KITA News and Reports
  • AI Technology Lead 4th Industrial Revolution Business Model in Korea
    2018-02-06

     

    AI Technology Lead 4th Industrial Revolution Business Model in Korea

    - Improving productivity and providing evolved services in medical and manufacturing fields by accumulating and utilizing data -

    - KITA report points out Korea’s technology level and industrial base are weak despite the rapid expansion of market size -

     

    The activities to develop business models utilizing AI (Artificial Intelligence), the representative technology of the 4th Industrial Revolution, are widely spreading in Korea.

     

    According to a report titled 'Korean Companies’ Business Models Using Artificial Intelligence (AI)' published by the Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association, recently, Korean companies have been further promoting fundamental changes in business models as they are utilizing AI when making decisions regarding production, marketing, distribution, etc. In particular, data-driven decision making using AI is rapidly replacing traditional decision making processes based on managerial experience and intuition. As the accumulation and utilization of data are becoming as important as technologies of products, management resources such as funds are being intensively put into them. In addition, customized marketing and services reflecting the individual needs of customers are being demonstrated through AI technologies.

     

    In the field of medical and healthcare, artificial intelligence analyzes various medical data in a comprehensive manner, proposes individual treatment methods, assists the diagnosis of medical staffs, and suggests the probability of individual onset and health management method. In the manufacturing sector, artificial intelligence has learned many cases of defects through machine learning technique, and it has enabled to reduce the defective rate and improve the quality. In the field of logistics, artificial intelligence suggests the optimum path by identifying the congestion at specific time and specific areas. In the marketing industry, artificial intelligence accumulates and analyzes data of personal behavior patterns and uses the data to provide one-to-one customized services. Moreover, in the fields of law, finance, and education, artificial intelligence shortens the time to process and organize the data to be analyzed by human. In the field of autonomous navigation, artificial intelligence has been evolving into a mobility service in which a vehicle itself is becoming a business platform beyond a simple autonomous transportation phase.

     

    On the other hand, the industries related to AI are expanding at a rapid pace. However, it appears that there is a big gap between Korea and major developed countries in terms of AI technology. The global market size of cognitive artificial intelligence system market is expected to reach 47 billion dollars in 2020 from 8 billion dollars in 2016. The size of the artificial intelligence industry in Korea is expected to expand rapidly from 5.4 trillion won in 2016 to 11.1 trillion won in 2020, at an annual average of 19.7 percent. However, the country’s technology level is inferior to that of Japan and the US. Korea’s technology level of artificial intelligence is 73.9, which is 2.2 years behind the United States (standard: 100 in 2016) and similar to that of China (71.8)

     

    Shim Hye-jung, a senior researcher at the institute for International Trade of KITA said, "Unlike other major advanced countries, Korea does not have whole of government master plan in the field of artificial intelligence. Therefore, it is difficult to carry out a large-scale AI project, and also we are still at a very early stage in fostering human resources as well as establishing special research centers." The researcher pointed out, "It is urgent for Korea to expand the industrial foundation in order to bridge the technological gap between itself and the developed countries and improve technology."

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