South Korea's government support for nurturing the physical artificial intelligence industry falls short of rival countries, business leaders said, calling for urgent legal and institutional changes.
The Federation of Korean Industries said on the 22nd that it had submitted its 2027 Business Policy Proposals to the government and the National Assembly after gathering views from corporate sites. Timed to next year's policy planning, the document contains 119 items requiring improvement across 10 areas, including the AI transformation, strengthening competitiveness in advanced and energy industries, corporate regulatory reform, the labor market and household stability.
The FKI said South Korea lacks a systematic support framework for physical AI, which has emerged as a core technology in the AI field. China in May adopted an ordinance promoting the development of the embodied intelligence robot industry in Hangzhou and moved to build high-quality training data and testing bases, while Japan established an AI Robotics Strategy in March and overhauled its legal framework. South Korea, by contrast, still has support provisions related to physical AI scattered across AI, robotics, self-driving cars, drones and other fields.
"We need a system that comprehensively supports the physical AI industry ecosystem, including designation and operation of pilot zones, an advanced performance certification system, and special provisions allowing the use of personal and video data for training," the FKI said. "An institutional foundation must be built, including legislation to underpin support for physical AI."
On labor and taxation, the FKI asked the government to revise laws in a way that supports companies, pointing to the dispute over staffing at the Honam semiconductor cluster that has recently flared up around the Samsung Electronics union. Specifically, it called for a further revision of the so-called Yellow Envelope Act to exclude relocations of work sites arising from plant transfers or new plant construction from labor-management bargaining.
The Samsung Electronics union has said relocation to the Honam cluster is a matter requiring labor-management consultation and is pursuing negotiations with management. The revised Trade Union and Labor Relations Adjustment Act currently defines "management decisions affecting working conditions" as subject to labor disputes. If labor-management friction delays Samsung Electronics' staffing plans, the Gwangju semiconductor cluster project could be set back.
The FKI also said a legal basis is needed to fund the dismantling of facilities and environmental restoration costs arising from the government-led restructuring of the petrochemical industry. It further proposed expanding the space budget, which stands at just 0.8% of the U.S. level, and introducing a system requiring prior review before new regulations are adopted. In the area of household welfare, it suggested revising the matching support structure of the Youth Future Savings program, under which government support shrinks as the amount saved decreases.