The Republic of Korea –“Pali-Pali” Innovation

Beyond any doubt, the Republic of Korea (ROK) has progressively become a global innovation leader. The rankings shared below serve to illustrate the international recognition of the immense innovation potential South Korea has been actively and premeditatedly tapping into at the very forefront of the 4.0 Industrial Revolution:

  • Bloomberg 2020 Innovation Index which measures R&D spending, patent activity, productivity and manufacturing output has been ranking South Korea in its top tier for the past 6 years [1]
  • Global Innovation Index 2019 carried out by Cornell University, INSEAD & WIPO put South Korea at the heels of established innovators, alongside the Asian economies cluster of Hong Kong, China and Japan. [2]
  • Clarivate’s G20 Scorecards 2020 measuring research performance identified South Korea as one of the frontrunners in engineering output, relatively large research workforce and Open Access rising above G20 benchmarks. [3]
  • World Intellectual Property Organization’s 2019 statistics report place The Republic of Korea as the nation with the highest number of patent applications per unit of GDP, and per population, while being only second after China in share of PCT applications with women innovators. [4]
  • The Global Information and Communication Technology (ICT) Development Index (IDI) has been consistently highlighting South Korea as a global ICT powerhouse for the past couple of years. The trend appears to be going strong considering the favorable indicators included for the proposal for the upcoming 2020 edition of the ranking. [5]

Development curve

Considering that South Korea is exhibiting an extremely rapid development in the field of modern technologies, it is crucial to take note of the colonial past [6], [7], war history [8] , regional security threats [9] , domestic military coups [10], agricultural tradition [11]  and hard-hitting economic crises [12], [13] that the developing country of South Korea has overcome to become the G20 leading industrial nation of South Korea and to examine the particular factors that boosted the miraculous sprint.

Development conditions to be factored in

Firstly, in socio-cultural terms, aside from being a nation with deep-rooted respect for hard work, South Koreans are also very patriotic in supporting their domestic products, services and achievements. Furthermore, ROK citizens are not only open to innovation and technology but they have a very particular cultural characteristic of pushing things to happen quickly and effectively a.k.a “Pali-Pali” (빨리빨리) culture (lit. translation- “quickly, quickly!”). All the aforementioned, combined with the fact that South Koreans start to learn computer coding from kindergarten [14], have enabled the education system to provide ample and driven talent for the technology industry.

 Secondly, government intervention and investment in supporting R&D and tech innovation have “brought rapid and long-lasting results.”[15] The outstanding performance in R&D intensity, particularly in the ICT sector, could be largely attributed to the government investments and government encouraged industry investments. In the past six decades, the state pushed for a policy-ushered shift from dependency on technology imports and foreign companies pushing South Korea down the international value supply chains to the home-grown miracle of large industrial groups coined “chaebols’‘* which have made huge strides in the socio-economic and technological development of the country. [16] M&A with companies in the US and Europe also served to enhance South Korean tech capabilities. [17] The change in the economic paradigm of the country can be defined as a move away from labour intensive industries (e.g. textiles) to high-tech industries (e.g. semiconductor design and manufacture, mobile phones, mobile applications, chips, batteries, etc.); away from low-value added exports to knowledge-intense high quality products and services. [18] Innovation and technology have become the cornerstones of South Korea’s economic rise. According to DW “Korea has had to make its own path in a region where it competes with China’s low labour costs, and Japan’s high-tech, capital-intensive industries. Spending more on R&D than any other economy not only reflects a domestic consumer base with a high demand for new technological developments, but also the government’s objective to build a creative economy”. [19]

Thirdly, as already outlined, chaebols have become the backbone of the South Korean economy (Samsung, Hyundai, SK, LG, Lotte, POSCO, Hanhwa, GS, etc.). [20] The corporate giants dominate the country’s investments in R&D and have eagerly taken up collaboration with academia. Working with industrial behemoths, the government began developing regional innovation centres and the cross-sectoral movement of researchers between industry and academia has been opportunely liberalized, bridging the business and research divide. What’s more, South Korean tech firms have also gone about joining forces to reinforce AI capabilities. [21] For instance, two coalitions were recently formed. The first, consisting of KT, LG Uplus and LG electronics striving for broader cooperation in finding AI solutions to pandemic-caused issues. And, the other, consisting of SK Telecom, Samsung Electronics and Kakao focusing on voice assistants (NUGU, Bixby and Hey Kakao). [22] It is interesting to note that while much consideration has been given to the structural concerns of an inherently chaebol-driven market economy, South Korea is not exhibiting any of the stagnant growth rates many of its Asian peers are exhibiting. One main factor which the research community appears to favour is the strong National Innovation System. [23]

