ED Becoming a top AI nation

President Lee Jae Myung leaves after a press conference to mark the first anniversary of his inauguration at Cheong Wa Dae in Seoul, Monday. AFP-Yonhap

Marking the start of his second year in office, President Lee Jae Myung put forth four major policy goals for an "irreplaceable Korea," including "making Korea a top competitor nation, leading in technology competitiveness, whose benefits are felt by all people." He said the government will soon announce related large-scale investment projects.

The government is set on further accelerating its competitive edge in artificial intelligence (AI) paradigm, in addition to the existing edge the country holds in the semiconductor sector, alleviating fears of being left out or behind in an AI-led economy. The goal is well-chosen, as the Lee administration now enters a period where the government can deliver tangible results.

In the president's nearly 170-minute-long press conference on Monday, Lee projected confidence as he laid out three other administrative goals. These include making Korea into a "strong diplomatic and security nation," "a society where norms and regulations are upheld" and a country where "the government protects the people's lives." Describing his first year in office as stabilizing the elected government, the task is now to become an innovative, pragmatic government that proactively adapts to change.

We hope his confidence is based on an accurate assessment of economic indicators. While change is necessary, reshaping Korea's powerhouse export industrial structure has been difficult both socially and economically. It involves managing the intricacies of labor relations and bringing both conglomerates and smaller enterprises together into an AI-led growth strategy.

In the past year, the Lee administration was able to ride out difficulties with the United States over tariffs and trade issues, as well as global uncertainties such as the U.S. war on Iran, while effectively boosting what he called "still devalued Korean bourses."

But recent economic indicators have been shakier than the past several months of the country's skyrocketing assets might otherwise indicate. The OECD recently put Korea's potential growth rate at 1.52 percent for 2027, dropping from 1.66 percent this year.

Korea currently has a record-high current account surplus, but is vulnerable to the "three highs" of high interest rates, high foreign exchange rates and high oil prices, with more uncertainty to come as the Bank of Korea has indicated it will raise rates in the future and no end in sight to conflicts in the Middle East. Korea's top companies such as Samsung and SK hynix are faring well despite recent volatility, lending support to Lee's plan. Korea must look for future growth engines, including AI and space sectors.

The president touched on the unfavorable foreign exchange rate, calling the recent weakness of the Korean won against the U.S. dollar a "temporary" phase tied to local bourses, which have been skyrocketing over the past several months. Not many may agree with that analysis, and the government must industriously manage the volatility of the foreign exchange rate.

For the work ahead, the government must carefully ponder issues like deregulation and figure out how to effectively tackle emerging labor issues, such as the recent strife over bonus payments at Samsung Electronics. The conflict was resolved but the problem of excess profit lingers. The president's prudent comment that profits should be invested for the future is something the companies and workers must consider, just as their global rivals like TSMC undoubtedly are.

As technology advances and global firms invest massive amounts of money for future growth, existing labor-management relations and practices should be reformed with a focus on future global competitiveness. Since the labor dispute at Samsung Electronics, industry watchers have called for a review of the "yellow envelope law," citing concerns over labor demands from thousands of subcontractor unions. With both the administration and the ruling Democratic Party of Korea intent on rapidly identifying Korea's growth engines, such calls should not be left unattended. There is ample room to forge agreements going forward.

Bipartisan consensus will be important. The president has noted "having the space to accommodate the opposition." Social consensus will be vital in implementing innovative pragmatism.