In the Trump and China era, South Korea must move beyond export-led growth. Scaling up small firms and boosting productivity in services must be national imperatives.

Policymakers in South Korea are weighing a raft of digital market provisions inspired by the EU’s Digital Markets Act. Their goal is to rein in allegedly anticompetitive practices by Big Tech firms. But the proposed interventions are unwarranted and risk harming innovation, straining relations with the United States during uncertain times, and opening the door to China.

Korea has entered the global top four economies in innovation, powered by world-class research intensity and corporate R&D. Amid a persistent input–output gap and weak startup M&A activity, the challenge now is scale: converting knowledge into globally competitive firms.

Korea has a choice. It can show the world how to integrate strategy, promotion, and regulation in a way that builds both trust and competitiveness. Or it can serve as a cautionary tale of how regulatory overreach strangles innovation.

By uniting strategy, promotion, and regulation in a single law, South Korea has given itself a powerful instrument to shape AI—but its blunt regulatory mandates threaten to drag down the very strengths that make the act ambitious.

Korea needs stronger domestic policies to shore up its advanced industries, such as restoring a robust investment tax credit and expanding its weak R&D tax credit. But without working with allies, Korea will not win versus China.

If Korea wants a won stablecoin that matters, give it work on day one: Settle spot ETF trades; connect to tokenized securities (STO); cut remittance costs; and settle cross-border B2B invoices in KRW with fewer hops. Without real uses, the token drifts into speculation.