This paper aims at examining the disembodied technological progress in the Korean IT service industry, on the assumption that competition leads to the disembodied technological progress. Hobijn model (2000) which abstracts the disembodied technological progress from the total technological progress and Bai et al. Model (1998, 2003) which identifies time of the technological structural change are used for empirical study. The empirical analysis indicates the major structural change in the pattern of the disembodied technology progress occurred after 1995 in the Korean IT service industry. This means that policies for the introduction of competition system and the industry promotion around 1995 have a positive effect on the development of the Korean IT service industry.