Relatively early on in its 21st century economic development The Republic of Korea made the acquisition of tech capabilities an agenda priority. [24] Moreover, R&D took a very important position in the economic growth and industrial development of the country, while it was struggling to overcome the vicious cycle of the middle-income trap and engaging in open, multi-stakeholder innovation. [25]


The latest data from the OECD on Gross Domestic Spending on R&D from 2019 indicates that South Korea comes second only to Israel with the staggering 4.6% (doubling in just two decades) against an EU average of 2.1% and U.S. 3.1%. [26] According to Korea Institute of S&T Evaluation and Planning (KISTEP) there’s a tangible shift taking place from a focus on basic research to a focus on applied research. The figures from 2014 show a clear trend with Basic research at US$10.6bn , Applied research at  US$11.5bn, and Experimental development at US$38.4 bn. [27]

While South Korea is a global leader in frontier tech IoT, big data, quantum computing, advanced materials and nanotech (incl. material used in the renewable energy sector and wearable tech), and health- related tech with a robust educational tradition in science, technology, engineering and mathematics disciplines [28] there’s still space for improvement in tackling cultural barriers, bureaucratic practices, highly educated youth exodus to foreign countries (a.k.a. ‘brain drain”) and gender diversity.[29]

The Republic of Korea is a leading ICT center with cutting-edge ICT infrastructure (including the world’s fastest internet) and home to the leading electronics and IT companies. [30] ICT infrastructure is an absolute prerequisite in bridging the digital divide between urban and rural areas. [31] As early as 1995, the government launched a ten-year plan worth US$1.5-billion for broadband infrastructure that has come to provide a tangible momentum to future developments. [32] As an ICT powerhouse, South Korea is currently heavily investing in innovative technologies- 5G Network, Artificial Intelligence and Big Data, and is putting its bid as a global contender in AI capabilities. [33]

South Korea is a pacemaker in ‘ubiquitous connectivity’ in the context of the digital future of the world. Whether in terms of the logistics of making digital payments or societal attitude of embracing new tech in daily life, the ambitious digital transformation has been permeating the economy and education. ICT is being integrated at all school levels curriculum but also as an infrastructure within educational facilities (incl. Wi-Fi, electronic devices, even VR). According to Professor Jeong Rang Kim from the Department of Computer Education, Gwangju National University  “The goal is to strengthen the 21st-Century learner’s capacity. In particular, we focus on 4Cs: Critical thinking and problem-solving, Collaboration, Character, and Communication. Nowadays, software education is in full swing, so we try to improve computational thinking,”. [34]

The United States of America Department of Commerce’s International Trade Administration has discerned the aggressive pursuit of AI technologies by South Korean top tier electronics, internet and telecom companies. The three sub-sector best prospects they have identified are a. On-Device AI (faster and green AI computation), b. AI Chip (overcome data-sharing constraints while adding new AI products and services), and c. Monetization of AI (scaling innovation). Accordingly, they have highlighted several large-scale investments: [35]

  • Samsung has opened seven AI centers in five countries and worked on various projects such as new machine learning algorithms, AI Chip and On-Device AI.
  • Naver, Korea’s largest search engine and portal site, acquired Xerox AI research center Europe in 2017 and developed its own core AI engines for speech/image recognition, machine learning platform and test analytics, etc. Also, in 2019, the company and the Softbank group jointly committed to invest $1 billion investment, annually.
  • KT, the second-largest mobile carrier in Korea, has committed $300M investment on core AI research for the next three years and announced a plan to expand its AI engineer headcount and partnership with other AI companies.”

