February 19, 2025
SEOUL – It all boils down to technology. At the end of the day, the question is who has the technological edge?
Navigating the uncharted terrain of US-China confrontation, supply chain reformulation and economic security, a new chapter of which has just begun with Trump 2.0, we in Korea somehow tend to forget this cardinal rule. Instead, the key question for the past several years has been framed as what Korea should do to position itself in the new geopolitical and geoeconomic landscape.
This tendency has consumed much of the discourse both in the government and among companies. With a new deluge of Trump 2.0 trade measures, the national debate for the past month has quickly shifted to how best to cater to demands from Washington in order to contain possible fallout on Korea.
Of course, all these geopolitical issues and geoeconomic considerations are so crucially important. No question about it. What is being lost in the ongoing macro-level discussion, however, is the said cardinal rule: how to keep and nurture the “technological competitiveness” of Korean industry. Alarms have been ringing for several years, but the country has been slow to respond.
The wheel of the multilateral trade regime’s fortune continues to turn, and now everything trade appears to be in the dark. The World Trade Organization is left barely standing, with a big pit carved at its base. At this time of uncertainty and anxiety, the only insurance we can rely on is technological ownership in certain critical fields. Global debates point to three fields in this regard — AI, quantum computing and advanced semiconductors. These are called “core technology,” and fierce competition is currently unfolding.
As the three concern hegemony over our future society, and as they go beyond mere commercial competition or industrial promotion, they launch a different breed of technological race. It can be called Global Tech War 2.0.
Look at others in this new race. The US, the EU, China and Japan are serious about this. By placing core tech-promotion policy at the top of the national agenda, they are churning out support packages of many kinds. Funds are earmarked and distributed, and regulatory schemes are adjusted and created. Their objectives are cut from the same cloth of providing direct and immediate help to domestic industries and companies in core technology.
In the chips sector alone, and counting only the latest announcements, the numbers are: the US ($53 billion), China ($48 billion) and Japan ($65 billion). The EU is trying to catch up to the US and China on the AI front; on February 11, Brussels pronounced a plan to mobilize $207 billion to establish its AI infrastructure.
While other countries are running their hearts out, Seoul is taking a leisurely walk, poking and prodding at every turn of the path. Support programs in the country are too small, too slow, and too convoluted.
What is causing Korea’s slow response, then? The way I see it, the cautious approach stems from two reasons. First is political reaction. The term “core technology,” the very theme of Global Tech War 2.0, by definition, presupposes a select group of industries and companies, and thus any support would automatically become a “targeted” one. Targeted support is politically unpopular as it is prone to kindle a preference-discrimination flame. It’s a hard sell in the country. Government agencies would have few incentives to quicken the process.
Maybe a little different thinking is now needed here. The emerging view in many countries is that core technology constitutes new national infrastructure. It is the very reason why leading nations are so serious about core technology and are determined to mobilize their full national capacity. Core technology constructs infrastructure for the digital society now and for the future. Viewed from this perspective, support for core technology development goes beyond helping a handful of select companies. If properly implemented, any benefit flowing from it stands to permeate every corner of society.
To ensure this happens, future government support should be designed so as to be directed at core technology, not to a particular product or product-specific commercial technology. Support programs and schemes formulated this way may help clear commonplace political hurdles.
Second is legal inertia. Just check out recent legislative endeavors. For instance, the Act on the Development of Artificial Intelligence and Establishment of Trust (the AI Basic Act), finally adopted last December, does not contain this concept of new “core technology” either. It just offers skeletal and general references to support for “AI technology.” The act then defines “AI technology” as “hardware and software technology or related technology needed to implement AI” (Article 2). Almost a tautology and nothing more.
Critically missing are: which core technologies Korea plans to nurture, why such technologies relate to future digital infrastructure and how support schemes are formulated to accord immediate assistance to R&D activities. Perhaps specifics are just pushed off to future enforcement decrees or enforcement regulations. In fact, this act follows a typical template of Korea’s conventional industrial policy. A new global race, however, arguably requires us to break away from the old playbook. Others already are.
These are elements that should be set forth in the statute. At least detailed guidelines should be stipulated. Decrees and regulations would only operate within the statutory confinement. Hopefully, future legislation, starting with the much-touted Special Act on Semiconductor Industry Competitiveness, can script a new playbook for Global Tech War 2.0.
The maxim “back to basics” is all the more apt when things are as murky as they are now. The basic of basics in the new global competition is technology. The shock of DeepSeek has brought this cardinal rule to the fore.
Lee Jae-min is a professor of law at Seoul National University. The views expressed here are the writer’s own. — Ed.