ABSTRACT
The ICT industry can be categorized into hardware-based manufacturing businesses and knowledge-based software businesses. The software industry, which does not require sophisticated manufacturing facilities, crucially depends on the presence and role of skilled labour and thus the level of their technical capabilities should be at the core of the asset value of the industry’s companies. When deciding on their location, software firms take the following factors
into careful consideration: municipal service support, industry-academy cooperation, governmental support and overall cooperation environment. In the early years of the South Korean software industry, many companies did show clustered spatial distribution in either the Kangnam area, where they can enjoy relatively cheaper rents, or in downtown Chunggu and Yeudo, where outstanding backward and forward linkages can be provided. However, the internal and external environments of companies have influenced aspects of the location of software firms: the former might include differences among firms’ innovation capacity and the related differences in their sizes, whereas the latter can be exemplified by easier accessibility of information due to the expanding broadband, increasing rent, deteriorating environments like traffic jams and the governmental policies supporting industrial clusters. The concept of innovation systems has been an issue in strategic policies to
secure high-tech industry competitiveness in the global knowledge-based economy. The main participants in an innovation system, including companies, colleges, research institutes, public organizations and the government, establish a variety of networks for innovative technology in order to create new values that can facilitate economic growth. The growing importance of interactions involving knowledge sharing
through networks in this fierce competition has led companies to prefer to be located in a clustered region where more efficient cooperation can be easily available. Thus, research into the structure of partnership networks based on a variety of social relations and their locational features should shed new light on the nature of the software industry.
