Part IV of the Special Series for Global Power and Leadership: a collaboration between WGI.WORLD (World Geostrategic Insights) and CGPS (Center for Global Peace and Security).
By Sunny Lee – Founder and President at CGPS (Center for Global Peace and Security), and Director at IKUPD (Institute for Korea-U.S. Political Development), Washington DC.
Elon Musk in Space X is the most successful entrepreneur and technological adventurer after Steve Jobs, who is leading the contemporary industrial revolution through highly advanced technologies. As the wealthiest person in the world with $252 billion, his innovative vision extends to the Cosmos to make people’s dream come true. He ambitiously announced that he is willing to spend all of his money to build up a human village on Mars before he dies. His ‘Mars Colonization Project’ for Oasis Mission is extending to the Moon as well as multi-planets.
Now, Elon Musk’s adventure proves that the AI semiconductor industry reorganizes global economic structure. AI’s technology, service and predominance commercialized by global big tech companies are currently standing for Apple’s M2 Ultra chip, Tesla’s Dojo D1 chip and Amazon’s Graviton4 chip. US R&D Funding: FY2024 includes approximately $209.7 billion and U.S. firms’ spending is only 2.33% of GDP at fifth in the world, compared to Switzerland (4.07%), Taiwan (3.39%), the Netherlands (2.78 %), and Germany (2.51%).
However, U.S. firms had increased their size-adjusted R&D spending at the most, up to 0.59% of GDP from 2018 to 2023 by absolutely surpassing an average of 0.27%. Such a remarkable record shows the global scale of the U.S. big tech companies beyond national boundaries. Top five most valuable companies in the world based on advanced technology and industrial background with around $3 trillion are all located in the United States: Apple Inc., Microsoft Corp., Nvidia Corp., Alphabet Inc. (Google), and Amazon.com Inc. These supranational companies will never allow any challenge toward their industrial hegemony which has dominated the global community. In addition, they have strengthened the United States’ superpower position leading the world economy.
Nonetheless, Global Finance ranks Korea as the top first among countries which explore technological advances and capacity to develop and leverage innovative technology. Most Technologically Advanced Countries 2024 includes the top five for technological expertise as Korea (6.63), the United States (4.94), Taiwan (4.9), Denmark (4.79), and Switzerland (4.68). The ranking evaluates the percentage of internet and LTE users, their collective knowledge and capacity for innovation, and average GDP allocated to R&D. Its standard also refers to a year full of advances in artificial intelligence (AI), virtual reality and green technology.
At this point, Korea is frantically propelling its speed as a much larger gap with other countries, which is remarkably surpassing the United States in composite score. Korea remains a world leader in technological advancement and innovation, taking the top spot since 2022. Korea’s consumer electronics are induced to invest heavily in R&D, while people combine advanced technological skills with an innovative K-culture.
Therefore, as the most potential country in industrial technology, Korea will lead the world economy in the near future by mega tech companies such as Samsung, SK, LG, and Hanwha. In affiliation with such Korean companies, the global big 4 composing 60% in semiconductor equipment have already constructed their factory and R&D center in Korea such as Applied Materials (USA), ASML (Netherlands), Lam Research (USA), and TEL (Japan). Korea is turning to the global hub and central market in semiconductor technology and production systems.
Industrial Technology and Its Adventure
8.1 billion people in the world have been enthralled simultaneously to communicate with each other beyond time and space, feeling cosmopolitan through social network service. Such a technological revolution to tide up global society and share people’s common interests strongly struck the world when Meta CEO Mark Zuckerberg began Facebook in 2004. Meta Platforms have derived an overwhelming majority of its revenue 97.5% from advertisements on multiple platforms such as Facebook, Instagram, Messenger, and WhatsApp.
Moreover, AI has been a huge boost in its biggest AI push that Meta is placing smart assistants in major platforms and rolling them out in many countries. AI push is powered by Llama 3, Meta’s newest and largest language model to date. Now, more than 4 billion people use these platforms to get more impactful results from each experience. As such, technology is one of the crucial sectors contributing to the economy and making positive impacts on society. Especially, industrial technology improves efficiency for general human life and productivity for more profits by modernizing and developing quicker ways of completing tasks.
