Asia-Pacific

Korea’s AI Action Plan reflects a positive shift by allowing the use of personal data without pseudonymization to improve AI performance, but it is undermined by a conflicting requirement to keep AI training infrastructure within domestic servers. This data localization rule risks isolating Korea’s AI ecosystem from global cloud resources, increasing costs, limiting innovation, and reducing competitiveness for both developers and consumers. The blog argues that Korea should adopt risk based, technology neutral safeguards instead of geographic restrictions to protect data while enabling globally competitive AI development.

Seventy percent of young Koreans hold university degrees. Only 14 percent of jobs are in large firms. The most immediate concern is not jobs disappearing due to AI, but that there are too few high-quality jobs in the first place.

While the Hyundai Motor case now sits at the center of Korea’s AI jobs debate, the evidence suggests that the nation’s more immediate constraints are weak productivity growth and uneven labor-market adjustment—not large-scale technological displacement. How Korea responds will shape its competitiveness in a high-cost, aging manufacturing economy under intensifying global competition.

After South Korea reduced its tax credit for automation in 2018 from 7 percent to 3 percent for large firms, South Korean industries, on average, reduced robot installations by 28 percent compared with their Japanese counterparts.

The Trump administration’s tariff pressure reflects a transactional shift in U.S. trade policy, linking reciprocity to investment execution, regulatory predictability, and geopolitical alignment. Korea can adapt to this new playbook or absorb the economic consequences.

The House Judiciary Committee has launched an investigation into South Korea's discriminatory targeting of U.S. tech companies, particularly Coupang, marking an important escalation in Washington's pushback against non-tariff attacks that use regulatory measures to weaken American technology leadership. These attacks—which have cost U.S. tech companies over $30 billion globally in the past decade—disproportionately target American firms through fines, operational restrictions, and forced infrastructure investments while creating openings for Chinese competitors.

The Korea Fair Trade Commission's past enforcement against U.S. technology firms justifies concerns that the proposed Fairness Act will reflect de facto discrimination against American commerce.

The ACCC should accept Epic and Google’s application to settle their longstanding antitrust litigation, and Australia need not be concerned that the flawed catalog-sharing remedy in the United States is not a part of it.

Cloud computing, artificial intelligence (AI)-based tools, digital advertising, e-commerce platforms and online human resources systems have become the most practical way smaller firms close the capability gap with larger competitors.

South Korea’s record $700 billion in exports in 2025 is an achievement. But relying on a narrow set of export champions while limiting imports and domestic productivity will not deliver durable prosperity. Korea must pivot toward economy-wide productivity growth.