Recently, the government announced plans to further promote and improve the software industry. It is our wish that the plans will help the industry take an important position in leading the country to achieve GNP per capita of US$40,000. In order to do that, we need the expertise of existing software companies and foreign companies with successful accomplishments

The U.S. has established itself as a strong player in the industry with the help of companies like Microsoft and Google. Microsoft, which was established in the early 1980s, was able to grow and win over IBM with the innovative DOS in the Personal Computer market. Similarly, Google experienced an exponential growth with the keyword search market and online advertisement. Apple’s IPhone is also hugely popular with its innovative functions and applications. The lesson behind these success stories is the innovative and creative ideas.

It must be true, though, that the companies are backed with strong financial support and ideas to keep creating new business models for continuing growth. It is frankly impossible to become a leader in the global market without the large scale of business that backs up the business. From this perspective, perhaps our government’s policy to help out the smaller businesses in the software industry may not be the best case scenario in that the small companies are unable to grow the scale of businesses and such policy might even inhibit the growth of larger companies. The government needs to focus on globalizing a company with its support.

Another lesson learned from here is that a successful company was quick to expand its business through opportunities in the M&A market and focused on making their products the best in the world. Microsoft neither created or nor started selling first the Word, Excel and browser. Google also did not find the search engine market for the first time. Nevertheless, these companies were able to take the existing products and invent better business models to improve and globalize to fit the customers’ demands.

In 1982, Japan’s Ministry of International Trade and Industry initiated the Fifth Generation Computer System project (FGCS) to create a “fifth generation computer” to perform calculation and lead future developments on artificial intelligence. But it failed to create commercial products from the project. The participants in the software industry are faced with severe competition among each other and critical evaluation from customers. The R&D of software industry led by the government could prolong the life of an individual company, but may not result in the product development that reflects the accurate customer demand.

The innovative software company must first create products with new ideas, but the continuing growth must be backed by product quality that meets the global standard and customer’s taste. The resources must come from a global company with appropriate business scale.