* Editor's Note: According to the Korea Foundation's 2024 report, there are nearly 225 million Hallyu (Korean Wave) fans worldwide. With the advent of the "Digital Silk Road," transcending time and space, we are entering the era of "Hallyu 4.0." To help readers gain a fresh perspective on Korean culture and K-culture, the Yonhap News K-Culture Team has prepared a series of expert columns.

 

Do Joon-woong's Digital Economic Insight: Survival Conditions in the AI Era

 

Contributed by Do Joon-woong, Management Strategy Expert and CEO of KeyTalk AI. (Formerly served as Vice President of McKinsey & CJ Group. Author of Reconstructing Marketing in the AI Era and Marketing New Normal 10 in the Digital Transformation Era.)

A few months ago, the government announced the establishment of the "National Artificial Intelligence Committee." The initiative aims to bring together top experts from the private sector and the government to position South Korea as one of the world's three leading AI nations (G3). The Ministry of Science and ICT passed the "Regulation on the Establishment and Operation of the National AI Committee" (Presidential Decree) during a cabinet meeting.

 

Around that time, I shared seven recommendations with a colleague who advises on national strategy, focused on the survival of companies and nations in the AI era. The late 1990s, when I began my career, was the dawn of the internet market. Reflecting on the last two years of rapid AI development, I see parallels with the early days of the dot-com boom.

 

We are currently in the midst of the 5th Industrial Revolution, the "AI Revolution," which echoes the patterns of the dot-com era. South Korea's "masterstroke" in building high-speed internet infrastructure allowed it to become a global IT testing ground and transform its citizens into power users. This transformation helped the country earn the title of an "internet powerhouse" and sustain its growth momentum. A similar "masterstroke" is now crucial in the AI field—turning South Korea into a global testbed for AI development could be a key strategy for gaining leadership in the AI era.

 

The second crucial point is the strategic selection of focus areas within the AI sector, what I term "Battlefield Identification." On the surface, national reports on AI strategy and technology assessments for companies suggest that South Korea aims to lead in AI core technologies. However, a more refined approach is necessary, focusing on areas where the country can build a competitive advantage.

 

Historically, the U.S. has dominated the computing landscape, from DOS to Windows, Android/iOS, and now Large Language Models (LLMs) like ChatGPT, Gemini, Llama, and Claude. With LLMs, computing has evolved from "click, drag, drop" to being accessible through natural language, extending deeply into human environments and impacting daily lives. It is unlikely that the U.S. will relinquish its leadership in this domain. The AI market is complex, requiring more than just technical expertise. It demands resources like GPUs, large-scale data centers, operational energy, capital, and most critically, a market willing to pay for these capabilities.

 

Thus, while benchmarking the U.S. is valuable, South Korea must not merely aim to emulate its direction or focus solely on nurturing relevant talent. Instead, it should consider what it can excel at within the AI ecosystem that the U.S. has built. Similar to how Booking.com emerged from the Netherlands and Agoda from Thailand and Singapore, South Korea should aim for leadership in specific areas like industry-specific services or plugin marketplaces (e.g., services within GPT Store) rather than competing directly with LLMs.

South Korea may not have won Olympic golds often, but it has consistently excelled in the "Skills Olympics." Although it can be frustrating, focusing on specific verticals and application areas to secure top positions is a domain where South Korea can certainly succeed.

 

Thirdly, the importance of AI sovereignty and the strategic use of data cannot be overstated, and a nationwide AI alliance is necessary. "Strategy" is about setting goals and finding the means to achieve them. While the primary goal of a national AI strategy is not solely to ensure sovereignty, it is undoubtedly significant. The role and importance of AI in people’s lives need no further emphasis. While AI sovereignty matters, there are many critical national decisions impacting citizens’ lives that go beyond infrastructure concerns. In fact, foreign AI models sometimes have a broader, more objective understanding of Korea than domestic models.

 

The concept of AI sovereignty requires a reevaluation. This isn't about exclusively using domestic LLMs (Large Language Models) but rather ensuring South Korea has control and influence over major LLMs. It is crucial for South Korea to quickly start negotiations with two or three major LLM providers. During this process, it is important to consider not only incorporating elements reflecting Korean culture but also deeply addressing new risks, such as security and confidentiality, that arise alongside convenience.

 

It would be impractical and even detrimental for the nation to rely solely on less advanced domestic models for core infrastructure or security purposes. Such a strategy could turn South Korea into a battleground for IT supremacy once again. For example, if a domestic company like Naver truly seeks AI sovereignty, it should consider partnerships that allow it to share its existing data in exchange for business rights, rather than trying to mandate the use of its "Hyper ClovaX" across the nation—a move that could be seen as short-sighted.

 

South Korea has invested heavily in national projects like the "Data Dam" (a project to collect big data through ultra-connected communication networks and analyze it using AI). While private companies also hold substantial data, they should actively contribute to AI sovereignty by using this data for training and development. Such efforts could enable the creation of AI models tailored to reflect Korea’s unique history and culture. This approach would also provide a competitive advantage when cooperating with major international LLMs, allowing the development of AI solutions that are uniquely suited to Korea’s needs.

 

By building an ecosystem where companies that benefit from the Data Dam project or other LLM initiatives provide their data in exchange for operational rights or related services, the value of data is recognized while also contributing to advancements in AI technology. This would be an effective way to enhance both technological development and the nation's strategic positioning.

 

In practice, many experts who have extensively used AI models find that foreign LLMs often have a good understanding of Korean language and culture, even outperforming domestic models in recognizing new terms. Therefore, this is not a matter of national pride. As it concerns the nation’s survival in the AI era, decisions must be made with careful consideration.

 

The definition of an AI expert also needs to be reexamined. There are many talented individuals currently guiding the national AI strategy, supported by teams of capable analysts. These experts should prioritize the interests of the nation and its citizens over the benefits of specific corporations or technological limitations. Each person in this field must adopt this perspective.

 

Crafting national strategies is not about showcasing knowledge and insights as "early adopters." While it is positive for AI experts to be involved in policy-making, their involvement should be based on a commitment that transcends technical boundaries and commercial gains, contributing to genuine national competitiveness.

 

Strategy extends beyond technology. As mentioned earlier, a group of experts with a historical perspective and insight from the dot-com era is also essential. Their involvement in shaping the nation’s AI strategy will help ensure that South Korea plays a leading role in AI technology. This, in turn, can facilitate a balanced approach to developing AI models that are both locally rooted and globally oriented.

 

In companies, issues related to technology are rarely left solely to the CTO (Chief Technology Officer); often, CEOs directly oversee them. Similarly, policymakers should actively use and understand AI technologies in collaboration with AI experts. South Korea must avoid repeating the mistakes of the dot-com era when many top executives failed to directly engage with emerging technologies. This engagement will lead to more informed and effective decision-making.

 

Such a strategic approach will enable South Korea to secure a significant position in the global AI market, while also creating an environment where citizens can equally benefit from AI advancements. By implementing this strategy, South Korea can establish itself as a global leader in the AI era and enhance its long-term national competitiveness. (To be continued)

 

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