Artificial intelligence and the future of the Korean economy
March 13, 2023
This article was published on The Korea Times on March 12, 2023.
Manufacturing has historically been one of the keys to Korea’s economic success. Korean firms have moved up the value chain to become world-class manufacturers in high-value sectors such as semiconductors, automobiles, consumer electronics and shipbuilding. However, that development has come at the expense of the Korean services sector. In an age where artificial intelligence (AI) and new innovations such as ChatGPT are emerging, an underdeveloped services sector could hinder Korea’s future economic growth.
According to the World Bank, manufacturing accounts for about 25 percent of Korea’s GDP. In contrast, manufacturing accounts for only 17 percent of global GDP and just 11 percent for the United States. Even in Germany, another highly industrialized economy, manufacturing accounts for only 19 percent of GDP.
While Korea has seen some successes on the digital side of the economy with Naver and Kakao, neither makes the Forbes 2000 list of the largest global companies. In contrast, Samsung is the world’s 14th-largest company but has yet to add a strong digital or software component to its manufacturing prowess, in spite of its potential as one of the world’s largest data companies due to its success in smartphones and efforts to be a leader in the Internet of Things.
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