"Overcoming COVID-19 Seems Key to Unlocking Everything"... 5 Major Trends to Shape the Year of Im In [Reading Science]

[Asia Economy Reporter Kim Bong-su] The year 2022, the Year of the Black Tiger, is expected to be a year of unprecedented volatility due to the ongoing COVID-19 pandemic, the full-scale onset of the 4th Industrial Revolution, and intensified global technological hegemony competition. As 'science and technology' have become sources of profit and drivers of economic and social change, let's take a look at the major technological issues and trends of this year.

◇ Uncertain Progression of the COVID-19 Pandemic

This year, the COVID-19 pandemic remains the top issue. Specifically, the pandemic has entered its fourth major wave phase with the widespread spread of the Omicron variant at the end of last year, and how it unfolds will be a key variable influencing the global economy and technology trends. Although uncertainty remains high at present, some analyses predict a 'normalization.' Despite the difficulties faced worldwide due to strengthened lockdowns caused by the Omicron variant's rapid spread at the beginning of the year, there is optimism that superiority in the war against COVID-19 can be secured through the development and expanded distribution of dedicated vaccines and treatments, as well as advances in quarantine technology. In particular, as the first quarter passes, there is a possibility that the virus's spread will weaken due to improved quarantine conditions from seasonal factors, the lower severity of the Omicron variant, and the development and wider distribution of vaccines and treatments. As of the 6th of this month, the global vaccination completion rate is gradually rising at 50.3%. Especially, hopes are rising that the pandemic will transition to an endemic phase due to the low toxicity of the Omicron variant, ushering in an era where humanity can live with and manage the coronavirus. However, the emergence of new variants and disparities in vaccine distribution among countries still raise the possibility that the pandemic will continue.

Due to the spread of the COVID-19 Omicron variant, the number of new confirmed cases exceeded 10,000 for the first time on the 26th, and citizens are visiting a temporary screening clinic set up at Seoul Station Plaza. Photo by Mun Ho-nam munonam@

◇ De-globalization and Restructuring of Global Supply Chains

The pandemic-induced supply chain disruptions and the US-China technological hegemony competition are accelerating de-globalization trends. However, there are also opinions that a new order may emerge. After the 2020 pandemic outbreak, as countries imposed lockdowns, distrust in 'globalization' expanded, causing severe supply chain disruptions and transportation delays, making the restructuring of global supply chains inevitable. Furthermore, amid the global hegemony competition between the US and China that goes beyond simple trade conflicts, the issue of China's responsibility for the COVID-19 outbreak has surfaced, accelerating 'de-Chinafication.' Just as the US has been determined to attract semiconductor factories domestically, countries worldwide are turning toward self-sufficiency and focusing on reshoring, bringing back domestic manufacturing companies that had expanded overseas. Additionally, supply chains are being reorganized to strengthen alliances and regional centers. As conflicts between the US and China diversify and prolong, the burden on countries highly economically dependent on both is increasing, raising the possibility of a new Cold War era.

In 2019, our economy is passing through a dark tunnel. It was shaken by Japan's export restrictions, and the harsh winds of the US-China trade war blew fiercely. Although the end of this tunnel is unknown, efforts to find light and hope must continue. At the Ulsan Asan-ro pier, where streetlights continuously shine along the dock, export Hyundai vehicles are being loaded onto a ship.
/Ulsan=Photo by Kang Jin-hyung aymsdream@

◇ ESG Management and Digital Transformation

Globally, 'ESG (Environmental, Social, and Governance) management' has become a survival strategy for companies. In particular, digital transformation has established itself as a solution for ESG management. ESG management means enhancing environmental and social roles, transparency, and ethics in governance. It goes beyond traditional Corporate Social Responsibility (CSR) to require management that considers consumers, shareholders, communities, and the environment comprehensively. Unlike traditional methods that judged only financial performance, non-financial factors such as environment, society, and governance, which affect corporate value and sustainability from a long-term perspective, have become important criteria for corporate evaluation. Riding this trend, investment in ESG-related areas has rapidly increased worldwide, surging from $10.3 trillion in 2016 to $17.5 trillion in 2018. Meanwhile, 'digitalization' has emerged as a key means to implement ESG management strategies. Representative examples include Google's 'Advancing AI for Everyone,' Starbucks' blockchain-based 'Bean to Cup,' and Microsoft's eco-friendly data center construction project 'Project Natick.'

