AI, energy drive Korea’s innovation strategy
Song Kyung-hee, director of the second economic division of the State Affairs Planning Committee, speaks during a policy briefing at Cheong Wa Dae in Seoul, Wednesday. Yonhap
Korea is seeking to position itself at the forefront of the global innovation race, unveiling a sweeping five-year economic strategy built on industries such as artificial intelligence (AI), biotechnology and clean energy to overcome its stagnation crisis and secure leadership in the high-tech sectors.
The State Affairs Planning Committee announced a five-year plan for President Lee Jae Myung’s administration Wednesday, consisting of three major governing principles, five main policy goals and 123 key national tasks, fiscal support plans and legislative initiatives.
“Korea’s growth engine is losing steam, putting the nation’s potential growth rate at risk of falling to zero. Capital remains heavily concentrated in real estate, holding back the broader economy. In this changed environment, we need to rebuild the framework for growth from the ground up,” Rep. Jung Tae-ho of the ruling Democratic Party of Korea said during a policy briefing at Cheong Wa Dae, the former official presidential office, in Seoul. Jung heads one of the committee’s two economy-related subcommittees.
“We will move swiftly to transform our society into one centered on AI, making Korea one of the world’s top three AI powerhouses.”
Under its economic goal among the five main policies, the government intends to build an “AI highway” across sectors and regions. It will rapidly expand access to high-performance computing infrastructure with more than 50,000 advanced graphics processing unit (GPU) chips and massive high-quality datasets.
This initiative comes in an effort to attract top-tier talent, develop AI-based industries, expand public data accessibility and transform Korea’s public services with AI-powered solutions in areas ranging from disaster response to legal and welfare services. A new national AI control tower will be set up to coordinate policies across ministries.
To ensure a long-term innovation strategy, the government will prioritize building future growth engines by maintaining a steady pipeline of science and technology talent, increasing annual venture investment to 40 trillion won ($28.9 billion) and nurturing an innovation ecosystem in five cutting-edge sectors: AI, biotechnology, cultural content, defense and aerospace, and clean energy.
To finance the shift, the administration is launching a 100 trillion won national fund targeting strategic industries, including semiconductors, AI, biotechnology and renewable energy. The fund will merge the existing 50 trillion won fund managed by the Korea Development Bank with private capital, creating a market-driven investment mechanism.
The fund will offer financing at interest rates comparable to government bonds to help identify and grow promising companies in key innovative industries. It will also be used to build infrastructure, including AI data centers and essential facilities.
Regarding sustainable energy, the government unveiled a plan for the “energy highway,” designed to drive both economic growth and carbon neutrality. The government aims to complete the national transmission network linking renewable projects to industrial hubs along the west coast by the 2030s and extend it nationwide by the 2040s.
The strategy also includes expanding offshore wind farms, solar installations and RE100-certified industrial zones, while modernizing grid systems with AI-driven energy management.