DOI: 10.1177/09717218261483834 ISSN: 0971-7218

Korea’s AI Innovation Ecosystem: Policy Evolution, Structural Constraints, and Strategic Implication on the Labour Market

Deok Soon Yim, Doohee Hwang, Yongjoo Kim, Eun Joo Kim, Jong-Seon Kim, Seong Soo Kim

This study examines Korea’s artificial intelligence (AI) policy and current status using the AI Innovation Ecosystem (AIIE) framework. In the proposed AIIE, AI is being developed and utilised through the interactions among various actors with infrastructure, markets, and global linkages. Korea’s AI policy history and ecosystem are characterised by strong government intervention and big firms in the manufacturing and semiconductor industries. Up to now, the Korean government is known to be successful in supporting the development of manufacturing industries. However, there is a question of whether such a past policy type would still be effective when AI affects various industries and society together at high speed. It is analysed that the Korean government and industries are pursuing a manufacturing-based ‘physical AI’ strategy. At the same time, there is not a big change in the labour market yet, as predicted by many experts, but it is obvious that firms prefer more skilled manpower and do not hire as much, especially the entry-level workforce, which can be supported by AI such as accounting and law clerk. The study shows that AI competitiveness of a nation is more dependent on the national AI ecosystem than on individual technologies, and thus the government has to pursue system policies and coordination rather than the development or use of individual technologies. At the same time, the Korean case provides insight into how a middle-power economy navigates AI-driven transformation under conditions of global technology competition and interdependence.