Current Status of AI Adoption by Korea Companies

The current state of AI technology and the Korea market

Many companies have adopted AI to increase the efficiency of factory production, make recommendations through algorithms, and secure competitiveness in various fields. However, it is true that there are many difficulties in adopting AI because they do not realize the effect of adopting AI in practice.

According to the results of a survey conducted by the Korea Development Institute (KDI)on 500 randomly selected companies, the adoption rate of AI technology is still low in some industries. The statistics also show that small and medium-sized enterprises have not yet adopted the technology.

Whether Korea companies are realizing the effects of AI utilization

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Let's look at another survey. Let's take a look at the data from the KoreaInformation and Communication Policy Research Institute (KISDI)'s April 21st AIAdoption Survey in Korea. Out of 368 companies in Korea, only 14.7% responded that they have adopted AI. Of those, more than 80% responded that they have seen positive effects from using AI. Although the percentage of companies that have adopted AI is not high yet, we can see that the results after adoption have been good. It is expected that many companies will push forward with AI adoption in the future.

What are your predictions for the changes that AI will bring?

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 Which sectors will experience the biggest changes due to the introduction of AI technology? According to the survey results, 31.4% of respondents anticipate the changes that AI technology will bring to the medical and health industry, followed by transportation (19.4%), communication/media (15.3%), and logistics and distribution (10.4%).

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Change aside, it will be important to see if the introduction of AI technology actually helps companies' performance. Of those who have used AI technology,77.8% of respondents said that it has helped their management and corporate performance. Which directions were most helpful? Product management, including new product development, tied for first place at 32.1%, followed by management and operations management at 25.0%, followed by cost and production management(25.0%), and human resources and labor management (17.9%).

What are the real-world effects of AI adoption?

Notably, a whopping 80% reported an increase in actual revenue. A staggering 41.7% ofrespondents said their sales increased to the point where they had to hireadditional staff after implementing AI. However, the effect of reducingoperating expenses was not as pronounced. Rather, 47.2% of respondents chose"increased operating expenses" as a result of AI.

Inother words, the majority of companies have seen an increase in revenue afterimplementing AI, and some have even hired additional staff as a result. Ifyou're a company that hasn't seen a lot of revenue growth lately, you shoulddefinitely consider using AI to improve your bottom line.

Reasonsfor hesitation to adopt AI and difficulties in operation

Informationand Communication Policy Research Institute (KISDI)'s April 21, 2020 survey ofcompanies adopting AI in Korea

Butwhy do companies hesitate to introduce AI even though they fully understand itseffectiveness? This time, when we looked at the factors that hinder theintroduction of AI, unclear liability for accidents caused by AI (27.2%),difficulty in obtaining external financing (19%), and strict regulations ondata utilization (14.4%) were ranked respectively. In addition, many companieswere hesitant to adopt AI due to internal factors: burdensome adoption costs(41.3%), complex and difficult algorithms (19%), and difficulty in hiringpeople with AI technology knowledge (10.6%). As explained earlier, we canspeculate that cost is also a reason why SMEs are less likely to adopt AItechnology than large companies.

Informationand Communication Policy Research Institute (KISDI)'s April 21st AI AdoptionSurvey in Korea

Infact, companies reported that they encountered various obstacles in the processof adopting AI. Lack of data (36.1%), lack of budget (18.7%), and lack of AImanpower (13.9%) were found to be the main obstacles, which are difficult forcompanies to solve on their own.

Inresponse, the government is operating various policies to improve thedifficulty of AI adoption, such as data voucher support projects and AIworkforce training, and is investing heavily in the value of future industries.If you have identified the potential to increase sales by adopting AI, it wouldbe the wisest choice to actively utilize various government support policies topromote AI adoption.

References

-Business Perceptions and Practices of Artificial Intelligence (AI)

-AI Adoption Status and Implications by Major Industries

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