There are top five industrial technologies to facilitate human life, while the ultimate goal of technological advances aims to improve the efficiency of the core processes for global society. It also provides solutions of various problems encountered by manufacturers and reduces production costs, eventually increasing the profits. New type of Industrial trend has successfully fulfilled a major digital transformation with technological advancements, evolving consumer demands with influence of the COVID-19 pandemic as major catalysts for change. To enhance competitiveness and overcome current challenges, the major manufacturing trends change the industry itself by stimulating agility and adaptability as top priorities.
First, it is digitalization and the fourth industrial revolution (Industry 4.0) enabling businesses to optimize processes, improve quality and reduce costs. In particular, Industry 4.0 signifies the manufacturing industry’s digital transformation such as the Internet of Things (IoT), artificial intelligence (AI), and cloud computing into a company’s existing manufacturing process. Industry 4.0 enables manufacturers to conduct real-time data collection and analysis for vast amounts of data. It successfully provides them valuable insights into their operations, utilizes cloud storage and facilitates communication between enabled equipment to create more flexible, agile manufacturing systems.
Second, artificial intelligence (AI) is at the forefront of global hegemony battlefield beyond semiconductor and smartphone competition. With Industrial Internet of Things (IIoT) devices and sensors collecting data from machines, equipment and production lines, AI algorithms can quickly process and analyze data to identify patterns and trends, helping to understand how production processes are properly performing. Especially, AI fully assists manufacturers to implement predictive maintenance systems and processes, streamline supply chain management, and identify workplace safety hazards proactively.
Third, 3D printing is a rapidly growing technology as the world’s fastest industrial technology which simultaneously processes complex designs, functional prototypes, and component parts for production. With 3D printing, manufacturers can produce complex geometries in a single step while reducing manufacturing time and cost. Layer-by-layer additive manufacturing is particularly useful in aerospace, automotive and healthcare, where accuracy and promptness of complex parts and components are required to operate timely.
Fourth, robotics and automation have been transforming manufacturing systems and structures in speed. Especially, robotic process automation has been a key driver of smart manufacturing, taking on repetitive or dangerous tasks such as assembly, welding and material handling. Instead of human workers, it has a much higher accuracy and precision, improving product quality and reducing defects. Manufacturers also integrate robotics with Industrial Internet of Things (IIoT) sensors and big data analytics to create a more flexible and responsive production environment.
Fifth, it is sustainable manufacturing based on industrial morality. Manufacturing processes require substantial amounts of energy and produce harmful waste or by-products. Most countries implement regulations to reduce carbon emissions to protect the environment. Companies engaging in sustainable manufacturing reduce waste, conserve resources, and minimize harmful substances. They substitute renewable energy sources and implement eco-friendly production processes to leverage competitiveness of sustainable manufacturing.
Technological Power Countries
Among the top 20 most technologically advanced countries except the United States, 17 countries belong to the developed and wealthiest countries in Europe and Asia. Amazingly, Taiwan jumped up to top 3rd, due to increasing investment in R&D and Germany at 4th in engineering prowess since World War II is now actively using technological expertise in the field of green energy. Israel also gains significant spotlight by putting immersive investment in R&D with a robust startup ecosystem. Its companies are advancing rapidly in life sciences, military technology, and other sectors as the world’s 6th largest hub.
It is very weird that China at 41st and India at 65th as the most populous developing countries are listed at a lower rank in the lack of deep scientific knowledge and significant technological expertise in various sectors. Brazil at 55th, Indonesia at 59th and Russia at 44th are also unusual in the view of population and economic size. One thing is clear that these countries are mostly based on poor internet infrastructure and high illiteracy rate.
