The Lee Jae Myung government has declared that the nation’s future hinges heavily on maximizing artificial intelligence innovation. It aims to transform an already wired, tech-savvy nation into one where AI is not just a tool but the backbone of its economy and society.

While hardware, models and technologies are vital to the AI-driven transformation of the entire society, they are insufficient without the right people to build, manage and innovate with them. Talent is just as critical — if not more so than infrastructure or algorithms.

Acknowledging that, the government has also unveiled a suite of initiatives and promised to devise more in the coming months. On paper, the government’s AI talent initiatives look mostly ambitious.

It has pledged to invest heavily in nurturing homegrown talent from an early age, offering generous research grants and strengthening ties between universities and industry. It is also working to attract top scientists and engineers from abroad, while reorganizing the National AI Strategy Committee so ministries and companies move in sync.

The National Growth Fund has been scaled up by half from an earlier plan to 150 trillion won ($106.3 billion) to underpin these strategies. The government hopes these efforts will eventually help double the nation’s potential growth rate in just a few years to about 3 percent.

But this is where optimism meets reality.

Policymakers often speak as if the right mix of funding and policy will automatically turn the country into an AI powerhouse. What they rarely acknowledge are the structural obstacles — deeply cultural, not merely financial — that stand in the way. Unless these are addressed head-on, no fund, committee or presidential exhortation will suffice.

When the Donald Trump administration recently proposed a $100,000 fee for the H-1B visa, many in Seoul saw an opportunity. If working in the US becomes irrationally costlier, displaced talent might look elsewhere — perhaps even to South Korea.

It’s a clever bit of opportunism, but also wishful thinking. On one hand, the unpredictability of Trump-era immigration policy makes planning around it risky; on the other, South Korea is not an obvious second choice for global talent.

The reasons are clear. South Korea has long suffered from brain drain, despite years of efforts to reverse it. Its brightest minds often leave, and incentives to return are weak. The domestic market is small, rigid workplace hierarchies stifle creativity and salaries are capped by a cultural obsession with equity.

South Korea does not believe in paying extraordinary people extraordinary wages. The instinct is to keep pay gaps narrow, maintain harmony and avoid visibly rewarding individuals. While this prevents resentment within organizations, it’s disastrous when competing with Silicon Valley, where million-dollar packages are routine and talent is fiercely contested.

It won’t be easy

Beyond pay, autonomy is another hurdle. Top researchers want the freedom to pursue risky, curiosity-driven projects — even if they fail. South Korea’s preference for government-set agendas and top-down oversight ensures orderly progress but stifles inspiration.

Innovation thrives in messiness — in experiments that may seem pointless until they yield breakthroughs. Without loosening the reins, South Korea risks achieving efficiency but not excellence.

The financial ecosystem is similarly restrictive. Entrepreneurs may survive the brutal early stages of startup life, but scaling is quite another matter. Domestic capital markets undervalue firms, and restrictions on foreign venture investment — in terms of regulations and social norms — limit inflows.

Compared to US startups that trade at high multiples, South Korean firms remain undervalued and underfunded. The result is predictable: promising startups either wither or relocate abroad, taking their best people with them.

Yet this outward flow need not be a disaster. Consider Son Heung-min, who left South Korea as a teenager to train in Germany. Skeptics saw it as a loss, but it made him one of the Premier League’s finest forwards and a global symbol of Korean excellence.

The same could apply to AI entrepreneurs who opt to move their companies overseas. Rather than trying to hold them back, South Korea might embrace their international success as part of its broader footprint.

Still, there’s a lingering sense that South Korea wants it both ways. It speaks the language of openness and global competition, yet clings to rigid norms that keep salaries flat, creativity constrained and outsiders at bay.

You cannot lure top engineers from countries like India or China with lectures about harmony and equal pay. Nor can you retain the best Korean students if opportunities abroad are more lucrative and liberating. The world’s top talent is moving to where conditions are already attractive.

If South Korea truly wants to be a global AI hub, it needs more than funds and committees. It needs a cultural shift. That means recognizing that some people are simply more valuable in the market — and paying them accordingly. It means giving researchers genuine independence, even if that leads to messy or unconventional outcomes. It means accepting that many of its best entrepreneurs will build abroad, and viewing their success as an extension of Korean influence, not a betrayal.

This isn’t a call to abandon fairness or social cohesion. In the unforgiving race for AI leadership, clinging too tightly to these norms could be self-defeating. The challenge is to preserve fairness where it matters — protecting workers, ensuring access to education — while allowing flexibility at the top, where global competition is fiercest.

AI is the competitive frontier of the 21st century. South Korea has the ambition, resources and technological base to be a pioneer in the field. What it lacks is the willingness to challenge its own deeply ingrained habits.

The road ahead won’t be easy. Reforming workplace culture, rethinking compensation and liberalizing research environments are not overnight fixes. But if South Korea is serious about its aspirations, these are the reforms it must pursue.

Yoo Choon-sik

Yoo Choon-sik worked for nearly 30 years at Reuters, including as the chief Korea economics correspondent, and briefly worked as a business strategy consultant. The views expressed here are the writer’s own. -- Ed.


khnews@heraldcorp.com