"Japan Wants a 'Second LINE', Korea Eyes a 120 Million Market" [Korea's Great Transition, Korea-Japan Future Cooperation]

60 Years of Korea-Japan Relations: From Diplomatic Ties to Future Partners
Expanding Cooperation Across Real Industries
Healthcare, Bio, and Energy Sectors in Focus

On the occasion of the 60th anniversary of the normalization of diplomatic relations between South Korea and Japan, analysts suggest that the two countries should build an economic community through division of labor and cooperation based on their respective strengths. There are expectations that technological collaboration linking Japan's demand for artificial intelligence (AI) and digital transformation with Korea's proven capabilities could extend into real industries such as healthcare, bio, and energy, similar to how 'LINE' became Japan's national messenger platform.

Kim Gyupan, Senior Research Fellow at the Korea Institute for International Economic Policy, said on June 23, "The field in which Korea can provide substantial assistance to Japan is AI transformation (AX)," adding, "Korea's proven experience in digital transformation (DX) can play a positive role in complementary cooperation with Japan."

Lee Jipyung, Professor at the Department of Convergence Japanese Studies at Hankuk University of Foreign Studies, mentioned the case of 'LINE', stating, "If Korea's digital technology is demonstrated locally and linked to institutional frameworks, a structure could naturally develop where the Japanese market accepts it." The messenger 'LINE', which rapidly gained popularity in Japan right after the 2011 Great East Japan Earthquake, was created using technology from Korea's Naver. It remains a major platform used by 80% of the Japanese population. This is considered a representative example of Japan supplementing its digital infrastructure with external technology and demonstrates the potential for Korea-Japan cooperation. Japan's active acceptance of external technology in the past suggests that collaboration could expand beyond digital platforms into real industries such as healthcare and bio.

Korean medical AI company Lunit is collaborating with Japan's Fujifilm to introduce AI image diagnosis solutions centered on hospitals. The company is expanding demonstration opportunities in Japan to meet the demand for early dementia diagnosis in response to population aging. While Japan has well-established systems and infrastructure, its diagnostic technology is relatively weak. Analysts believe that cooperation with Korean companies could provide practical support for hospitals transitioning to AI-based diagnostic systems. Considering the genetic similarities and disease characteristics of the two populations, joint development and clinical demonstrations could serve as a means to lower initial entry barriers. The presence of many skilled medical professionals in Japanese regional hospitals is also expected to provide a foundation for medical technology exchange.

The bio sector also holds significant potential for cooperation. While Japan has strengths in regenerative medicine and rare disease treatment technologies, it is relatively weak in mass production and commercialization processes. Korea, on the other hand, has strengths in bio-production infrastructure and applied technologies, as well as a flexible, venture-driven development system. Some Korean bio companies have signed agreements with Japanese hospitals to simultaneously conduct technology demonstrations and insurance linkage procedures, a model that is attracting attention for shortening the path to institutional entry and monetization.

There is also an urgent need for role-sharing cooperation in the development of next-generation products in the energy and materials sectors. A representative example is solid-state batteries. Japan excels in materials and basic technologies, while Korea has strengths in cell and mass production technologies. Professor Lee explained, "In important fields such as solid-state batteries and hydrogen fuel cells, which are significant in the mid- to long-term, role-sharing is possible."

The symbolic significance is also great in the case of Hyundai Motor and Toyota pursuing technical cooperation in hydrogen vehicles. Hydrogen is linked to various industries such as city gas, steel, and petrochemicals, so joint use of ships and storage facilities is also being considered.

There is also considerable potential for cooperation in stabilizing supply chains. Korea and Japan are considering scenarios for cooperation at all stages, including joint development of mines in third countries such as Australia, as well as raw material transportation, processing, and reprocessing. As China rapidly secures key technology patents and strengthens its expansion strategy based on scale, the need for a joint response is also growing. Professor Lee emphasized, "With China holding a significant share of technology patents, Korea and Japan should jointly design research and development (R&D) and patent strategies, at least for next-generation technologies."

Discussions are also expanding in terms of energy security. Considering the case where US President Donald Trump proposed LNG (liquefied natural gas) purchases to both Korea and Japan, in the long term, an energy bloc concept could be considered to strengthen supply-demand stability and price bargaining power. Professor Lee stated, "Energy is a field where economies of scale operate," adding, "If Korea and Japan establish a joint import strategy, the impact of energy diplomacy could also increase." As energy price volatility rises due to geopolitical risks, strategic cooperation among energy-consuming countries is emerging as an essential response measure.