Several of the top ROK exports are in the sphere of ICT hardware manufacturing- semiconductors, wireless communication devices, flat panels and displays, electronic application devices and secondary lithium batteries (43.5 percent of the global market share). However, South Korea is also making confident strides in software development- AI, IoT, VR & AR, Cloud, Autonomous cars, Next Generation Cybersecurity, Fintech/mobile payment, online to offline (O2O), smart healthcare, open source. [36]

South Korean Silicon Valley

In 2010, the South Korean market saw an emergence of SMEs in biotechnology, AI, cybersecurity, broadband, etc. The shift ushered in a new generation of entrepreneurs who already have the basic infrastructure in place to make their businesses take off. However, the state has been consistently pushing for more innovation and incubation of smart startups. Already in 2010 “South Korea had 105 regional innovation centers and 18 techno-parks in 2010, as well as seven programmes to strengthen the competitiveness of industrial cluster programmes“. [37] One such palpably successful initiative is the setting up of the Pangyo Techno Valley a.k.a “The South Korean Silicon Valley” located in Seongnam, Gyeonggi-do province in 2004 with the state gifting 1⁄4 of the land. With a staggering government investment of US$88.9 million, the Pangyo New Town even boasts a direct subway and highway connection to Seoul and Incheon International Airport. The tech hub accommodates the resident offices of the biggest South Korean conglomerates as well as 1,306 IT companies. [38] The innovative cluster of “Techno Valley One”, much like its up and coming peers “Techno Valley Two” (an expansion of PTV) and “Techno Valley Three” (under construction in Kyunggi-do province) nurtures tech startups and houses research institutions. [39]

KAIST- ROK’s research leader in innovation 

The Korea Advanced Institute of Science and Technology (KAIST) is one of the world’s leading research universities. International rankings have recognized KAIST as one of most innovative research institutions in the world. [40] ICML and NeurIPS papers have secured top rankings in publications for KAIST. [41]

The Graduate School of AI at KAIST launched Korea’s first MS and PhD program in Artificial Intelligence in 2019. The Graduate school excels at providing global level expertise and industry insight in the fields of Machine Learning, Artificial Intelligence, Data Mining, Computer Vision and Natural Language Processing. [42] Just in the last year, KAIST published more than 60 ground-breaking research papers. [43]

KI for AI focuses its research work on three streams: [44]

  • AI Fundamentals (Brain Science and Engineering, Machine Learning, Multimodal Perception and Interaction, Natural Language Processing, Understanding and Generation and Emotional Intelligence)
  • AI Emergings (Brain AI Interface (BAI), Smart Chips for Pervasive Intelligence and Quantum Machine Learning)
  • AI applications (AI based Medical/Healthcare, Intelligent Urban Robotics, IoT based Intelligent Companion, AI based new material design and composition, AI based Chemistry, AI based nuclear fusion reactor diagnosis and control, AI based Marine and Atmosphere Prediction System and AI based Management and Economics)

In more recent developments, just two years before, KAIST launched its very own Center for Neuroscience-inspired AI (CNAI) to work on Next-generation AI Technology for implantation in the human brain. [45]  Furthermore, in 2020, KAIST announced its intention to launch an AI big data centre and “set up a public database aimed at developing emotional intelligence technology-based artificial intelligence (AI) services”. [46] Earlier this year, KAIST’s research team launched the country’s first mobile app that detects deepfakes by using AI technology. [47]

Busan Smart City

Busan is the first IoT-based Smart City in Korea, marking total investments of US$320 million for its multi-staged development delivering innovative solutions through public-private partnerships. [48] The pioneering initiative set to be fully developed by 2024 aims at “a. Establishing IoT-based smart city operation platform  b. Promoting creative economy by boosting smart city industries, and c. Strengthening Busan’s competitiveness and creating high added value in the era of global competition.” The vision behind President Moon Jae-In’s steadfast support for the projects is to evolve South Korea’s second largest city into a better connected, safer and disaster manageable, greener and energy efficient, citizen-driven and more convenient smart flagship city.[49] The main pillars  of development are a. ICT Infrastructure, b. Busan U-City Project (2006 -2014), c. Smart Fintech and Cloud Clusters- MoonHyun Financial ICT Valley; Haeundae Smart city Test-bed; West-Busan ICT Belt and Yeongdo Ocean ICT Convergence Belt d. Smart City Test-bed Support Center, and e. City-to-City collaboration for Smart City. [50]

