[fn Editorial] "Manufacturing Exit in 10 Years" Choi Tae-won's Warning, Survival Lies in AI Transition

Choi Tae-won, chairman of the Korea Chamber of Commerce and Industry, recently issued a chilling warning that South Korea's manufacturing industry is on the brink and will mostly be ousted in 10 years if it fails to transition to artificial intelligence (AI). He pointed to China, which has risen as a global powerhouse in manufacturing, as the root cause of the crisis. Chairman Choi noted China's rise since the mid-2010s but criticized the lack of long-term strategies, leading to what he called South Korea's "lost decade" in manufacturing.

China has dominated the traditional manufacturing sector. The "Made in China 2025" plan, launched 10 years ago, has been a huge success, making China number one in seven major manufacturing industries, including automobiles, shipbuilding, machinery, and steel. We are trailing China in 12 out of 13 manufacturing sectors. The only one we lead in is semiconductors, but even there, China is closing in on us. Chairman Choi suggested that if our manufacturing industry doesn't undergo an innovative upgrade, it will be wiped out within 10 years, emphasizing technological innovation represented by AI as a strategy.

What Chairman Choi emphasized is not merely fostering the AI industry. The AI industry broadly includes pure research and development and the data and software industries that utilize AI. However, the importance of transitioning or utilizing traditional manufacturing with AI is being overlooked. The decline in our manufacturing competitiveness can be attributed to the failure to integrate rapidly advancing AI and robotics technology.

According to Chairman Choi, breaking away from existing production line operations and maximizing the use of AI technology is the key to survival for the manufacturing industry. How quickly traditional manufacturing is transformed to an advanced level with AI will determine the survival of companies.

Of course, there have been policy efforts to advance traditional manufacturing. The "Smart Factory" was precisely a policy for manufacturing advancement. However, with the level of technology in smart factories, it has become difficult to survive the storm from China. This is because smart factories are merely the initial digital stage focused on automation and connectivity in manufacturing sites.

The AI transition of manufacturing is a next-generation manufacturing innovation based on data-driven intelligence that enables autonomous decision-making. While the smart factory policy is not meaningless, a manufacturing revolution through the advanced technology of AI transition is necessary to emerge as a market leader.

The government plans to pour massive policy funds into achieving the national goal of becoming one of the top three global AI powerhouses. However, without a well-structured blueprint, it may be difficult to achieve the goal even with astronomical investments. The innovative industrial trend of AI could be both an opportunity and a threat to our country's industrial competitiveness.

Simple AI development is not the only important thing. More crucial is the policy effort for integrating AI into manufacturing. Achieving AI transformation in manufacturing is essential to becoming a true AI powerhouse. If not, we will be permanently pushed out of global competition. Not only in manufacturing but also in high-tech fields, China is leading the global market, making it even more challenging.