FKCCI "Korea's AI Industry Infrastructure and Patents Excellent... Government Strategy and Workforce Acquisition Ranked Low"

[Asia Economy Reporter Ki-min Lee] While South Korea's artificial intelligence (AI) industry excels in infrastructure and patents, it lags behind in investment support, talent acquisition, and corporate policies, highlighting the need for improvement.

The Federation of Korean Industries (FKI) announced on the 15th that an analysis of the "Global AI Index," which compares AI levels by country, revealed that despite Korea's excellent ICT infrastructure, the growth of its AI industry remains slow.

According to the "Global AI Index" released by the World Economic Forum (WEF) in February, South Korea ranks 8th overall among 54 countries in terms of AI ecosystem level. However, when examining seven categories?talent, infrastructure, operational environment, research level, development, government strategy, and venture status?except for infrastructure and development, Korea's index scores are at a mid-level. In particular, talent, operational environment, government strategy, and venture status scored below average.

Despite the impact of the COVID-19 pandemic, the U.S. market research firm IDC recently projected that the global AI market size will reach $156.5 billion (approximately 186 trillion KRW) in 2020, a 12.3% increase from the previous year, and will exceed $300 billion (about 356 trillion KRW) by 2024. IDC also forecasted that China’s AI market will reach $11.9 billion (about 14 trillion KRW) in 2023, while Korea’s market is expected to grow to 640 billion KRW, only 4.5% of China’s scale.

◆Government Strategy for AI Industry Ranks 31st, Investment Plans: China Invests 17 Trillion KRW Over 3 Years vs. Korea’s 1.3 Trillion KRW Over 10 Years

The FKI cited insufficient government policy support as the reason for Korea’s slow AI industry growth. According to the Global AI Index, Korea ranks 31st out of 54 countries in the "government strategy" category, which refers to national-level investment support in AI, marking the lowest rank among the seven categories. Despite this, the Korean government’s investment strategy falls short compared to advanced countries.

Last year, Korea announced its "AI National Strategy," pledging to invest 1.3 trillion KRW over the next 10 years. In contrast, China had already committed 100 billion yuan (17 trillion KRW) over three years in its 2017 "Next Generation AI Development Plan."

Regarding the recent 5G industry promotion, the FKI pointed out that the Korean government’s planned investment of 30 trillion KRW in partnership with the private sector is very insufficient compared to China’s investment of 1.2 trillion yuan (208 trillion KRW).

◆Severe Shortage of Talent to Lead AI Industry... Among 24,000 World-Class AI Experts, Korea Has Only 405 (1.8%)

The FKI also highlighted a shortage of talent to drive Korea’s AI industry growth. In the Global AI Index, the talent category, which refers to professionals utilizing AI technology, scored 11.4 points?only one-tenth of the top-ranked United States.

According to the "Global AI Talent Report 2019," among 22,400 world-class AI experts in 2018, 10,295 (46.0%) were active in the U.S., 2,525 (11.3%) in China, while Korea had only 405 (1.8%).

The research level, which measures the quantity and citation impact of AI-related academic papers and publications, scored 22.4 points, ranking 22nd.

◆Business Environment Difficult for AI Ventures and Startups Due to Various New Industry Regulations... "Public and Private Sectors Must Work Together"

Lastly, Korea’s business environment, which makes it difficult for AI ventures and startups to grow due to new industry regulations, was identified as a problem.

According to the Global AI Index, Korea scored 47.1 points in the operational environment category?which reflects data utilization policies, visas for attracting foreign talent, administrative procedures, and regulatory environment?ranking 30th out of 54 countries.

Additionally, in the venture status category, which indicates startup scale and investment, Korea ranked 25th with a score of only 3.3 points, far below the U.S. which scored 100 points.

Kim Bong-man, Director of International Cooperation at the FKI, emphasized, “As the AI market growth and convergence with existing industries accelerate due to COVID-19, catching up with AI leaders like the U.S. and China requires securing talent?the source of technological competitiveness?along with rapid and strong deregulation and expanded investment and tax support.”

He added, “The public and private sectors must work together especially in new industries to achieve results. The government needs to actively support attracting foreign talent, corporate retraining, and industry-academia cooperation programs.”

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