AI Policies

In the wake of to the 2016 AlphaGo shock from the Google DeepMind AI program AlphaGo beating Korean grandmaster Lee Sedol at the game Go in a five-match showdown with a 4 to 1 result [51] , Yonhap News Agency quoted the 18-time world Go champion “I’m not at the top even if I become the number one…There is an entity that cannot be defeated”. [52] Considering the overwhelming societal response to the stark need for ROK to become a more prominent player in the design and development of the technologies that would shape the future, then President Park committed government investments of approx. US$900m in AI and encouraged a US$2.2bn investment from the industry. Another important aspect envisioned was the forwarding of public-private research institutes. [53]

The Korean Ministry of Science, ICT and Future Planning (MSIP) prepared an Artificial Intelligence Information Industry Development Strategy in 2016. The “Mid-to Long-term Master Plan in Preparation for the Intelligent Information Society: Managing the Fourth Industrial Revolution” report engaged with a broad array of topics related to of AI, IoT, cloud computing, big data analysis, and mobile technologies, all the while staying true to the national vision of “Realizing a Human-Centered Intelligent Information Society”. [54] An important highlight from the report is the goal to “Foster an intelligent information society on the basis of public-private partnership, with businesses and citizens playing leading roles and the government and research community providing support.“ [55]

Outstanding domestic political pressures have been directing the Moon Jae-In government to address different issues through potential AI application solutions. Those include welfare (aging population and homelessness), education (globalization language demands), manufacturing (energy transition), agriculture (sustainability and efficiency demands), and security (online safety). What’s more, increased intervention on social issues like online bullying, mental health and suicide, as well as the perpetuation of gender stereotypes have been called upon by the South Korean citizenship. [56]

The three strategic areas for government investment to promote innovative growth identified early on in the Moon Jae-In administration are AI, data and the hydrogen economy. [57]

 AI has been so prominently featured in recent years that a Presidential Committee on the Fourth Industrial Revolution was established in 2017. [58]

The following year, an AI R&D strategy stipulated an almost US$2bn investment in developing technology, public large-scale projects and nurturing 5000 AI specialists by 2022. [59]

Then in 2019 The Manufacturing Renaissance Strategy committed to building 2,000 AI based factories by 2030. [60]

The same year the Moon Jae-In administration and nine ministries introduced a “vision and strategy” for system semiconductors. “1 trillion won (US$858.93 million) in R&D funds are to be used for development of artificial intelligence (AI) semiconductors and other next-generation semiconductor technology. A new dedicated fabless fund of 100 billion won (US$85.89 million) is to be created under private sector leadership.” [61]

Another sector that has been actively reinvigorated by the state efforts through AI technology is the military. In order to have “a smaller, yet smarter military” a Defence Reform 2.0 was put forward and a 10 percent increase of budget spending was allocated to the defence sector. [62], [63]

Following the acceleration of South Korean AI ambitions, the state supported the three main mobile operators to activate the first 5G network in April 2019 leading the global race in intelligent network deployment. [64] As of November 2020, the network already has some 11 million subscribers. [65]

Despite South Korea’s strong tradition in engineering, the government established the existence of a gap in AI expertise within the engineering talent pool, which prompted  the 2019 launch of an initiative for  AI Engineering schools. [66]

In 2020 The Republic of Korea committed approx. US$4bn from its budget for big data platforms, AI, 5G network services, semiconductors, bio-health and smart automotive developments. Initiatives to “boost the economic vitality and innovative growth” enlisted the launch of an AI research and development complex in Gwangju for AI and cloud next-generation robotic technology, SMEs vouchers for AI-solutions, support for big data registries at hospitals, drug and medical device research, R&D in hydrogen and electric vehicle technologies, creation of “digital twins”. [67]

The National Strategy for Artificial Intelligence released in 2020 called for providing “high quality services, starting with those areas that can directly impact people’s lives such as the environment, disasters, safety and national defense, so that the public can sense the changes.” through the accomplishment of 100 different tasks related to “AI competitiveness, the full scale utilization of AI, and developing a people-centered approach to AI”. [68] The Strategy complements ROK’s international position in the field  and serves as an example of combining political will, industry interest and education for the good of the nation.

