18 March 2016 (Seoul, Korea)

1. Center for Strategic Foresight, STEPI
Sungho Lee, Research Fellow

2. 1
I. Korea’s achievement in the past
II. Challenge of Emerging New Paradigm
III. Implications

3. 2
Value Added Share of ICT Sector
 Korea has the largest share of ICT sectors in GDP : the strongest
specialisation in computer and electronic products (over 7% of the GDP)
• The average share of the ICT sector : IT services 2%, telecommunications 1.7%,
Computer and electronic products 1.4% and software publishing 0.3%.
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

4. 3
Exports of mobile phones and service platform
 Naver’s Mobile Messenger App
“Line” has become a mobile
content platform across Asian
and other countries
– Worldwide registered users
reached 600 million people.
(Source : http://americangaijin.com/line-free-calls-messaging-app/ )

5. 4
R&D Share of ICT Sector
 ICT R&D relative to GDP is the highest in Taiwan and Korea (1.7%)
• Israel (1.5%) , Finland (1.2%), the US, Japan and Sweden (0.6%).
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

6. 5
International ICT R&D Cooperation
 Korea actively participates in international ICT innovation networks
• Innovation in ICTs are increasingly undertaken through international networks
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

7. 6
Employment Share of ICT Sector
 The employment share of the ICT sector in Korea is over 4%.
• In 2013, employment in the ICT sector accounted for almost 3% of total
employment in the OECD : IT and other information services together with the
telecommunications industry account for 80% of ICT employment in the OECD area.
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

8. 7
High-speed Broadband Internet Connection
 66.3% of fixed broadband subscriptions in Korea is fiber connections.
• Japan has the highest share, 71.5%.
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

9. 8
Wireless Broadband Internet Connection
 Wireless broadband subscriptions per 100 inhabitants in Korea is 105.3
– In 2014, average wireless broadband penetration in the OECD area was
78.23 subscriptions per 100 inhabitants : Finland (131.58), Japan (116.4)
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

10. 9
 Smartphone ownership has increased rapidly since 2009
Rapid Adoption of Smartphone in Korea
Source : KAIT’s internal data
Year 2011 2012 2013 2014 2015
All mobile phone 89.2 91.2 91.8 92.4 93.2
- Smartphone (3G, LTE) 24.2 54.0 71.9 79.5 83.2
- Feature Phones 75.8 46.0 28.1 20.5 16.8
Source : KISDI(2015). The Change of Media Usage Behavior . KISDISTAT Report.
< Diffusion of Smartphone >

11. 10
Advanced IT Usage
(Source : OECD(2015). OECD Digital Economy Outlook 2015)

12. 11
Large share of media usage in daily life
 Korean people spend 6 hours and 42 minutes daily on average in 2015
– Daily Mobile phone usage time increased 30 minutes between 2011 and 2015
– Computer and printed media usage time slightly decreased
– TV watching time has been maintained
Source : KISDI(2015). The Change of Media Usage Behavior . KISDISTAT Report.
< Average Daily Media Usage Time (2011~2015) >

13. 12
Internet as a Content Platform
 The Internet platform provides an opportunity for the crowd to become
information producers
(Source : Kim, S.(2014), Potential of the Internet as a Content Platform)

14. 13
Internet Collective Intelligence Platform
 The Internet platform has
provided opportunities for
the crowd to become
information producers
– Naver Knowledge-iN
 Naver Webtoon
has created an ecosystem
with a virtuous cycle
for the comic industry
– Korean comics were
underdeveloped
because of declining
publishing market
(Source : Kim, S.(2014),
Potential of the Internet
as a Content Platform)

15. 14
Empowering Young Part-time Workers
 Many Korean Part-time Jop Portal try to help young people to be smart
workers and improve job conditions
– Unemployment among young people is
high in Korea as well, and many young
Koreans try to find even part-time jobs
– Part-time Job portal and apps connect
employers with employees
– Many employers violates minimum wage
law, and survey by Job portal Albamon
found 7 out of 10 suffered abuse at
work : excessive workload, verbal
insults and delayed pay
– Part-time Job portals do campaigns
in collaboration with the Min. of Labor.

16. 15
Diminishing Digital Divide
 Digital Access & Utilization by the Korean Unprivileged has been
improved continuously
– The digital divide index and status has been
improved over a decade
– The digital access level by the Korean unprivileged
has reached close to that of the entire population,
but the digital utilization capability level by the
Korean unprivileged remain low
– The digital access & utilization level by the senior
and rural people remain low
Overall Access Capability Utilization Overall Disabled Low Income Senior Rural
<Access & Utilization Level Compared with the Entire Korea Population >
<Access & Utilization Level Compared
with the Entire Korea Population >
(Source : NIA(2015),
The Survey on the digital
divide index and status)

