"There Are Jobs in the Data Industry... Up to 200,000 Created Over 5 Years"

Labor Research Institute 'Impact of Data Economy Activation on Employment'
Rapid Growth of Data Industry... Demand Expected to Increase Due to COVID-19 Pandemic
"Government R&D Investment and Efforts to Foster Industrial Ecosystem Must Be Strengthened"

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[Asia Economy Reporter Kim Bo-kyung] Since the outbreak of the novel coronavirus disease (COVID-19), the demand for online and non-face-to-face services has increased, and the robot and artificial intelligence (AI) industries integrated with data are expected to grow rapidly. An analysis suggests that if the government's data economy activation policies are supported, it could create more than 200,000 new jobs over five years.

On the 29th, the Korea Labor Institute stated in its report titled "The Impact of Data Economy Activation on Employment" that "With the recent global COVID-19 pandemic normalizing non-face-to-face demand, a fundamental transformation of the economic and social structure is expected," and "This will serve as an opportunity for the robot and AI industries integrated with data to grow even faster."

As of last year, the size of South Korea's data industry was 9.2094 trillion KRW, and the total market size including indirect sales such as advertising revenue reached 16.87 trillion KRW. From 2015 to 2019, the data industry's average annual growth rate was 12.8%, showing a steep growth trend compared to other industries. The domestic big data market size has also rapidly grown at an average annual rate of 36%, reaching 896 billion KRW last year. The number of workers in data-related jobs is about 130,000, increasing at an average annual rate of 6.8% over the past five years. This is more than seven times higher than the total employment growth rate (0.9%) during the same period.

The growth of the data industry has essentially been driven by government investment and large corporations. The government announced a plan to activate the data and AI economy in January last year, and in January this year, the revised "Data 3 Act" passed the National Assembly, expanding the scope of personal information use and laying the foundation for data utilization activation. Public investment continued with recommendations for big data introduction and utilization in public institutions, and the establishment of financial big data platforms and AI-based chatbot services contributed to industrial development. As big data was introduced mainly in industries such as finance, healthcare, and manufacturing centered on large corporations, investment expansion has continued.

Assuming that data economy activation policies continue, an analysis of the employment ripple effect shows that a total of 102,000 to 203,000 new jobs will be created over five years from 2019 to 2023. On an annual average basis, this corresponds to about 20,000 to 41,000 jobs. This assumes that the big data utilization rate across all industries will increase from about 2.5% in 2018 to about 11.9% in 2023.

The Korea Labor Institute emphasized that to generate positive ripple effects of the data economy on the labor market, the big data utilization rate must be increased. This is because big data technology acts as a bridge for the data industry and data economy. The institute stated, "The development of the data industry acts as a catalyst for the development of other industries by allowing data to flow freely throughout the economy through increased big data utilization rates," and "It will ultimately create innovative businesses and services, resulting in direct and indirect employment effects."

However, there is still a long way to go. According to a 2018 report by the International Institute for Management Development in Switzerland, South Korea ranked 31st out of 63 countries in big data utilization. Although the Data 3 Act was passed, there remain issues such as unclear definitions of pseudonymous information and anonymized information, which are types of non-identifiable personal information, posing potential constraints on future big data utilization.

The Korea Labor Institute said, "Despite the high level of IT infrastructure, big data utilization remains at a mid-to-low global level due to strong regulations such as the Personal Information Protection Act," and added, "To activate the data industry, personal information protection should be strengthened while expanding the scope of data utilization by adjusting related laws and institutional regulations to a reasonable level." Furthermore, it suggested, "Efforts to expand the data industry should be strengthened not only in the private sector but also through government R&D investment and the creation of an industrial ecosystem," and "It is necessary to redeploy existing surplus labor into data specialists through job transition education and focus on nurturing core AI talent."

This content was produced with the assistance of AI translation services.