Korea to follow US, China in AI development

By Kim Yoo-chul

Artificial intelligence (AI) could significantly improve the economy and people’s everyday lives. But analysts point out that the world has to make sure it benefits everyone.

A recent White House report said greater deployment of AI and automation could boost economic growth by creating new jobs and improve efficiency in a lot of sectors.

The adoption of AI is controversial in many respects. Some pessimists pick “income inequality” as the biggest potential downside of AI. Others talk about sharp divisions between those who benefit from the technology and those who don’t.

But in general, thoughts are that AI has great potential to become a new growth driver for Korea.

Korea’s economic growth mainly owes much to the skilled workforce that the country has nurtured over the last few decades. But the available labor force is set to decline gradually in the future.

At the same time, Korea still lacks resources in key areas such as healthcare, and there is a large gap between rural and urban areas.

In order to drive sustainable growth and efficiency gains, AI could become critical, observers said.

By acting like a capital-labor hybrid, AI offers the potential to amplify the current capacity of capital and labor and propel economic growth, Accenture Consulting said in its latest analysis to clients.

One interesting finding by the consulting firm is that AI could double the annual economic growth rate in Finland and Sweden by 2035.

Accenture said by changing the nature of work as well as shifting the relationship between humans and machines, the labor productivity in those two European countries could increase by 36 percent and 37 percent, respectively.

But the global consultancy didn’t include Korea in its analysis.

How big is the impact?

The key question is how can AI help people and how big the impact would be?

“AI applications can revolutionize business in ways not seen since the information technology breakthrough. Even now AI, cloud computing, advanced analytics, and other technologies impact on the work of people and machines,” Tomas Nystrom, Accenture’s chief technology officer, said.

Economists have no big questions about the view by the executive saying AI helps by increasing both production and consumption. Production improvements can take place through helping people do things more efficiently and doing what people cannot do today.

Stimulating consumption through customized offerings increases the contribution of consumption to gross domestic product (GDP), said Bernstein Research, a leading market research firm, in its latest report to clients.

According to analysts, Korea has the potential to be a leader in AI. While the East Asian country is a latecomer in AI, deep learning puts Korea and other countries on a level field, as it turns AI from hand-coding algorithms to training using data.

On top of that, Korea has been creative in application and user adoption has been increasing, while acceptance is high.

“In the face of rising urbanization, an aging populace, and increased demand for better education and healthcare, Korea will need to squeeze out as much efficiency as possible to maintain an upward trajectory in the quality of life of its people. AI is here to help,” an industry official said.

The Korean government plans to bring forth a “Comprehensive Strategy for AI Information Society.” Under the blueprint, Seoul will provide in-depth analysis of the transformations brought by the technological progress.

The government will then draw its policy vision to address complex issues arising from the automated economy enabled by AI technologies.

This is more about the country’s ambition to create an “AI information society,” a future envisioned by the risks and chances brought about by the infiltration of automated machines and computers at all levels of the economy, the government said.

AI can provide more personalized and targeted offerings to find out what end users really want, or what is most helpful to the end user. Social media already does this for e-commerce and targeted advertising, but better AI should improve on this and would have even broader implications than just shopping on an app.

“By identifying what people want, AI can help stimulate consumption and transform the economy to become increasingly reliant on services and consumption,” Shinhan Investment analyst Lee Moon-jong said.