By Chyung Eun-ju and Joel Cho
Although established Korean conglomerates such as Kakao, Samsung, SK and LG have demonstrated high interest in the artificial intelligence (AI) sector, the national AI market is still not on par with leading countries like Japan, China and the United States. In contrast, however, Korea has become renowned for its information and communications technology (ICT) sector, being at the center of innovation in this field.
In this sense, it is important to highlight the crucial role played by the Korean government along with its family-run conglomerates ― also known as chaebol ― in shaping the innovative direction and investment in both national and international markets.
To better understand Korea's current standing in the global AI market, it is relevant to note that until Moon Jae-in's presidency, it seemed that Korea was still focused on establishing itself as the leader in the Third Industrial Revolution, which is commonly referred to as the ICT revolution.
So it is no surprise that Korea finds itself as the second-ranked leader in global information and technology communication center according to the Bloomberg Index of Most Innovative Nations 2020. So when Moon stepped into the presidency, his government policy started to direct the country toward its Fourth Industrial Revolution ― the technological revolution directly related to AI innovation.
With this redirected focus on AI innovation, Korea started its path to catch up with its international contenders, announcing a national strategy in 2019 with a goal to heavily invest in AI infrastructure and incorporation of AI solutions in various sectors of the market.
Following this direction, Korea's most influential conglomerates started investing in AI research and development strategies as well. Samsung, one of the most influential companies locally and internationally, has invested in creating new AI research centers and consolidating internal AI divisions in order to compete with international contenders for the lead in AI technology.
This joint efforts of the government and conglomerates helped advance Korea in the race for AI innovation. According to a report from the Federations of Korean Industries (FKI), the number of AI-related patents registered in Korea reached 8,245 between 2011 and 2020, landing the country fourth place in terms of quantity of AI-related patents.
However, Clarivate Analytics and KAIST Center for Innovation Strategy and Policy show that even with the advancement in quantity, Korea still lags when it comes to the quality of these patents. Moreover, although Korea is ranked fourth, the U.S., ranked first place in terms of patents, has 61,179, which is eight times more than Korea.
In terms of scientific papers published on AI annually, Korea has only published a total of 6,940 papers, ranking ninth place, and 31st place in citations per paper. Investment for AI research and development was only 3.9 percent of what China invested in 2017, according to the Ministry of Science and ICT.
And while the U.S. had seen $36 billion in private investments for AI, Korea had only $600 million, according to a 2019 report by Stanford University HAI. The number of AI-educated people in Korea was 405 whereas the U.S. had 10,295 in 2019 according to Element AI. According to CB insights in 2020, while the U.S. developed 65 AI related startups, Korea had reported none.
In order to forge the future into AI success, four pillars seem crucial ― universities, startups, large companies and policy makers.
Universities and research centers are the foundation for AI development, and offer grounds for scientists and engineers to kickstart their ideas into businesses. Korea and the U.S. have had large companies sponsoring AI research projects at universities and research institutions. In China, the government has doubled its spending on university research annually for the past decade, helping the country become a leader in AI.
Nonetheless, although Korea's Ministry of Education has stated its commitment to AI education, the ministry has brought up the issue of lack of scholars familiar with AI. So, although universities are trying to expand their AI programs, the lack of professionals specialized in the field hinders such development.
In regards to startups, evidently the ecosystem of startups differs significantly for each country. The U.S.'s AI startup industry are placed as the first contender in the global scale, with China aggressively catching up. In order for startups to grow in Korea, the government should pave the way for more investments and incentivize national businesses to invest in this market.
As mentioned above, Korean conglomerates have the financial strength and experience to invest in AI research and development, but companies cannot do it alone.
Policymakers need to improve access to essential components for AI innovation, in terms of investment and access to data ― in the case of the U.S., the government website data.gov was opened in 2009 to increase public access to data, followed by former President Barack Obama's Open Data Policy in 2013. China lacks clear policies and regulations on privacy, which gives more access to personal data, and China's huge market provides advantages in big data that support the growth of AI businesses.
On the other hand, Korea has tighter regulatory policies. Although there have been major amendments to the country's data privacy laws in 2020, allowing companies to use data more flexibly, there are still several limitations on the access of personal information and medical data that hinder the fast development of AI.
However, just as China caught up to the U.S. which had a formidable lead, fast movers can displace market leaders. The number of scientific papers and patents may indicate growing interest to pursue AI technology but it does not necessarily translate to successful and qualitative AI development. Unlike pharmaceuticals or hardware development, AI is open science. AI research is shared openly and elemental algorithms in AI are accessible from published papers and conferences. This open nature of AI research allows latecomers an opportunity to catch up with current market leaders.
Furthermore, what seems more important than patents, is data and qualified specialists in the area. In markets we are more familiar with, such as pharmaceuticals, patents play a crucial role in protecting profits, but the open nature of AI puts great importance on database size.
So although Korea is making moves to establish itself as a top contender in the AI market, there is still a long way to go before reaching a competitive position in regards to the current leaders ― China and the U.S. Currently, with rapid advancements in digital technology, there have been movements from various governments to regulate data protection.
So in order for Korea to climb its way to the top of the AI race, cooperation between the private and public must take place, to navigate and balance AI development effectively along with growing concerns over data safety.
