Korea 6th in global AI competitiveness, but private investment lags

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South Korea’s prowess in the field of artificial intelligence (AI) has been ranked 6th among 62 evaluated countries. It represents an improvement from four years ago, but the country still faces a substantial gap in private investment compared to its global counterparts. Experts argue that legal reforms, including amendments to personal data protection laws, are necessary to boost private investment in the sector.

The Federation of Korean Industries (FKI) on Thursday released the results of the “Global AI Index” study conducted by the UK-based data analysis firm Tortoise Intelligence. The study analyzed AI competitiveness across the seven key domains of talent, infrastructure, operational environment, research levels, patents, and private investment.

Korea ranked 6th out of the 62 countries evaluated, particularly excelling in the patents and policies domains. The country’s AI-related patents were reported to be the third highest globally after the United States and China. Notably, Samsung leads the pack in terms of the number of patents on hyperscale AI, surpassing industry giants including IBM and Google.

The country also shone in the policies domain, ranking sixth among the 62 countries.

“In the 2019 survey, Korea was ranked 31st in policy competitiveness,” a FKI official said, adding that the rise in the ranking was driven by a number of government measures to foster the AI industry since 2018. The Korean government unveiled several AI development strategies, including the National Artificial Intelligence Strategy in 2019, the Trusted AI Implementation Strategy in 2021, and the Korea Digital Strategy in 2022.

But Korea still lags in the Private Investment domain, ranking 18th out of the 62 countries. The study showed that the country scored just 8.3 out of 100 points, trailing behind Hong Kong (19.2 points) and India (8.9 points).

The lag in private investment is due to a lack of competitiveness in both the number of AI-related companies and the scale of investment. Korea has only six publicly traded AI companies, fewer than the United States (172) and China (161), as well as Japan (26) and Taiwan (9). It also ranks 19th in the average investment size per AI company, highlighting the need for overall improvements in market dynamics and company-specific investments.

The country’s AI competitiveness fared better in talent, infrastructure, operational environment, and research level, ranking 11th, 12th, 12th, and 12th respectively, among the 62 countries. However, the study revealed that Korea still faces challenges in terms of the number of data scientists and engineers, ranking 20th globally.

According to the Ministry of Science, ICT, the AI talent shortage in Korea worsened with 7,841 individuals as of 2022 compared to 1,609 in 2020 and 3,726 in 2021.

To enhance the country’s overall AI capabilities, FKI emphasized the need for relaxed visa regulations to attract international talent in the AI sector and suggested easing regulations related to personal data protection and credit information laws.