[Insight & Opinion] What Is Blocking Digital Transformation

Digital transformation is a major challenge ahead of us. Every part of the nation must be redesigned using digital technology. Administration, military, education, healthcare, finance, production, and even agriculture can no longer be discussed without digital technology. At this critical moment, there is no certainty whether our country can successfully achieve digital transformation.

It is said that 80% of innovations fail because of people. The same applies to digital transformation. Who can actually accomplish this task? Except for some companies in the private sector that maintain a global standard, there is little trust in both government ministries and the private sector.

First, we cannot help but point out the indifference or ignorance of the top executives (leaders). Even if they want to be interested, most of the time they do not know enough and leave the responsibility to the working-level managers.

During the same period as former President Kim Young-sam, Bill Clinton and Al Gore, who ran for the U.S. presidency, introduced the “Information Superhighway” strategy. Unlike our president, who had never even seen a computer during university, they belonged to a generation educated with computers in their 40s and presented a differentiated vision in their strategy. It is no exaggeration to say that this strategy laid the foundation for the United States becoming an IT superpower today.

At this point, emphasizing digital transformation, it seems that the situation from 40 years ago is being repeated. It is unclear how many among the president, government leadership, and corporate CEOs understand and have the ability to promote the nation’s digital transformation.

Meanwhile, the working-level staff in all organizations also show limitations in their capabilities. Conversely, if someone had sufficient ability, they would not remain in mid-level positions in government or companies. Thus, the top does not fully understand and leaves everything to the working-level, while the working-level lacks the ability (not only technical skills but also drive).

Even if there is technical ability, the limits of authority and status within the organization are also problematic. Government organizations need to be changed, local administrative systems need to be reformed, educational institutions need to be reorganized, business areas and methods of companies need to be altered, healthcare service delivery systems need to be changed, and even military operational systems need to be transformed. The question is, who holds such authority?

Government regulations and vested interests or resistance in each sector are also obstacles. As is well known, one of the factors holding back national competitiveness is the “burden of government regulation.” It ranks as low as 70th to 80th place. Every government has declared its intention to resolve regulations for decades, but whenever incidents, accidents, disasters, or issues arise, regulations actually increase. Moreover, when trying to attempt something new, the country becomes immobilized by resistance from sector-specific entrenched groups.

Decisions that can change the fate of the nation must be made decisively by political power without worrying about votes or approval ratings. Such a decision must be made, even if it means overcoming resistance, like French President Emmanuel Macron. It is ironic that major decisions affecting the fate of the Republic of Korea were often made during the military dictatorship era, when the entire nation resisted.

Compared to the tremendous speed of digital technology development, Korea’s acceptance level remains at the bottom. The government should not only emphasize technology development or support but must first create an environment that can accept new technologies and business models. If the country becomes one where new technologies are well accepted, the private sector will naturally develop technologies without government intervention.

Kim Hong-jin, CEO of Work Innovation Lab