[In-Depth Look] At the Crossroads of the Data Economy

The 'Data 3 Laws' have finally passed the National Assembly after a long 14 months. Although delayed, the enactment of these 'Data 3 Laws' marks a significant first step for South Korea to enter the data economy. More specifically, it establishes a legal basis for the legitimate use of pseudonymized and anonymized personal information, and it consolidates the previously scattered personal data protection regulations across multiple laws into a unified regulatory framework.

Now, we must incorporate data into future growth industries such as artificial intelligence (AI), the Internet of Things (IoT), and mobility to create a new convergent ecosystem. Within this ecosystem, information and communication technology (ICT), finance, location information, manufacturing data, bio information, and telecommunications data will combine vertically and horizontally, giving rise to many new industries and startup companies. The creation of new jobs is a natural outcome.

Among the three pillars of the Fourth Industrial Revolution?data openness, artificial intelligence, and cloud environments?data is the most fundamental element. AI technologies can only operate if usable data exists, and data is shared and connected through cloud environments. Moreover, considering that 70% of the world’s top 10 companies and 70% of global unicorns and startups base their businesses on data, data has already emerged as an absolute factor determining corporate competitiveness. Since the Obama administration announced the 'Big Data R&D Initiative' in 2012, the United States has declared its commitment to fostering the data economy. Advanced countries such as the EU and Japan have also actively supported corporate data collection and utilization, striving to secure future technology competitiveness in AI and cloud computing while revising related legal frameworks.

The United Kingdom is pursuing a plan to create 200,000 youth jobs through the development of data-related industries, while China aims to train 1.5 million big data professionals by 2022. China’s data volume is as unparalleled as its population and market size. The amount of mobile payment data generated by individuals, which can be directly commercialized, even surpasses that of the United States.

"South Korea seems unable to mine its goldmine of big data," said Tom Davenport, a professor at Babson College in the United States. Despite having better digitalization of data and related infrastructure than any other country, this comment pointed to South Korea’s situation where the use of any personal information?whether pseudonymized or anonymized?was prohibited.

The Korea Venture Business Association identified data and cloud regulatory innovation as the first of five prerequisites for national innovation back in 2017. They judged that without amending the Personal Information Protection Act, which requires prior consent from individuals for any use of personal data?whether pseudonymized or anonymized?South Korea’s entry into the Fourth Industrial Revolution would be impossible.

Global IT companies, backed by powerful services and their governments’ nurturing policies, have been racing to establish platforms and secure data worldwide, including in South Korea. Meanwhile, South Korea’s refusal to allow any use of personal data brought the country to the brink of losing data sovereignty.

Although the 'Data 3 Laws' have passed the National Assembly, much remains to be done. The venture industry still has many concerns about the revised bill. Commercial use of data was not explicitly stated, detailed principles for data storage, analysis, and processing were not established, and there are lingering worries about the identity of the Personal Information Protection Commission as the integrated supervisory body. Additionally, the opening of public information and the rapid establishment of cloud environments remain tasks to be addressed separately. Strong opposition from some civic groups concerned about personal data infringement is expected to intensify. The speed at which we move toward a data economy could determine South Korea’s success or failure in the Fourth Industrial Revolution. The gap in the data industry between South Korea and the advanced countries it must compete with is already five to six years wide.

Lee Jung-min, Head of Management Support Division, Korea Venture Business Association