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Education Industry Trembles After Investing Hundreds of Billions Amid New Administration

AI Textbooks Face Uncertain Status Amid Administration Change
Education Industry That Trusted Yoon Administration Faces Obstacles in Recovering Investments
Democratic Party: "Will Announce Position After Further Discussion"

With the inauguration of the Lee Jaemyung administration, anxiety is growing within the education industry, which has been developing artificial intelligence digital textbooks (AI Textbooks, AIDT). This is because there is an increasing possibility that AI textbooks may lose their status as "textbooks" due to the change in administration. There are also concerns that education companies, which have not yet recouped their investments, could face serious management crises. Under the policies of the Ministry of Education during the Yoon Sukyeol administration, companies poured massive development funds into AI textbooks, viewing them as an opportunity amid the structural crisis of a declining school-age population. Now, however, they are faced with the aftermath.


According to political sources on June 4, President Lee Jaemyung announced in the Democratic Party of Korea's policy pledge booklet, released on May 28, one week before the presidential election, that AI textbooks would be reclassified as "educational materials" rather than textbooks, and that schools would be given the autonomy to choose whether to adopt them. The intention is to resolve the confusion in schools caused by the hasty introduction of AI textbooks under the Yoon Sukyeol administration. Instead, the new administration also plans to establish a public platform that will allow the use of various online learning contents (courseware).

Education Industry Trembles After Investing Hundreds of Billions Amid New Administration

In December of last year, the Democratic Party of Korea unilaterally passed a revision to the Elementary and Secondary Education Act reflecting these changes, citing concerns over digital overexposure and insufficient preparation in the field. However, Deputy Prime Minister and Minister of Economy and Finance Choi Sangmok exercised his veto, so AI textbooks retained their textbook status and were introduced into schools starting in the first semester of this year. However, since adoption was left to the discretion of individual schools, as of March, the adoption rate of AI textbooks in elementary, middle, and high schools nationwide was only 32.4%.


Amid this situation, with speculation rising that the relevant legislation may be revived due to the change in administration, the education industry is gripped by anxiety. If AI textbooks are designated as "educational materials," they would be classified as supplementary rather than mandatory textbooks, undermining the stable revenue structure that companies had anticipated. An official at an AI textbook development company stated, "The Ministry of Education explained that mandatory adoption of AI textbooks would guarantee revenue based on the number of students, but with voluntary adoption, profitability was lower than expected. If they are downgraded to educational materials, it will become even more difficult to recover development costs, which will inevitably cause damage."


Regarding this issue, Kim Youngho, a Democratic Party lawmaker and chairman of the National Assembly's Education Committee, said, "Can the previous administration unilaterally push forward with AI textbooks, which 80% of parents oppose, and cause such damage to companies? I anticipated these problems and even held Minister of Education Lee Jooho accountable during the standing committee." He added, "I fully agree that minimizing damage to companies is very important."

Education Industry Trembles After Investing Hundreds of Billions Amid New Administration Jung Park and the CEO of Cheonjae Textbook expressed their positions at the joint press conference titled "Urging the Maintenance of Textbook Status for AI Digital Textbooks," held on January 13 at the Irum Center in Yeouido, Seoul. Photo by Yonhap News

Companies selected for AI textbook projects are already cornered. Cheonjae Textbook, Visang Education, and Icecream Edu have suffered from poor performance and carried out large-scale restructuring earlier this year, while Woongjin ThinkBig has withdrawn from the business altogether. Companies that trusted the Yoon Sukyeol administration's policy of full-scale AI textbook adoption and invested tens to hundreds of billions of won in development without government support now find themselves on the brink due to low adoption rates and policy confusion.


The ruling party has yet to clarify its position. Baek Seungah, chair of the Education Committee of the Democratic Party's Central Election Committee's Meoksanism Committee, said, "Nothing specific has been decided regarding AI textbooks at this time, and we will announce our position after further discussion."


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