17. 16
Media Divide across Generations
 There exists substantial differences about the most preferred media
devices across generations
– People in 40s and younger age preferred smartphone to TV
– People in 50s and older age preferred TV to smartphone
Source : KISDI(2015). The Change of Media Usage
Behavior . KISDISTAT Report.Source : Chung,Y.(2015). Smartphone Diffusion and the Change
in Media Usage across Generations. KISDISTAT Report.
< Most preferred Media Device across Generations>
< SNS Adoption Rate >

18. 17
I. Korea’s achievement in the past
II. Challenge of Emerging New Paradigm
III. Implications

19. 18
Growth of the Korean ICT Industry
 GDP of the ICT sector has achieved the robust growth since 1995
 However, its growth
rate is converging to
0% recently
(Source : Ju, J(2015). Trend Analysis of the Korean ICT Industries. KISDISTAT Report.
(KRW 1B)

20. 19
Growth of the Korea’s ICT Consumption
 Private Consumption of the ICT Goods/Services has achieved the robust
growth since 1995
 However, its growth
rate is also converging
to 0% recently
(Source : Ju, J(2015). Trend Analysis of the Korean ICT Industries. KISDISTAT Report.
(KRW 1B)

21. 20
Growth of the Korea’s ICT Exports
 Exports of the ICT Goods/Services achieved the robust growth
 However, its growth rate
has turned into
negative figures
since 2014
(Source : Ju, J(2015). Trend Analysis of the Korean ICT Industries. KISDISTAT Report.
(KRW 1B)

22. 21
Computing Paradigm Shift : Emerging A.I.
 Computing paradigm is being shifted from programmatic to cognitive
– Cognitive computing can learn patterns from massive data, derive
hypotheses and test them with the minimum human intervention
– While programmatic computing can implement codified knowledge only,
cognitive computing can implement tacit knowledge as well.
(Source : Mobley(2014), How Watson Works, IBM.)

23. 22
AlphaGo Shock!!
 Artificial Intelligence competes with human champions in a complex
game that requires intuition, creative and strategic thinking
– An artificial intelligence program has beaten the world champion of
civilization's oldest games for the first time in history
• Go is a game of profound complexity with 1,000,000,000,000,000,000,000,000,000,000,000,
000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,
000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,
000,000 possible positions
– The match was played in Seoul, and AlphaGo ran through the Google Cloud
Platform with its server located in the United States

24. 23
Future of Employment
 According to the estimate by Frey and Osborne(2013), 47 percent of
the total US employment is in the high risk occupations that are
potentially automatable over a decade or two
– Educational attainment exhibit a strong
negative relationship with the probability
of computerization
(Source : Frey and Osborne(2013), p37. & p.41.)

25. 24
Future of Employment (Korea)
 If applied the probability of computerization estimated by Frey and
Osborne(2013) to the Korean employment statistics, 43~62% of the
Korean jobs is expected to disappear within two decades
– As of 2013, 24.6 million people are employed in Korea, and among them,
10.6 to 15.2 million jobs are vulnerable to be replaced by computerization
(Source : Lee, S.(2015), How Will The Emerging Technologies Change Industrial Landscape?: Cognitive Computing, STEPI, pp. 63.)

26. 25
Robot Revolution
 Computers & electronic products; electrical appliances& components;
transportation equipment; and machinery will account for 75 percent of
robot installations globally through 2025
– Two considerations will influence how widely robots are deployed in industries
• How cost-effective is it to substitute machines for human labor?
• And how easy is it to automate production tasks?
(Source : Sirkin, Zinser and Rose(2015), The Robotics Revolution, BCG, p. 13.)

27. 26
Robot Revolution
 South Korea, Taiwan, Indonesia, and Thailand have been installing more
robots despite still relatively low labor costs
– South Korea is installing robots at a pace that is about four times the global
average
– Robots in South Korea are projected to perform around 20 percent of tasks by
2020 and 40 percent of tasks by 2025 (estimated by Boston Consulting Group)
(Source : Sirkin, Zinser and Rose(2015), The Robotics Revolution, BCG, p. 13.)

28. 27
Abuse by Predictive Analytics
 Information asymmetry deepens as businesses have more data and
hence know more about consumers’ habits than they do.
 Predictive Analytics can lead to detailed targeting strategies
– Predictive analytics predict the future behavior of individuals while
forecasting makes aggregate predictions on a macro level (Eric, S., 2013)[
 However, predictive analytics may worsen the consumers’ welfare
if over-exploited by firms
– For example, a credit card company might know more about a consumers’
likelihood of not paying their bill on time than the consumer does.
– The business may then use this informational advantage to construct offers
or tariffs that the consumers will overvalue
(Source : UK BIS(2011), Better Choices: Better Deals – Consumers Powering Growth)

29. 28
I. Korea’s achievement in the past
II. Challenge of Emerging New Paradigm
III. Implications

