"South Korea Ranks 23rd Among 63 Countries in Digital Regulation... Improvement Needed"

Martial Arts, Hosts '2023 Digital Initiative Seminar'
Vice Chairman Jeong Manki: "Ranked 23rd in Digital Regulation Among 63 Countries"

Exterior view of the Trade Tower, Korea International Trade Association, Samseong-dong, Gangnam-gu, Seoul. (Photo by Korea International Trade Association)

[Asia Economy Reporter Moon Chaeseok]

"This year, South Korea ranks 8th out of 63 countries in digital competitiveness. It is 1st in new technology adaptability, 2nd in business capability, and 3rd in science and technology. However, it ranks only 23rd in digital regulation."

Jung Manki, Chairman of the Korea International Trade Association (KITA), emphasized the need to improve South Korea's digital regulations by citing the results of the IMD survey in Switzerland on the 6th. He made these remarks in the opening address of the 'Digital Initiative Seminar' held that afternoon at the KITA Trade Tower in Samseong-dong, Seoul, co-hosted by KITA and the Federation of Korean Information Industries (FKII).

According to the Organization for Economic Cooperation and Development (OECD) and the International Monetary Fund (IMF), the global economic growth rate is expected to remain in the 2% range next year. However, Gartner forecasts that global corporate software (SW) spending will increase by about 10%. It is expected to rise from $790 billion (approximately 1,036 trillion KRW) this year to $879 billion (approximately 1,153 trillion KRW) next year, an 11.3% increase. IT service spending is also expected to grow by 7.9%, from $1.25 trillion (approximately 1,639 trillion KRW) this year to $1.35 trillion (approximately 1,770 trillion KRW) next year.

Vice Chairman Jung stated, "The core innovation area for digital transformation is regulation," and pointed out that "numerous prohibitive or regulatory legislations such as the Tada Ban Act, the unconstitutional Rotok Ban Act, the Zigbang Ban Act, and metaverse regulation laws are obstructing our digital transformation." He added, "This will result in domestic companies being overwhelmed by foreign companies in these fields."

Vice Chairman Jung assessed that concerns about job losses following digital transformation are unfounded. On the contrary, if the pace of digital transformation slows, the competitiveness of the entire industry will weaken, potentially leading to reduced employment. He cited a Japanese study showing that for every additional robot per 1,000 workers, employment increased by 2.2%. In Spain, companies that introduced industrial robots between 1998 and 2016 saw employment increase by 50%, whereas companies that did not adopt robots experienced a 20% decrease.

Panelists participating in the seminar also emphasized the need to increase AI utilization. Jang Dongin, CEO of AIBB Lab, in his presentation titled 'AI and Business Strategy,' stressed, "It is important to start small, such as by introducing AI models in call centers, rather than setting grand goals from the outset." He added, "Benchmarking digital transformation cases within the same industry is crucial to getting started."

Kim Hyungtaek, CEO of the Digital Initiative Group, presented on next year's digital marketing and communication trends. Kim said, "Due to the recent economic downturn, companies are expected to reduce marketing expenses next year. Additionally, Google plans to implement cookie restrictions within Chrome to protect personal information." He noted, "Digital marketing and advertising companies will need to devise new digital marketing methods."

There was also an opinion that ESG (Environmental, Social, and Governance) management must be addressed. Yang Heewon, Senior Researcher at the Korea ESG Standards Institute, in her presentation titled 'Sustainable Management through Digital-based ESG,' highlighted, "According to data from Morgan Stanley MSCI in the U.S., companies with high ESG management levels have lower inherent corporate risks and organizational risks compared to those with low management levels."

Senior Researcher Yang pointed out that companies are adopting a 'two-track' strategy, treating ESG and digital transformation as separate tasks, which leads to duplicated efforts in improving work processes. He said, "If digital transformation is utilized in ESG activities, data will naturally accumulate and can be leveraged, creating a synergistic effect."