Christine Tsai, CEO of U.S. venture capital firm 500 Global, forecast that South Korea stands to benefit the most from the next wave of technological innovation represented by Artificial General Intelligence (AGI) and Artificial Super Intelligence (ASI). As bottlenecks in AI semiconductors, electronic components, and manufacturing data intensify during the AGI/ASI development process, the analysis suggests that South Korea’s manufacturing technology and software competitiveness will position it as a critical supply chain player.
“In the coming years, the hottest topics will be AGI and ASI,” Tsai said. “With computer resources, power, and semiconductor supply falling short of what’s needed for AGI/ASI development, capital will concentrate on companies that possess superior resources in these areas.” Founded in 2010, 500 Global has grown to manage $2 billion in assets and has a track record of discovering unicorn companies such as Canva and Grab. Tsai particularly signaled concentrated investment in South Korean deep-tech developers in advanced manufacturing, robotics, and semiconductors, noting that “South Korea’s software capabilities have already grown to a considerable level.”
This outlook draws attention against the backdrop of ongoing efforts at South Korean manufacturing sites to digitize the tacit knowledge of skilled workers. The retirement of baby boomer-generation skilled workers is accelerating, making the risk of technical discontinuity a reality. According to the National Root Industry Center, as of 2024, workers aged 50 and older account for 36.8% of the 744,543 people employed in root industries, while those under 30 make up just 10.3%. Yet a survey by South Korea’s Ministry of SMEs and Startups found that only 0.1% of small and medium-sized enterprises have adopted manufacturing AI, and a mere 0.8% have a dedicated AI organization.
The government is accelerating its response. South Korea’s Ministry of Trade, Industry and Energy selected 30 projects for its manufacturing tacit knowledge-based AI model development initiative, which drew 143 consortium applications for a competition ratio of 4.77 to 1, and is also pushing forward with the construction of a “manufacturing data library” to standardize and store corporate manufacturing data. South Korea’s Ministry of Science and ICT has launched a 34 billion won (approximately $23 million) “Physical AI Leading Technology Development Project.”
Companies are also actively converting skilled workers’ experience into digital assets. POSCO is selecting veteran technicians as “POSCO Masters” to honor them while simultaneously pursuing plans to digitize their tacit knowledge. Hanwha Ocean (042660) is collaborating with Endotlight and Airobot to conduct physical AI verification, training robots on motion data from shipyard workers.
Voices within the industry are increasingly calling for skilled workers to be redefined not merely as data providers but as instructors responsible for AI training and verification. However, many skilled workers on the ground are reluctant to participate in data training due to concerns that AI could replace their jobs. Experts point out that “without appropriate compensation and employment security systems for skilled workers, it will be difficult to secure cooperation from the field.”
Meanwhile, the impact of AI proliferation on the job market is becoming increasingly evident. In the second quarter of this year, the number of unemployed individuals with a college degree or higher reached 481,000, the highest level in five years since the COVID-19 pandemic. The unemployment rate for college graduates in their 20s surged to 8.3%, the highest since 2021. With analyses suggesting that AI most heavily displaces jobs requiring less than five years of experience, the diagnosis is that reduced new-graduate hiring is solidifying into a structural phenomenon.
In the financial sector, pressure to manage aggregate household lending is mounting. The household loan balance at South Korea’s five major commercial banks stood at 777.23 trillion won (approximately $525.7 billion) as of the 15th of this month, already exceeding the annual growth target. KB Kookmin Bank began waiving early repayment fees on personal credit loans from the 20th through year-end to reduce existing balances, while Shinhan, NongHyup, Woori, and Hana Bank are also tightening regulations, including capping credit loan limits at 100 million won (approximately $67,633).
Separately, Amorepacific (090430) is pursuing the sale of its health functional food factory in Anseong, Gyeonggi Province—which has an annual production capacity in the 200 billion won (approximately $135.3 million) range—to advance its “inner beauty” business. The global inner beauty market is projected to grow from $4.2 billion last year to $13.1 billion by 2034. Competitors such as APR (278470) and LG Household & Health Care (051900) are also expanding their inner beauty product lines, intensifying market competition.