◇ Climate Change and the Carbon Neutral Era

As climate change intensifies, various disasters are striking humanity. According to the World Meteorological Organization (WMO), more than 11,000 people worldwide died from heatwave damage between 2015 and 2019, and economic losses from natural disasters such as hurricanes and wildfires are rapidly increasing. Major countries worldwide are pushing for international agreements to address this while simultaneously working to reduce carbon emissions. South Korea also suffered losses exceeding 1.25 trillion won due to unusual heavy rains in the summer of 2020, reflecting the growing damage caused by erratic climate conditions. Recently, the IPCC recommended that to minimize climate change by limiting the global average temperature rise to within 1.5 degrees Celsius compared to pre-industrial levels, carbon dioxide emissions must be reduced by at least 45% within the next decade (compared to 2020). Accordingly, investments in eco-friendly energy sources such as wind, geothermal, solar, biomass, and hydrogen are surging worldwide. In particular, biomass, hydrogen infrastructure and manufacturing, and carbon capture, utilization, and storage (CCUS) technologies are emerging as new industries in the carbon-neutral era, with fierce competition in technology development and investment to secure market leadership.

◇ Virtual Reality and Virtual Assets

Interest in the metaverse has surged recently, and it is rapidly growing in combination with Non-Fungible Tokens (NFTs). The metaverse uses 3D technology online to create three-dimensional spaces such as schools, companies, concert halls, and parks where many people gather, allowing social activities through avatars. The metaverse is expanding into various fields such as marketing, real estate and construction, and corporate operations. The metaverse market is projected to reach $1.5 trillion by 2030, accounting for 1.81% of the global GDP. Additionally, NFTs, a new technology that promotes digital assetization, are rapidly growing as virtual economies become active through the metaverse. NFTs use blockchain technology to store ownership and transaction records of digital files, enabling digital creations to be commercialized and sold for cryptocurrencies or other compensation, generating revenue or reinvestment in other creative activities. NFT issuance is active on metaverse platforms. In the first half of last year, NFT transaction volume totaled $1.26 billion, a fourfold increase compared to the previous year's cumulative transaction volume.

On the 16th, visitors attending the 'K-Metaverse Expo 2021' held at COEX in Gangnam-gu, Seoul, are experiencing the metaverse. Photo by Jinhyung Kang aymsdream@

◇ Data Economy and Cybersecurity

With the acceleration of digital transformation, cybersecurity faces significant threats, and there is an urgent need to establish governance for the data economy era. The digital transformation has increased the value of data, creating new business models and industrial environments utilizing data. The data market is where raw data is refined and digital data is exchanged as 'products' or 'services.' At the same time, the acceleration of digital transformation, growth of the data economy, and the spread of remote work have increased vulnerability to cyberterrorism. Global cybercrime costs are expected to increase by 15% annually over the next five years, rising from $3 trillion in 2015 to $10.5 trillion by 2025. This includes data damage and destruction, theft, productivity loss, intellectual property theft, personal and financial data theft, embezzlement, fraud, post-attack business interruption, forensic investigations, restoration and deletion of hacked data and systems, and reputation damage. Accordingly, the cybersecurity market is expected to exceed $1 trillion cumulatively in 2021, following $3.5 billion in 2004 and $120 billion in 2017.

To address this, it is pointed out that governance must be established through domestic and international frameworks concerning data policies, systems, security, and competition. In other words, the most important aspect in the data economy era is security, especially safely protecting personal information and preventing misuse by authorized data users.

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