwise known as “television for your cellphone”. That has flopped too–only a few thousand people are willing to pay to watch TV on their handsets. The broadband rollout was a case of all the stars aligning–it worked once and worked spectacularly well. It shouldn’t be used as a model for anything, anywhere. It requires, in teh best case, government bureaucrats picking winning technologies. In the worst case, politicians do the picking. Either way, it takes away from the market’s ability to choose.

  2. Katie Fehrenbacher Monday, June 15, 2009

    Thanks Sam, good points. It would be interesting to look at why specifically WiBro and DMB havent (yet?) been successful and perhaps there’s also lessons there for a smart grid infrastructure rollout.

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  4. WiBro is widening its market share by new marketing campaign which combines broadband, iptv, mobile, landline as a package so that people can be connected everywhere they go.

    DMB? Try to come to Korea and ride any type of public transportation, you can easily find people watching TV in their mobile phones or PMPs and even navigation device in a car.

    Come and see.

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