[The Editors' Verdict] Bridging the Gap Between Government and Market in the Digital Era

"The world before COVID-19 will never return." This phrase, which recently appeared in the media, resonates heavily as the year ends. COVID-19 has transformed many aspects of our society. According to data released by the Korea Development Institute (KDI), employment shocks during the COVID-19 period varied depending on the possibility of remote work and other non-face-to-face labor. Jobs that made non-face-to-face work difficult showed increased costs. This suggests that the advancement of digital technology will accelerate as a way to replace costly face-to-face labor in the future. Next year, the influence of digital technology is expected to grow not only in jobs but also across education, society, and culture. The term "digital," which was previously limited to the realm of technology before COVID-19, is becoming the central axis leading the industrial paradigm.

This year was a year of laying the groundwork for the development of the digital industry, including the establishment of national infrastructure such as 5G, discussions on fair competition within the market, and the enactment of the Basic Data Act. In the new year, discussions on how to effectively utilize digital resources must take place alongside proper consultations between the government and the market. Through this, not only can the digital industry be revitalized, but the digital utilization of all industries can be strengthened to enhance national competitiveness.

There are important factors that must be considered in the policy-making process next year to create a new turning point for the digital industry. A long-term plan for promoting the digital industry and effective implementation strategies are representative examples. On June 8 last year, the U.S. House of Representatives passed the U.S. Innovation and Competition Act, a package bill that includes investing a massive budget over the next five years in future technology fields. The U.S. demonstrated a strong will to maintain its advantage in global competition by utilizing this law.

To survive in the global competition of innovative technologies, Korea must also promote digital technology development based on a long-term plan. In particular, discussions on policies that match the speed of market development are urgently needed. A frequently pointed-out issue in digital technology development and utilization has been policy delays or gaps between the market and policy. A representative example is the amendment to the Passenger Transport Service Act, known as the "Tada Ban Law," which passed the National Assembly in March last year. Tada, which emerged in 2018, was an innovative platform that connected consumers with rental cars driven by drivers using 11-seat Carnivals, but it disappeared into history due to opposition from the existing taxi industry labeling it as a "quasi-call taxi" and controversies over illegality. Harmony between the market and policy will provide clear incentives for participants in the digital industry.

Another important element in the industrial paradigm led by the digital industry is data. So far, Korea's data economy has focused on building data utilization cases and securing public interest in various fields such as industry and public sectors. From next year onward, the data economy should emphasize utilization capabilities rather than the volume of data or advantages through data monopolies. The market structure must be improved to strengthen the capabilities of data-holding companies while providing economic incentives for startups specialized in analysis and utilization to enter the market.

Lastly, a scenario regarding the direction of digital industry evolution suitable for Korea's individual circumstances and realities must be considered. "What to do" is determined by "which direction to take," and based on this, Korea's digital industry strategy should be established. In the new year, it is hoped that the country's competitiveness will be significantly enhanced through a breakthrough improvement in the competitiveness of the domestic digital industry.

Shin Minsu, Professor, Department of Business Administration, Hanyang University