A Study on ESG Evaluation Factors of Social Enterprises: Based on K-ESG
Authors:   The Korean-Japanese Economics & Management Association, Choe Jong-Il 
Published: September 2022

Purpose: In order to take into account the importance of the IT services industry related to the 4th industrialrevolution and to supplement the limitations of the export/import analysis based on gross export statistics, weattempted to analyze the status and features of the value-added export network of IT services industry. Through thetrade network analysis, we suggest the necessity of policies to foster the IT service industry and provide policyrecommendations for industrial development.
Research design, data, and methodology: This study uses the 2005 and 2014 World Input-Output Table (WIOT) todecompose gross exports into value-added exports according to gross exports decomposition methodology. We thenobtain the world trade matrix based on the domestic value-added statistics. By applying network analysismethodology to the world trade matrix, the characteristics and changes of the global value-added trade in IT servicesindustry were identified through centrality analysis and core-periphery analysis. In addition, this study identified thestatus of Korea and Japan’s IT services industry in the world value-added trade network.
Results: The countries with the greatest influence in terms of domestic value-added exports in the IT services industryare the European Union (EU), the United States (USA), the United Kingdom (GBR), Canada (CAN), and India (IND). Incontrast to the IT manufacturing industry, where Korea, Japan, and China were among the core countries, Korea,Japan, and China were not among the core countries and remain as peripheral countries in the IT services industry. The ratio of domestic value-added exports to gross exports in Korea’s IT services industry is lower than that of theEU, USA, Japan, and China, and the ratio of foreign value-added exports to gross exports is higher than that of theUSA, Japan, and China. This fact can be seen as a structure in which Korea’s IT services firms import and inputintermediate goods from abroad and then export the processed final goods to the global market.
Implications: Since the early 2,000s, Korea’s IT industry’s production and exports have grown significantly in volume, and its influence has been greatly strengthened in the global IT market. However, the strengthening of Korea’s influence on the global trade in the IT industry is mainly due to the growth of IT manufacturing industry, and the competitiveness imbalance between IT manufacturing and IT services industry is very severe. Therefore, it is necessary to take measures to strengthen the competitiveness of Korea’s IT services industry. First, it is necessary to overcome the foreign value-added import - processing production structure and strengthen value-added production capacity by investing in the improvement of human capital and technology in the IT services and software fields. Second, it is necessary to promote the globalization of firms through export support measures for the IT services industry. In fact, while major Korean firms have IT services affiliates, the sales of these affiliates are stable, and there is no incentive for overseas expansion. Export incentives for IT services firms should be developed to stimulate their overseas expansion.