30. 29
Potential Value of Smart Computing in Emerging Market
 Self-driving technologies can save not only labor costs but also capital
costs due to enhanced utilization of vehicles (as unmanned taxi)
– The cost of unmanned taxi is estimated to be only 39% of manned taxi
– This unmanned taxi cost is about 60% of the total cost of vehicle ownership
 Reducing the cost of mobility, along with new business and pricing
models, could make mobility more affordable for 1 billion people globally
– In emerging markets, people pay 42 to 58 percent of their income. Reducing
this ratio to 24 percent could sell 1 billion more vehicles and boost prosperity

31. 30
Indigenous R&D on new computing in East Asia
 East Asia tries to build capabilities to
respond to new computing paradigm
– Asian IT companies work on AI
research such as image recognition,
speech recognition, natural language
processing, robotics, and big data
– Public institutes try to apply A.I. to
improve public services
• Japan’s National Inst. of Informatics
researches on A.I. that can solve college
entrance exam
< Japan’s Todai Project >

32. 31
Designing Personalized Public Services
 Personalized public services can minimize costs while maintaining the
social welfare (i.e. maximizing value for money)
– Uplift modeling can model the incremental impact of a policy intervention on
an individual's behavior, and help governments to select beneficiaries and lead
to the highest value for money
– Designing personalized services can be
applied to various public services
including healthcare, education, welfare,
security, transportation, etc.
(Source : Milley, A. (2014.2.7.), SAS Blog)

33. 32
Empowering Citizens through the Access to Their Own Data
 Better access to information and data has the potential to transform
citizens’ lives and invigorate the economy
– Citizens need to be able to draw data from their credit, debit, and loyalty cards,
allowing them to understand how they spend on particular goods or services
• A breakdown of spending on food between restaurants, supermarkets and online to
having the weekly shopping basket helps consumers to find cheaper deals and
products or identifying healthier/greener alternatives
– The right information at the right time in the right form can lead to smart
consumption and ultimately happier lifestyle
(Source : UK BIS(2011), Better Choices: Better Deals – Consumers Powering Growth)

34. 33
Government-wide Responses Needed
 The comprehensive strategies to respond to the challenge of emerging
new computing paradigm should be developed
Proactive Strategies and Policies
Implications derived
from Future Foresight
 글로벌 기업이 원천기술 연구 강화 및
특허 출원 확대; 한국의 의존도 상승
Techn
ology
Emplo
yment
Indus
try
Barrie
rs
Prom
oters
 한국 기업•공공 모두 특정분야에 투자중복 R&D
Policies 선진국은 4세대 R&D 등 미래기술 준비
 암기식 교육과 실무 경험의 효용 감소
 인지컴퓨팅 전문인력 양성 확대 필요
 일반인 대상 인지컴퓨팅 교양교육 필요
 인지컴퓨팅이 해결하기 힘든 과제 존재
 인지컴퓨팅의 플랫폼화로 대•중소기업
모두 위험하며 비즈니스모델 혁신전략 필요
 인지컴퓨팅이 확장하며 사물인터넷과 결합
 벤처기업들도 니치시장에서 맹활약
 대기업•벤처기업의 협력생태계 조성 필요
 특허전쟁 리스크 대비 필요
 인공지능의 해킹에 대비한 보안강화 필요
 알고리즘 책임성의 검증방안 준비 필요
 윤리적ㆍ법적 판단능력의 학습이 필요
 공공연구가 민간과 중복이 크고 협력 미흡
 일본과 중국은 인재와 데이터의 우위
 SW인재양성 계획은 코딩 교육에만 치중
 이해당사자 갈등을 조정할 산업정책 부재
 데이터 획득의 사전규제 완화 필요
 공공서비스에 인지컴퓨팅 활용 미흡
 규제/공공서비스에 전향적 기술 수용 필요
 노령화 시대의 인지능력 증강 수요에 대비
 개방형 협력을 통해 기초연구 투자를 확대
 기업과 대학ㆍ연구소 사이의 중개 강화
 뇌과학 연구와 연계한 융합연구 확대
 교육 커리큘럼 개혁 : 디자인 사고 교육 등
 인공지능 수능시험 프로젝트 수행
 사물인터넷 사업에서 인지컴퓨팅 투자확대
 SW인재양성 계획에 인지컴퓨팅 교육 포함
 국내/아시아 시장 대상 서비스 개발 지원
 벤처기업의 연구 및 데이터 획득 지원
 대기업과 창업기업이 상생생태계 조성지원
 알고리즘책임성 가이드라인/검증방안 마련
 법의 취지에 대한 기계학습 연구 수행
 개인정보보호 규제의 선별적 완화
 인지컴퓨팅을 활용한 보안 기술 개선
 공공부문에서 인지컴퓨팅 연구/활용 확대
 4세대 R&D의 거점을 구축해 체계적 지원
 인지컴퓨팅 및 기계학습 전문가 양성 확대 Education
&
Employme
nt
Policies
Industrial
Policies
Regulato
ry
Reform
Public
Demand
 공공부문의 비즈니스모델 혁신 연구
(Source : Lee, S.(2015), How Will The Emerging Technologies Change Industrial Landscape?: Cognitive Computing, STEPI, pp. 154.)

35. 34
The End