Chyung Eun-ju (ejchyung@snu.ac.kr) is studying for a master's degree in marketing at Seoul National University. Her research focuses on digital assets and the metaverse. Joel Cho (joelywcho@gmail.com) is a practicing lawyer specializing in intellectual property and digital law.
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| Chyung Eun-ju |
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| Joel Cho |
In this sense, it is important to highlight the crucial role played by the Korean government along with its family-run conglomerates ― also known as chaebol ― in shaping the innovative direction and investment in both national and international markets.
To better understand Korea's current standing in the global AI market, it is relevant to note that until Moon Jae-in's presidency, it seemed that Korea was still focused on establishing itself as the leader in the Third Industrial Revolution, which is commonly referred to as the ICT revolution.
So it is no surprise that Korea finds itself as the second-ranked leader in global information and technology communication center according to the Bloomberg Index of Most Innovative Nations 2020. So when Moon stepped into the presidency, his government policy started to direct the country toward its Fourth Industrial Revolution ― the technological revolution directly related to AI innovation.
With this redirected focus on AI innovation, Korea started its path to catch up with its international contenders, announcing a national strategy in 2019 with a goal to heavily invest in AI infrastructure and incorporation of AI solutions in various sectors of the market.
Following this direction, Korea's most influential conglomerates started investing in AI research and development strategies as well. Samsung, one of the most influential companies locally and internationally, has invested in creating new AI research centers and consolidating internal AI divisions in order to compete with international contenders for the lead in AI technology.
This joint efforts of the government and conglomerates helped advance Korea in the race for AI innovation. According to a report from the Federations of Korean Industries (FKI), the number of AI-related patents registered in Korea reached 8,245 between 2011 and 2020, landing the country fourth place in terms of quantity of AI-related patents.
However, Clarivate Analytics and KAIST Center for Innovation Strategy and Policy show that even with the advancement in quantity, Korea still lags when it comes to the quality of these patents. Moreover, although Korea is ranked fourth, the U.S., ranked first place in terms of patents, has 61,179, which is eight times more than Korea.
In terms of scientific papers published on AI annually, Korea has only published a total of 6,940 papers, ranking ninth place, and 31st place in citations per paper. Investment for AI research and development was only 3.9 percent of what China invested in 2017, according to the Ministry of Science and ICT.
And while the U.S. had seen $36 billion in private investments for AI, Korea had only $600 million, according to a 2019 report by Stanford University HAI. The number of AI-educated people in Korea was 405 whereas the U.S. had 10,295 in 2019 according to Element AI. According to CB insights in 2020, while the U.S. developed 65 AI related startups, Korea had reported none.
In order to forge the future into AI success, four pillars seem crucial ― universities, startups, large companies and policy makers.
Universities and research centers are the foundation for AI development, and offer grounds for scientists and engineers to kickstart their ideas into businesses. Korea and the U.S. have had large companies sponsoring AI research projects at universities and research institutions. In China, the government has doubled its spending on university research annually for the past decade, helping the country become a leader in AI.
Nonetheless, although Korea's Ministry of Education has stated its commitment to AI education, the ministry has brought up the issue of lack of scholars familiar with AI. So, although universities are trying to expand their AI programs, the lack of professionals specialized in the field hinders such development.
In regards to startups, evidently the ecosystem of startups differs significantly for each country. The U.S.'s AI startup industry are placed as the first contender in the global scale, with China aggressively catching up. In order for startups to grow in Korea, the government should pave the way for more investments and incentivize national businesses to invest in this market.
As mentioned above, Korean conglomerates have the financial strength and experience to invest in AI research and development, but companies cannot do it alone.
Policymakers need to improve access to essential components for AI innovation, in terms of investment and access to data ― in the case of the U.S., the government website data.gov was opened in 2009 to increase public access to data, followed by former President Barack Obama's Open Data Policy in 2013. China lacks clear policies and regulations on privacy, which gives more access to personal data, and China's huge market provides advantages in big data that support the growth of AI businesses.
On the other hand, Korea has tighter regulatory policies. Although there have been major amendments to the country's data privacy laws in 2020, allowing companies to use data more flexibly, there are still several limitations on the access of personal information and medical data that hinder the fast development of AI.
However, just as China caught up to the U.S. which had a formidable lead, fast movers can displace market leaders. The number of scientific papers and patents may indicate growing interest to pursue AI technology but it does not necessarily translate to successful and qualitative AI development. Unlike pharmaceuticals or hardware development, AI is open science. AI research is shared openly and elemental algorithms in AI are accessible from published papers and conferences. This open nature of AI research allows latecomers an opportunity to catch up with current market leaders.
Furthermore, what seems more important than patents, is data and qualified specialists in the area. In markets we are more familiar with, such as pharmaceuticals, patents play a crucial role in protecting profits, but the open nature of AI puts great importance on database size.
So although Korea is making moves to establish itself as a top contender in the AI market, there is still a long way to go before reaching a competitive position in regards to the current leaders ― China and the U.S. Currently, with rapid advancements in digital technology, there have been movements from various governments to regulate data protection.
So in order for Korea to climb its way to the top of the AI race, cooperation between the private and public must take place, to navigate and balance AI development effectively along with growing concerns over data safety.
Chyung Eun-ju (ejchyung@snu.ac.kr) is studying for a master's degree in marketing at Seoul National University. Her research focuses on digital assets and the metaverse. Joel Cho (joelywcho@gmail.com) is a practicing lawyer specializing in intellectual property and digital law.
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