Recognizing the need for further engaging with the newly blooming startup ecosystem of ROK, the government supported the establishment of an AI Open Innovation Hub to provide SMEs and start-ups with data, algorithms and high-performance computing resources to allow them to innovate with AI. [69] Aside from supplementing and developing the AI capabilities of the startups in an incubator-style, it is just as vital to create a nationwide conducive environment. Currently there are some 30,000 national and international startups operating in IT, IoT, VR, AR Fintech, AI and Blockchain. Most notably, the startups are concentrated in and around Seoul with the government supporting greater spatial diversity. [70]

South Korea’s DNA initiative- data, network and AI and the Digital New Deal outline the post-COVID development with a multi-billion dollars investment boost. [71] The Digital New Deal exemplifies the combining of government, industry and academia efforts to tap into the unbridled potential of AI technologies. [72]

South Korean success in containing COVID19 through technology

Recognizing the social factors of collectivist culture, rule-following citizenship, as well as the capacity-building precedence of the 2015 MERS outbreak, it is just as paramount to relate the speed and coordination of response implementation (extensive testing and rigorous quarantine measures) to the combined force of political will, open public attitudes to technology and deeply-penetrated ICT infrastructures that enabled the expedient efforts of the health authorities. [73] 

South Korean firms used AI during the pandemic to search for treatments for COVID-19 (e.g. biogenetics firms Theragen Etex and Synteka Bio) [74], improve diagnosis (e.g. medical solutions company Lunit) [75] , and monitor those who are in quarantine (e.g. SK Telecom and its Nugu Carecall senior care system). [76] Another indicative instance of private companies gaining state support and moving forward with initiatives to alleviate the coronavirus crisis would be the development and launch of medical products inventory applications that provide real-time information on availabilities in pharmacies. [77] One such application would be the “Mask API”, generating data to direct citizens to where they can acquire masks, an item that was subject to shortages. Those shortages served as triggers to “panic buying” patterns that only exacerbated the situation. [78]

As aforementioned, with the infrastructure already in place, considerably facilitates the data-gathering and tracing technology practices. As of 2021, South Korea is approximated to have a smartphone penetration rate of 97% [79] and some 860,000 4G and 5G transceivers. South Korean national and local governments have increased by 200 per cent the number of CCTVs around the country within half a decade. As of 2019, there were more than 1 million units in operation. [80] What’s more, the trend of using automotive black boxes in cars has been spreading so exponentially that the numbers have climbed to 4.5 million and providing additional surveillance options in place. [81] Finally, with the Republic of Korea being a regional leader in moving away from cash transactions, following payment information on people’s daily routine couldn’t be more straightforward (e.g. from taking public transportation and grocery shopping to sending marriage gifts and Kakao Pay bills payment). [82]

A curious development, characteristic of the ROK’s handling of the COVID19 crisis via technological means, is that unlike European citizens, there was a South Korean citizen consensus with limited concerns regarding democratic governance and accumulating tracing data of infection routes and human contacts to effectively curb the spread. Despite South Korea’s Infectious Disease Control and Prevention Act [83] granting state officials access to personal information without a warrant and the consequent disclosure to the public, the Moon Jae-In administration appears to rely on transparency and following strict legal procedures in the collection, monitoring and usage of the personal information, without causing severe concerns over the infringement of privacy. The South Korean approach could be defined as striking a tentative balance between the need to take measures in order to guarantee the public health, while also abiding by individual basic rights of citizens. [84]

The Republic of Korea is one of the top global performers in terms of containing the coronavirus but it is taking the role of technology and innovation a step further by banking on AI as part of its post-COVID recovery strategy. [85]

* Huge business conglomerate systems that originated in the 1960s period of economic transition and political turmoil. As the Korean term for it 재벌 translates as “plutocracy” or “wealth clique” so do the characteristics of chaebol structures refer to a single family passing down hereditary power over an industrial group with a considerable network of affiliates in diverse industries.

Written by: Angela Sarafian (Communications Manager)


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