In a recent analysis, economist Yoo Choon-sik cautioned that artificial intelligence is not a cure-all for South Korea's economic woes. While AI offers potential benefits, structural challenges such as low productivity growth, an aging population, and rigid labor markets require comprehensive policy responses beyond technology adoption.
South Korea faces a rapidly aging society, with the fertility rate dropping to 0.72 in 2023, the lowest in the world. This demographic crisis strains the workforce and social welfare systems. Yoo argues that AI can help mitigate labor shortages but cannot replace fundamental reforms in education, immigration, and social safety nets.
Productivity growth in South Korea has slowed significantly, with total factor productivity increasing by only 0.5% annually between 2015 and 2020, according to the OECD. AI investments may boost efficiency in some sectors, but without addressing regulatory bottlenecks and fostering innovation across the economy, gains will be limited.
Yoo also highlights the risk of widening inequality, as AI adoption tends to benefit high-skilled workers while displacing routine jobs. He calls for targeted retraining programs and social policies to ensure inclusive growth. The article concludes that AI should be viewed as a tool, not a substitute for structural economic reforms.
