Recommendation Letter.
With the AI era now fully underway, the report Google and Korea: Accelerating Creativity and Innovation Through AI offers timely and valuable insights. By moving beyond technological potential to present concrete case studies and empirical analysis, the report highlights how AI can address real-world challenges and drive economic outcomes in Korean society.
What is particularly noteworthy are the practical collaboration cases between Korean companies and Google. The integration of Google’s Gemini into Samsung’s Galaxy line of smartphones; LG’s EXAONE 3.5 model, which improved processing efficiency by 56% while reducing operating costs by 72%; Kakao’s AI-driven healthcare innovations; and the international expansion efforts of startups such as Smoretalk’s Flamel and STRA’s Kpop Pro are particularly noteworthy.
The report also projects that advances in AI translation technology could improve the global accessibility of Korean-language content, opening the door to an audience of more than 3 billion new users. This presents new growth opportunities for Korea’s cultural industries. Despite representing just 0.6% of the global population, Korea accounts for 4% of global app downloads and 6% of app revenue—showing the country’s powerful synergy between technology and creativity.
Furthermore, the report highlights a disparity in AI adoption, proposing actionable support measures such as the Google Play ChangGoo Program, the Google for Startups Accelerator, and AI skilling initiatives aimed at narrowing this divide.
Against the backdrop of Korea’s evolving economic landscape, including industrial diversification, declining productivity, and demographic shifts, this report also offers valuable insights into the use of AI. The projection that AI could also positively impact Korea’s exports over the next decade underscores the importance of adopting AI technologies.
In this regard, this report will serve as a practical and comprehensive reference for policymakers, business leaders, and creators seeking to advance Korea’s sustainable development and strengthen its global competitiveness in the age of AI.
Professor Yong Suk Hwang
Konkuk University
Foreword.
Korea is exceptionally well-positioned to accelerate the adoption of artificial intelligence (AI), thanks to its world-class ICT infrastructure, highly educated population, and a society that embraces new technologies with enthusiasm. While the United States and China have solidified their positions as AI superpowers, Korea is actively working toward joining their ranks by pursuing its vision of becoming a global “G3” leader in AI. AI represents more than just technological innovation; it is expected to become a central engine of economic growth by supplementing traditional factors of production, such as labor and capital, and by enhancing total factor productivity (TFP).
In the domestic labor market, AI boosts individual worker productivity via task automation and intelligent assistance, leading to broader gains in national economic efficiency. For example, an average worker’s use of AI-powered tools like Google Search or Google Workspace can contribute to productivity gains through reduced labor hours, which can be assessed as an annual economic benefit of KRW 40 trillion in the Korean economy.
AI is also a powerful enabler for expanding Korea’s global economic reach. Korean cultural content, including Kpop, television dramas, and cuisine, has already captured international attention. AI-driven technologies such as real-time translation and speech synthesis are helping Korean-language content overcome language barriers, making it accessible to more than 3 billion non-Korean-speaking consumers worldwide.
Yet technological advancement alone does not automatically generate economic value. The diffusion and integration of AI technologies depend not only on technical progress but on the presence of robust institutional frameworks, high-quality human capital, and adaptable industrial structures. Therefore, strategic policy responses are essential to realize AI’s economic potential.
First, Korea must strengthen its human capital through widespread AI literacy education and job-specific retraining programs. Second, regulatory frameworks should be made more flexible to facilitate the integration of AI into various industries, alongside institutional incentives that encourage experimentation with emerging technologies. Third, both public and private support should be expanded to improve AI access for small and medium-sized enterprises (SMEs) and startups, thereby strengthening the broader innovation ecosystem. Fourth, the government must increase national-level investment in high-performance computing and large-scale AI model development.
AI is no longer a discretionary option; it is a strategic imperative that will shape the trajectory of Korea’s future economic structure. To enhance the resilience and long-term competitiveness of the Korean economy, the time has come to adopt a national strategy with AI at its core.
Professor Minki Kim
KAIST College of Business
Introduction:
The AI Opportunity.
Korea is one of the most innovative and creative economies in the world.
Global R&D leader.
The country has the second highest share of Gross Domestic Product (GDP) spent on research and development (R&D) of OECD countries.3
Global tech companies.
Samsung, LG, and Hyundai, global technology powerhouses originating from Korea, are key drivers of the AI revolution, especially in the domain of cutting-edge hardware.
Creative influence.
The country’s media and entertainment industries are growing Korea’s international reputation. From Academy-award winning film Parasite to girl group sensation LE SSERAFIM, the sector’s revenue reached an all-time high of KRW 150 trillion (USD 114 billion) in 2022.4
Boosting innovation, creativity and productivity further can help Korea address wider economic challenges.
Challenges
AI Solution
Korea’s economy has traditionally been highly dependent on high tech manufacturing. Other sectors have lagged behind, with productivity in Korea’s service sector only 45% of manufacturing productivity, compared to an 85% in OECD peers.5
AI will supercharge Korea’s creative sector.
AI will help Korean companies in the creative sector build on their already rapidly growing cultural influence, further expanding Korea’s global reach, and make it easier for the country to develop new services.
SME productivity is only about a third of larger firms, one of the largest gaps in the OECD – and have traditionally lagged behind in adopting new technology.6
AI will power a new generation of Korean startups.
AI will enhance the competitiveness of smaller companies, creating spillover value for the wider economy.
While Korean workers put in some of the longest hours, productivity per hour is one of the lowest in the OECD. The economy has suffered from falling productivity over the last few decades; a problem that is likely to be reinforced by Korea’s aging population.7
AI will boost workers’ productivity across Korea.
AI will enable workers to reallocate their time to higher-value work, helping businesses become more agile and responsive.
Note: All data points, unless otherwise specified, are derived by Public First’s own research & modelling. These are estimations, and the figures have been rounded up.