B2G (Business-to-Government) Market Gaining Momentum in Korea's IT Service Industry

The once-overlooked B2G (Business-to-Government) market, due to low profitability and complicated procedures, is now gaining traction in South Korea's IT service industry. This shift is attributed to the accelerated digital transformation, the effectiveness of service validation based on improved technology reliability, and the need for public sector references for global expansion.

According to a report by Metro Economic News on the 11th, major IT service companies such as Samsung SDS, LG CNS, SK C&C, and CJ OliveNetworks are ramping up their efforts to target the B2G market.

Samsung SDS is increasing its involvement in B2G projects in line with the government's "Digital Platform Government" policy. The digital platform government aims to address social issues and create new value by connecting all data in a digital platform, where citizens, businesses, and the government collaborate.

The Ministry of Science and ICT and the Ministry of the Interior and Safety are pushing forward the adoption of generative AI and the transition to cloud-native systems as part of the digital platform government initiative. As cloud and AI technologies become crucial for nationwide services, Samsung SDS, the leading IT service company in Korea, is expanding its influence in the public sector market.

Samsung SDS, a private cloud service provider at the National Information Resources Management Agency’s Daegu center, has secured a foundation for hosting key public institution information systems securely. Additionally, by preparing for business in areas requiring new technologies like generative AI, co-pilot systems, and data platforms, Samsung SDS successfully won contracts in the first quarter for the National Assembly's AI big data platform construction and the Ministry of the Interior and Safety’s next-generation local administrative common system (ISMP).

Lee Se-geon, Samsung SDS's Executive, stated, "Through participation in public sector projects, we aim to secure successful examples of generative AI and position ourselves as a key player in the government's push for intelligent digital platforms." He added, "The government has created a framework for large corporations to participate in public projects, and the environment is shifting to favor businesses with technological capabilities. Samsung SDS will expand its business with differentiated competitiveness."

LG CNS is accelerating its entry into overseas B2G markets, leveraging its experience in domestic public sector projects.

Recently, LG CNS signed a contract with the New York City Economic Development Corporation for a pilot project involving the installation of electric vehicle (EV) charging stations and a control system. As part of the project, LG CNS will set up EV chargers, related facilities, a maintenance control system, and an app for charging station usage at the Brooklyn Army Terminal, an industrial complex in New York.

Additionally, LG CNS has partnered with the city government of Hogansville, Georgia, to implement a smart streetlight and control system. The project aims to install smart streetlights, integrated with smart city and IoT technologies, in the downtown and park areas of Hogansville.

Kim Min-seop, Team Leader at LG CNS, stated, "Building on our business references with the Korean government and public institutions, we are now working on various projects with the U.S. government and public institutions. These projects will help us strengthen our position in the U.S. public sector market."

CJ OliveNetworks is expanding its B2G operations as part of its business diversification strategy. The company is pursuing smart city projects (Sejong National Pilot City, Cheonan-based smart city) and smart education projects (EdTech), while also expanding its portfolio into smart finance and smart transportation.

SK C&C is also showing interest in government contracts. An SK C&C representative commented, "For public sector projects, we first check if large corporations are eligible to participate, and if the project meets our criteria, we actively engage."

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