Even though China has significantly increased its R&D expenditure as leading in patent applications, uneven levels of innovation across regions become obstacles in global challenges and economic growth. China’s lacking competitiveness in quality and the inability to effectively respond and adapt to market changes result in low production efficiency and slow economic growth. These factors weaken overall development potential such as technology transfer, financial assistance, and expert training to boost innovation capability.
Right after the invasion in Ukraine, a mass exodus of Russian IT workers occurred and around 100,000 IT specialists left Russia in 2022. Alongside such exit, more than 1,000 foreign companies curtailed their operations in Russia by the broadest economic sanctions ever to be imposed. Yandex LLC, equivalent to Google and the largest multinational technology company, was finally selling off lucrative businesses to VKontakte (VK) controlled by state-owned companies which tightly control domestic internet. As long as Russia’s tech industry keeps on falling behind, its economy will stagnate as the biggest blow to future economic growth.
On the contrary, Korea reports 99% literacy population and 49% in college education as the top first country in the OECD and moreover, Korea’s internet infrastructure is the top first in service and access. 95% Koreans are connected to the internet and smartphone so that it propels technological advancement and an innovative environment with AI priority. Korea is the only country with sovereign platforms such as Naver, Kakao Talk, Line, and smartphones that Google cannot beat up. Samsung first installed an On-Device AI in its smartphone, Galaxy.
These platforms produce immeasurably synergic effects by cooperating with the semiconductor industry and AI business while smartphones work with two hundred million people’s information data in Asia. It initiated Korea’s independent battle for technological advantage and supremacy competing with Google which currently dominates the world with 92.54%. Korea’s public health insurance system by AI technology is also the top first in the world.
As well, Korea’s biggest internet search company, Naver unveiled an upgraded version of its hyperscale AI model HyperClova X. At the same time, it also disclosed CLOVA X, a large language model-based AI chatbot and CUE:, a generative AI search service powered by HyperClova X. They are all competing with global rivals such as OpenAI’s ChatGPT, Google’s Bard and Meta’s Llama. HyperClova X is based on supercomputing and data-analyzing capabilities and operational experiences from its all-in-one online platform, ranging from Korea’s largest search engine to cloud services, email, shopping, and other internet products.
Naver has spent $754 million on AI for operating profit and quality data by up-to-technologies for 5 years. HyperClova X is Naver’s strategic weapon to win the ongoing global battle for linguistic AI since the launch of ChatGPT in November 2022. Its detailed responses and articulate answers are powered by enormous amounts of data and computing techniques. Naver has been also cooperating with Samsung Electronics Co., the world’s No. 1 memory chipmaker toward global expansion so that it effectively develops semiconductor solutions tailored for hyperscale AI models and accelerates multiple handling of massive AI workloads.
Industrial Revolution for Human Life
On January 26, 2024, OpenAI CEO Samel Altman who developed ChatGPT visited Korea again to discuss potential partnerships for making chips. His passion is to dominate AI’s world market with $7 trillion, bigger than the total amount of Apple and Microsoft. Altman eagerly met the world’s top two leaders of memory chips, Samsung Electronics and SK Hynix which make high-bandwidth memory (HBM) chips used in AI chipsets with over 90% market share. SK Hynix has been a monopoly supplier of HBM3 to NVIDIA and mass production of 5G HBM3E as an exclusive supplier is coming up as well. Moreover, Samsung Electronics works on memory semiconductor and foundry business simultaneously.
OpenAI is now designing its own chip with highly advanced functions to take over the world chip market. In 2023, total revenue in the semiconductor market was only $500 billion and even expected to reach $1 trillion in 2030. But Altman is attracting vast investment of $7 trillion from worldwide investors and planning to establish a network of chip fabrication plants in Asia sooner or better. If his ambition comes true, the fundamental structure of the world’s semiconductor market will be totally changed and upgraded through a global semiconductor network.
