"Right now, startups are competing in an environment where the game rules change constantly due to political strife and regulatory issues. This environment shrinks startup businesses and weakens the competitiveness of Korea's AI market."
Kim Jae-won, CEO of Elice Group, offered this assessment of the government's artificial intelligence industry policy in an interview with The Seoul Economic Daily on Wednesday.
Elice Group is a startup that Kim founded in 2015 with fellow researchers at the Korea Advanced Institute of Science and Technology (KAIST). Starting as an IT education and practice platform, the company has expanded into AI chatbots, modular AI data centers, and other areas, earning recognition for its contributions to building Korea's AI ecosystem.
After 10 years of smooth sailing, Elice Group faced an unexpected crisis this year due to regulatory changes. The company had entered the AI textbook development business, which was a state project under the Yoon Suk-yeol administration. It unveiled a prototype in 2023 and received approval from the Ministry of Education for elementary and secondary textbooks the following year. However, when the National Assembly downgraded AI textbooks from official textbooks to supplementary educational materials in July this year, the AI textbook business was effectively scrapped.
While the AI textbook business faced headwinds in Korea, another country reached out to Elice Group. Singapore selected the company as a partner for its digital textbook development project, part of its public education digital transformation initiative. Elice Group will develop digital textbook prototypes for Singapore's secondary schools over the next six months.
Kim emphasized that the incident "should not be viewed as just an AI textbook problem." He warned that if political logic and various regulations block the path for AI startups, it will also hamper the government's goal of becoming one of the world's top three AI powers.
"It's important to first build an AI industry ecosystem and then allow various companies to join it," Kim said. "If the current chaotic AI regulatory environment persists, it will weaken startup business capabilities and prevent the formation of a large AI economic ecosystem."
Kim also expressed concern that the government's AI industry promotion policies are designed primarily for large corporations. "There is no place for startups in large-scale government-led AI projects," he said. "Vertical integration centered on conglomerates works for manufacturing, but AI innovation happens when multiple startups compete simultaneously at the market's front lines."
Asked about the government's role in growing the AI startup ecosystem, Kim replied, "It must make neutral decisions solely from a social and economic welfare perspective." He explained that if the government creates conditions for startups to participate in large-scale projects and improves unnecessary regulations, rapid innovation will follow.
"We should learn from the good example of the Financial Services Commission, which boldly pushed forward loan comparison platforms, benefiting financial consumers and helping fintech companies grow to the next level," Kim said.
Kim also advised that "AI-related regulations involve interests across multiple government ministries and organizations," adding that "there is a need for the AI Strategy Committee to lead assessments of regulatory and policy validity so that the views of one group are not overemphasized."
