The Current State and Future of South Korean Companies through the Lens of the 2024 AI Readiness Index

TecAce Software
Dec 9, 2024
3 min read

Updated: Oct 2

Cisco's recently published "2024 AI Readiness Index" report evaluates how well companies worldwide are prepared to adopt artificial intelligence (AI). This report reaffirms the growing importance of AI adoption as a global issue. Here, we summarize the key findings by comparing the AI readiness of South Korean companies to global standards.

1. AI Readiness of South Korean and Global Companies

According to the report, only 3% of South Korean companies are ready to deploy and utilize AI technologies, a figure significantly lower than the Asia-Pacific average of 15% and the global average of 14%. In contrast, approximately 14% of global companies are assessed as sufficiently prepared for AI adoption.

While South Korean companies allocate a substantial portion of their IT budgets to AI-related projects, their low readiness indicates that these investments are not translating into tangible results. This suggests a lack of foundational infrastructure and capabilities required for effective AI utilization.

2. Key Comparison Points

(1) AI Investment

Around 43% of South Korean companies invest 10–30% of their IT budgets in AI-related projects. The primary investment areas include cybersecurity (23%), data management (22%), and data analytics (20%). These priorities align with global trends. However, global companies generally allocate a higher proportion of their budgets, contributing to their superior AI readiness.

(2) Infrastructure Readiness

South Korean companies lag in AI infrastructure readiness. Only 14% possess high-performance computing resources like GPUs, and merely 12% have robust security frameworks to protect AI model data. On the other hand, global companies demonstrate higher levels of preparedness, enabling greater feasibility for AI implementation.

(3) Talent Shortage

Both South Korean and global companies face challenges in securing AI specialists. South Korean companies are attempting to upskill existing employees and provide retraining programs but face severe talent drain due to global competition. In contrast, global companies actively allocate budgets for AI talent development and strengthen talent acquisition through collaborative initiatives.

(4) Data Management and Governance

Eighty-one percent of South Korean companies struggle with data dispersed across various departments, impeding effective AI utilization. While global companies also face challenges with data dispersion and quality, they take proactive measures, such as implementing AI governance policies, to address these issues. Meanwhile, 76% of South Korean companies still lack comprehensive AI policies.

3. Challenges for South Korean Companies

South Korean companies rank below the global average in the AI Readiness Index, emphasizing the need for not only technological and infrastructural preparation but also strategic thinking and execution capabilities.

Infrastructure Investment: South Korean companies must overcome hurdles like inadequate computing resources and weak security systems for AI applications. Flexible solutions like cloud services should be actively adopted to address these issues.
AI Talent Development: Upskilling current employees, increasing collaboration with external experts, and implementing policies to retain domestic talent are critical.
Improved Data Management: Ensuring high-quality data and accessibility is essential for successful AI implementation. Companies need to resolve data dispersion issues and establish centralized data management systems.
AI Governance Policies: Clear policies addressing data privacy and ethical issues must be established and executed at the corporate level.

4. Global Trends and Benchmarking

Global companies employ various innovative strategies to prepare for AI adoption. Key trends include building cloud-based AI infrastructures, utilizing open-source AI models, and fostering AI-focused organizational cultures. South Korean companies can benchmark these global practices to derive technological, cultural, and strategic improvements.

5. Conclusion

The 2024 AI Readiness Index highlights areas where South Korean companies must improve to adopt AI effectively. Their lower readiness compared to the global average points to key challenges that need to be addressed to secure future AI competitiveness. AI is no longer an option but a necessity. South Korean companies must strengthen their technological, strategic, and cultural readiness to fully harness the potential of AI.

We hope South Korean companies will continue their efforts to secure global competitiveness in AI readiness through strategic investments and focused execution.