Korea’s global chipmakers, Samsung Electronics and SK Hynix will spend a combined $471 billion to build “the world’s largest semiconductor cluster” in Southern Gyeonggi of Korea by 2047. The ultimate goal is to raise Korea’s self-sufficiency rate in the chip supply chain from 30 percent to 50 percent by 2030 and market share in the system-on-chip sector from 3 percent to 10 percent. The mega cluster is already running with 19 production facilities and 2 research labs, which will receive 3 additional production plants and 2 more research facilities by 2027. It will bring the region’s wafer production capacity to 7.7 million units per month by 2030, meanwhile 13 facilities and 3 research labs will be added to the site by 2047.
It is so obvious that OpenAI will cooperate with such a mega cluster to dominate the world chip market. Korea has absolute competitiveness in the semiconductor industry, which will push up Korea as a leading country in the world economy. Moreover, it explores variable fields of technology such as Information, Bio, Nano, Space, Environment, and even Culture not only to produce economic profits but also to upgrade general human life. Korea might be the core center of industrial revolution in the world, where technology, economy, and humans meet together in the near future.
India also gained limelight in the industrial revolution to become an innovation hub in the world market by adopting technologies at a global scale. It has demonstrated its strength with highest quality and efficiency by native technology experts as one of the largest exporters of IT and BPO services globally. India is well-positioned to leverage such success and cater more skill-intensive and digitized services to global society.
For example, the Indian workforce has solved the most complex problems and managed digital front-to-back-end functions of global corporations. It initiates India to transform from a technology back-office to a hybrid workforce powering the digital fabric of the world’s largest corporations as the global hub for technology experts. Outstanding numbers of robots and engineers are serving clients 24/7 in a hybrid workforce to become the robotics and AI capital of the world. Indian IT services are being platformed and the Indian Business to Business (‘B2B”) Software as a Service (“SaaS”) ecosystem has created its unique playbook. The first billion-dollar product company has emerged with over 20 India B2B SaaS unicorns, advancing a potent ecosystem for more hyper scalers to emerge over the next two decades.
Industrial Power and Global Leadership
Elon Musk, Samuel Altman, Bill Gates, and Mark Zukerberg are currently the most innovative CEOs with remarkable achievements in the world. There are still no such global-sized influential heroes in other countries. In addition, even though the top five semiconductor companies include Samsung, TSMC, NVIDIA, Intel, and Broadcom, except Samsung and TSMC, most of them among the top 20 are in the United States.
Surely, the industrial revolution bears from a long-time accumulated innovative environment and technological advancement. It results in a triple-synergic effect in design, production, and distribution with cutting-edge technology as standing for industrial power. Innovation and development are the most principal factors to become an industrial power and the United States maintains technological priority with excellent background to lead industrial revolution.
However, as the biggest challenger to the United States, Korea has its own platforms based on a large language model (LLM) of Korean and gigantic data to take over AI hegemony in the world market. Along with the fast expansion of K-culture, Korean LLM AI will go from Asia to the world. Korea’s AI technology applied to public health systems becomes an appropriate model for general human life as a leading country in the AI era. Korea’s health management of Covid-19 as a successful model will be also updated by AI technology to counter upcoming disasters in global society.
Therefore, industrial power should be based on global leadership. Technological revolution aims to improve human life and its advancement should focus on upgrading general human value. That is why Elron Musk is the icon of industrial power and global leadership. Someday, humankind will experience fantastic life in Mars or some other galaxy by technological adventurers who ponder what is the best human life. It might suddenly hit their brain with innovative technology, which could be AI or robot, but they are also human creatures in the boundary of technology.
Sunny Lee – Founder and President at CGPS (Center for Global Peace and Security), and Director at IKUPD (Institute for Korea-U.S. Political Development), Washington DC. Sunny Lee is the author of 115 academic books in politics (original English and in German, French, Russian, Polish, Dutch, Italian, Spanish, and Portuguese). She is a bestseller writer not only in politics but also in literature on Amazon. Her recent book is titled: “The Influence on Humankind’s Peace through Korean Reunification: Creating new paradigm in social science by interdisciplinary research.”
(The opinions expressed in this article are solely those of the author and do not necessarily reflect the views of World Geostrategic Insights).