[Ministry of Science and ICT Report] AI Development Taking Off with 5G Wings... Full Support for Media Industry

Supporting Innovative Growth Centered on Data, Networks, and AI
30 Trillion Won Investment in Public-Private 5G Convergence
Training 10,000 AI Experts by 2030, Including 1,000 This Year
Minimum Regulation Principle for Korean Content Companies

[Asia Economy Reporter Koo Chae-eun] The government’s decision on the 16th to focus on '5G and Artificial Intelligence (AI) expansion' in its innovation growth measures stems from the belief that the key to leading the Fourth Industrial Revolution lies in DNA (Data, Network, AI). While addressing previous criticisms of insufficient 5G investment tax credits, the government plans to strengthen nationwide and indoor coverage expansion, and aims to empower AI and big data industries by giving 5G a boost. Minister Choi Ki-young of the Ministry of Science and ICT stated at the briefing, "Based on Korea’s competitive edge in networks (5G) and content (Hallyu), we will become the top AI nation and a digital media powerhouse."

◆Expansion of 5G Convergence Services = The most notable government announcement is the plan to support 5G convergence services worth 30 trillion won over the next three years. If last year was the inaugural year of 5G commercialization, this year’s blueprint is to fill the 'container' called 5G with 'contents' such as AI and big data industries and expand the convergence market. Specifically, 6.9 billion won will be invested to discover business models and support commercialization for startups utilizing 5G, AI, and data.

5G investment incentives will also increase. The tax credit rate for the metropolitan area, previously 1%, will be raised to 2% starting this year, while the non-metropolitan area will maintain last year’s rate but add construction costs to the tax credit base. The government will also ease the registration license tax paid annually to local governments when reporting base station installations. Furthermore, 5G quality evaluations will be conducted twice a year, in the first and second halves, to promote 5G quality and coverage expansion among telecom operators. A total of 30 billion won will be invested in immersive content, which will benefit from 5G introduction, and 28 billion won and 7 billion won will be invested respectively in healthcare solutions and 5G-based emergency medical platforms. Lee Tae-hee, Director of Network Policy at the Ministry of Science and ICT, explained, "We will strengthen inter-ministerial cooperation to create a virtuous cycle ecosystem among content, platforms, and 5G."

◆Full Support for AI Talent and Ecosystem = AI efforts will focus on talent development and technology advancement as part of the 'AI National Strategy' announced last December. This year, programs at 12 AI graduate schools will be diversified, and 40 software (SW)-centered universities along with the Innovation Academy will be fully operational. The goal is to train about 500 people at AI graduate schools and 750 at the Innovation Academy this year. Minister Choi said, "Compared to countries like the U.S., Korea is significantly lacking in talent. We believe a small elite group is very important, so we plan to nurture 1,000 advanced professionals this year and are striving to cultivate a large number of AI specialists relative to our population."

The data industry, which underpins the AI sector, will be expanded to 10 trillion won, while a 300 billion won AI-dedicated fund will be established. From this year through 2024, a budget of 393.9 billion won will be invested to create an AI cluster in Gwangju. The AI fund will be used to invest in venture companies developing AI technologies. By 2029, a budget of 1.0096 trillion won will be allocated to actively develop next-generation intelligent semiconductor technologies, a core AI technology. The enforcement decree and follow-up measures related to the Data 3 Act, which supports AI industry growth, will be finalized within the first half of the year. To support the development of materials and components, whose vulnerabilities were exposed by Japan’s export restrictions, the R&D budget has been set at a record high of 24.2 trillion won, which is an 18% increase?double the government’s total expenditure growth rate of 9.1% last year.

◆Strengthening Support for Content and Platforms = In response to the aggressive moves of overseas content giants like YouTube and Netflix, the government will also support the domestic media industry ecosystem. The plan is to combine Korea’s world-class 5G network with Hallyu content to foster the media industry as a new growth engine. Specifically, domestic online video services (OTT) will be allowed to innovate under a de facto no-regulation principle. Regulations that apply only to domestic companies will be eliminated, while new regulations will be introduced for overseas companies where none currently exist, to ensure 'regulatory fairness.' To reduce the network usage fee burden on domestic content companies, the interconnection system will be revised, and market monitoring will be conducted to address unfair trade practices between YouTube, Netflix, and network operators. The Korea Communications Commission will supervise unfair practices through the 'Network Usage Fee Guidelines' effective from the 27th. Chairman Han Sang-hyuk of the KCC said, "We will establish policies to maintain fairness so that domestic operators are not treated differently compared to overseas OTT companies."