As the United States and China clash over AI supremacy, advice has emerged that Korea and Japan should combine their manufacturing competitiveness to forge a new breakthrough. The idea is that if the two countries join hands to build a "physical AI" ecosystem, Korea and Japan can establish themselves as a new axis within the U.S.-China-centered AI order.
Park Young-sun, Chairperson of the Strategic Economic Advisory Group at the Ministry of Finance and Economy and former Minister of the Ministry of SMEs and Startups, and Taira Masaaki, a member of Japan's ruling Liberal Democratic Party who oversees AI and Web3 policy, said in a ChosunBiz interview conducted on the 21st at the Ambassador Seoul Pullman hotel in Jung District, Seoul, that Korea and Japan should build a "Korea-Japan AI economic joint platform" grounded in manufacturing competitiveness. They said the two countries should expand cooperation on manufacturing data, technology standards, and supply chains to prepare together for the era of physical AI.
The interview that day was conducted as a dialogue between Chairperson Park and Representative Taira. Park, a four-term former lawmaker, leads the Strategic Economic Advisory Group launched in April at the Ministry of Finance and Economy and also serves as co-director of Sogang Mentoring Center's "Window of Thought" at Sogang University.
Representative Taira is a former Japan digital minister and currently serves as acting head of the LDP Headquarters for the Promotion of a Digital Society and as chairperson of the AI and Web3 subcommittee under the headquarters.
Chairperson Park said, "In the AI era, cooperation among countries becomes a competitive edge, as with semiconductors," and added, "If Korea and Japan consolidate their manufacturing capabilities, they can create new growth opportunities."
Representative Taira said, "Because physical AI is a technology used in the real world, cooperation based on trust is crucial," and added, "There is ample potential for collaboration not only in manufacturing such as semiconductors but also in data." The following is a Q&A.
― What are Korea and Japan's strategies in the AI era?
Park Young-sun, chairperson of the Strategic Economic Advisory Group at the Ministry of Finance and Economy (hereafter Park Young-sun) "Korea is developing an 'independent AI foundation model project' with the goal of becoming one of the world's top three AI powers. Building on world-class memory semiconductors and manufacturing capabilities, the country should leap forward as a nation that designs the AI ecosystem. In the AI era, computing infrastructure, data, power, semiconductors, and the software ecosystem that consolidates them determine national competitiveness. In particular, we see physical AI becoming a new growth axis for the manufacturing and service industries and are expanding investment."
Taira Masaaki, representative (hereafter Taira Masaaki) "Rather than jumping head-on into the competition over large language models (LLMs) like the United States and China, Japan is pursuing a 'switching AI' strategy that adapts global AI models to the Japanese environment. Government and industry are investing together to build competitiveness in physical AI as well."
― What are the prospects for Korea-Japan cooperation in physical AI?
Park Young-sun "China is already pushing physical AI as a national strategy. To respond to China's manufacturing strength, Korea and Japan need to consolidate their respective manufacturing advantages in areas like sensors and actuators. Like semiconductors, AI now requires team play. We should also consider a 'Korea-Japan AI economic joint platform' that builds supply chains, data, and standards together. Physical AI is the core competitiveness that will determine productivity in manufacturing. While sharing core manufacturing data is difficult, if we create global standards for basic manufacturing data together, both Korea and Japan can win."
Taira Masaaki "Which country to cooperate with must also be considered from an economic security perspective. As confirmed at the 2023 Hiroshima G7 summit, because physical AI is used in the real world, cooperation based on trust is important. I also believe links with middle powers, including Korea, are important. In addition to cooperation in manufacturing such as semiconductors, there is potential for collaboration in data that is not directly consolidated with corporations' competitiveness."
― AI agent commerce and stablecoins are drawing attention.
Park Young-sun "When an era comes in which AI agents handle everything from product comparisons to payments, payment methods will also change. My understanding is that Japan is conducting pilots and promoting B2B payments using yen-based stablecoins. Korea should prepare relevant systems and legislation more quickly."
Taira Masaaki "AI agents and Blockchain are a good match. 'On-chain finance,' in which various assets such as deposits and securities move on Blockchain, will expand, and stablecoins are very important for this. Japan is pushing related projects, with the public and private sectors building the ecosystem together."
― Can AI be a solution to aging and population decline in both Korea and Japan?
Park Young-sun "Korea and Japan both face the common challenges of shrinking workforces and aging populations. Labor shortages in manufacturing and services will be substantially offset by physical AI. In healthcare, we are also preparing AI projects that use health screening data."
Taira Masaaki "Japan is also actively using medical data at the national level. In the caregiving sector, we are pushing institutional reforms so that one worker can care for more elderly people by using AI and sensor technology. AI will be an important solution for aging societies."
― For startups and small and midsize businesses, can AI be a new growth opportunity?
Park Young-sun "As AI agents spread, they will largely overcome shortages of skilled workers and capital constraints. An era is opening in which small teams can take on the global market. Innovation is more likely to occur faster at startups than at large companies. We should create a joint Korea-Japan AI fund and energize exchanges not only in the private sector but also at the government level."
Taira Masaaki "That's a good proposal. I will convey it to Prime Minister Sanae Takaichi. In the AI era, ideas and content become competitiveness. For startups and small and midsize businesses, this will be a new opportunity to leap forward."