COVID-19, an unprecedented global pandemic, has made a great social, economic and political impact around the world. Social distancing practiced to prevent the spread of the pandemic, rather than the pandemic itself, has brought about fundamental chan...
COVID-19, an unprecedented global pandemic, has made a great social, economic and political impact around the world. Social distancing practiced to prevent the spread of the pandemic, rather than the pandemic itself, has brought about fundamental changes to our society. Social distancing has transformed the way we consume and produce goods and services, i.e., from face-to-face to non-contact consumption and production, resulting in growing demand for digital transformation. Nevertheless, the private sector is still faced with an array of obstacles to digital transformation, with only 17% of corporations taking action to achieve it.
Chapter 2 discusses the importance of digital transformation and looks into pre- and post-COVID-19 trends from both the micro and macro perspectives. First, it reviews the definition of digital transformation and its implications in the economic and social contexts. Next, it presents the methodology of a macro analysis based on the Inter-Industry Table and empirical data, which was conducted from a network perspective to identify the economic ripple effects of digital transformation. The results of this empirical analysis show that the Korean economy is structured in such a way that a shock to productivity in any given industry trickles down to demand. It is particularly noteworthy that increased productivity in the ICT industry has had a positive impact not only on industries closely related to ICT but also on other industries that use ICT capital intensively, including finance and insurance, and science and technology services.
The second half of Chapter 2 examines the impact of digital transformation in such areas as AI, Fintech and logistics from a micro point of view. First, the review of AI trends focuses on analyzing the widespread use of AI and the resulting economic effects, and raises policy implications. Next, it examines the trends of digital transformation and industry structure from the perspective of IT-finance convergence. Lastly, as the impact of the pandemic has been especially evident in the e-commerce and logistics sectors, it analyzes the inevitable changes triggered by the pandemic in these sectors. In addition, attempts are made to examine the possibility of, and limitations on, achieving logistical innovation through digital transformation.
Chapter 3 reviews the digital transformation status of small and medium-sized companies and the related policies, and identifies the incentives and restrictions involved in their digital trans
formation process. The empirical analysis in this chapter looks into the impact of digital transformation on small and medium-sized businesses in terms of sales, operating profits, and employment. The samples were divided into companies that operate a smart factory and a control group, using the PSM method, and a quantitative analysis was performed on the changes experienced by companies after they began operating a smart factory built with government assistance. The results show that the introduction of a smart factory led to increases in sales and employment, but not to an increase in operating profit. This finding suggests that the government should provide further incentives to encourage companies to make follow-up investments and pursue technological sophistication in order to ensure successful smart manufacturing innovation.
Lastly, national strategies for a grand digital transformation have been developed, based on a combination of research findings and the outcomes of the seven sessions of the Venture Forum. To promote digital transformation across the board, our strategies focus on improving the innovation capacity of the manufacturing system, creating industry-specific infrastructures, including efficient management of public digital data assets, and a thorough reform of data regulation. On the flip side are side effects that could go unaddressed amid the accelerating digital transformation, and ways to cope with these side effects are discussed. This paper ends by raising other issues that our society may face in the process of building a society of digital co-prosperity, such as the
potentially harmful consequences of technologies adopted in new industries, the widening of the digital divide, and labor market polarization, and proposes the creation of bio-monitoring systems and ways to deal with such issues.