[AI Hegemony War Korea's Winning Move] Korea's Talent Development System Weak... Policy Preparation Needed

The essential condition for surviving the future technology hegemony war is securing talent. Since capital, technology, and manpower must come together to produce innovative technology, tailored talent development is the core of competitiveness. However, South Korea is evaluated to have a weaker talent development system compared to advanced countries. There is a severe shortage of specialized talent, causing small and medium startups to struggle with a 'labor shortage.' Moreover, core talent continues to be drained overseas. From now on, focus must be placed on establishing proper policies for talent cultivation.

SMEs and Startups Hiring 365 Days a Year

According to the 'Artificial Intelligence Industry Survey' released by the Software Policy Research Institute under the Ministry of Science and ICT, 71.2% of AI businesses are experiencing difficulties due to a lack of manpower. Startups and small and medium enterprises (SMEs) are especially struggling. They say they are 'hiring 365 days a year.' Last year's survey showed that 63% of venture companies perceived the supply of software personnel as 'difficult' (survey by the Ministry of SMEs and Startups).

Even if they want to utilize 'ChatGPT,' the chronic shortage of development personnel makes it difficult. For example, e-commerce startup Company A recently posted a job opening to hire developers to integrate generative AI features. However, the applications received were mostly from low-skilled developers who were not ready to be immediately deployed in the field. Ultimately, they gave up on proceeding with the project internally and decided to outsource the development to an external company.

Even when they manage to find a 'precious' AI developer, it is common for them to be quickly poached by other companies offering better conditions. It is not easy to retain developers who move for better treatment. In a survey targeting venture companies, more than half of respondents said that turnover and resignation rates among experienced developers were higher compared to other job categories.

Among developers, there is a perception that moving to a larger company proves one's competitiveness. Startups and venture companies are seen as 'career ladders' for moving to companies with better conditions. In a survey of startup employees conducted by Startup Alliance last year, 22% of respondents named large corporations as their top choice for job change. In a survey by the Ministry of SMEs and Startups, large corporations were the most preferred employers among software job seekers. Only about 4% expressed willingness to work for SMEs or venture companies.

Recently, the decrease in venture investment has also exacerbated difficulties in securing AI talent. Many startups and venture companies are facing financial hardships, making it difficult to afford high salaries for excellent AI personnel. Among startups, those in the early stages that have not secured investment find it even harder to recruit AI talent. Jaewon Kang, a research fellow at the Korea Institute of Startup & Entrepreneurship Development, said, "With the so-called venture investment winter approaching, the chronic shortage of excellent personnel in startups and venture companies is expected to worsen."

Talent outflow is a common issue worldwide. According to a report released by the National Science and Technology Human Resources Development Institute, about 35 out of every 10,000 domestic AI technology personnel left the country in 2019. This trend has continued for several years. Recently, Microsoft (MS) in the United States has been promoting a plan to relocate AI experts working in China to Canada, aiming to prevent losing core talent to China.

Strengthening Future Talent Development Systems

The chronic manpower shortage is due to the low supply itself. Although AI-related departments and graduate schools have been established in universities in recent years, their expertise is insufficient for immediate deployment in the field. According to the 'AI Index 2023 Report' published by Stanford University's Human-Centered AI Institute, South Korea ranks 7th globally in AI capability possession. Workers in India, the United States, and Germany have relatively superior AI capabilities. The ranking of AI capability possession by country is India (3.23), United States (2.23), Germany (1.72), Israel (1.65), Canada (1.54), United Kingdom (1.54), South Korea (1.22), Singapore (1.37), and so on. AI capability possession rate is calculated by comparing the average AI capability level of workers in a given country to the overall average of the same occupational group. An AI capability possession rate of 1.5 means that the average AI capability level in that country is 1.5 times the overall average for the same occupation.

There is a growing call to strengthen future talent development systems. Major countries worldwide are working to establish a foundation for talent cultivation through systematic education from elementary and secondary levels and to foster digital literacy for children who will live in the future era. South Korea ranks 9th out of 15 countries in the implementation level of information and computing education, which is below average.

According to a report analyzing the international implementation level of elementary and secondary information computing education by the Software Policy Research Institute, the United States showed the highest level of information computing education implementation, followed by Australia, New Zealand, the United Kingdom, and Denmark. Hanseong Kim of the Software Policy Research Institute said, "There is a need to strengthen education policies to cultivate a sense of responsibility toward digital technology," adding, "Perceptions and attitudes toward digital technology rank in the lower tier among 15 countries."