By Robert D. Atkinson
Last year tens of millions of people outside Korea watched and enjoyed "Squid Game." Hopefully this year other nations will "watch" and learn from Korea's new and innovative "untact" initiative.
Untact ― a combination of the prefix "un" and the word "contact" ― is the concept of engaging in economic activities without direct contact with others, such as using self-service vehicles, e-commerce, kiosks, and contactless payments.
President Moon Jae-in's "New Deal" economic plan includes a commitment to "promote untact industries" such as remote health and senior care, virtual offices and e-commerce support for small businesses. The administration has also supported "untact" biometric systems in airports. And Korea's Ministry of SMEs and Startups is investing 9 trillion won ($7.6 billion) in an "untact growth fund."
With the emergence and improvement of a suite of new technologies, including touch screens, 5G, robotics, sensors, and AI, the potential for untact applications has grown significantly. And of course COVID-19 has supplied a demand pull for this new kind of commerce.
Korea is now a leader in this socio-technical movement. Robots brew and serve coffee in cafes and cook fast food. At Yongin Severance Hospital, a 5G-powered disinfection robot ― sprays hand sanitizer, checks body temperature, and polices social distancing.
Mobile carrier LG Uplus has opened several untact phone shops, where customers can buy cell phones and cellular plans in a self-service format. Some local governments have established AI call bots to monitor the health conditions of individuals who are isolating because of COVID-19.
As the Information Technology and Innovation Foundation wrote over a decade ago:
Self-service technology offers a broad set of benefits to consumers and businesses and has the potential to contribute even more to our national prosperity and quality of life. While self-service technology is widespread, it is still relatively new and will only continue to improve in quality over time.
However, policymakers must avoid enacting policies to restrict self-service while at the same time putting in place appropriate policies to stimulate the self-service economy to realize these benefits.
The Korean government is in fact putting in place appropriate policies to stimulate the self-service (untact) economy. This is critical for two reasons. First, "self-servicizing" the economy will be key to boosting Korea's productivity. And that's critical, because Korean productivity growth has slowed in the last decade.
While Korean productivity growth rates used to regularly be three or four or even five times higher than U.S. growth rates, over the last seven years they have been just 1.3 times higher.
Moreover, according to the OECD, in 40 years Korea will have the highest old-age dependency ratio (elderly to working age population) of any OECD nation. The only sustainable way to address this challenge is through higher productivity, and untact technologies hold great promise for doing that.
The second reason is that Korea has an opportunity to be a leader in untact industries. While Korea may be leading in untact, it is inevitable that all developed and middle-income nations will be moving to an untact economy. Having a robust Korean untact economy will be a real strength to enable Korean firms to become global leaders.
But to do this, it is critical that Korean policymakers do not lose faith, especially as a range of opponents will criticize the technology. The strongest opposition will come from "neo-Luddites" who reflectively look at many technological advances with fear and loathing.
As one article asked: "Does an untact society sound a bit dystopian? Yes; yes, it does." Actually, no; no it does not. Untact is no more dystopian than self-service elevators or automatic bowling pin setters.
A second form of opposition is related: What about jobs, opponents ask? The reality is that the scholarly evidence could not be clearer: Automation does not lead to fewer jobs in an economy. It does lead to higher incomes and better jobs.
As such, Korea should continue its untact innovation, and other countries, including the United States, should learn from Korea's leadership in this area.
Robert D. Atkinson (@RobAtkinsonITIF) is president of the Information Technology and Innovation Foundation (ITIF), an independent, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy.
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Untact ― a combination of the prefix "un" and the word "contact" ― is the concept of engaging in economic activities without direct contact with others, such as using self-service vehicles, e-commerce, kiosks, and contactless payments.
President Moon Jae-in's "New Deal" economic plan includes a commitment to "promote untact industries" such as remote health and senior care, virtual offices and e-commerce support for small businesses. The administration has also supported "untact" biometric systems in airports. And Korea's Ministry of SMEs and Startups is investing 9 trillion won ($7.6 billion) in an "untact growth fund."
With the emergence and improvement of a suite of new technologies, including touch screens, 5G, robotics, sensors, and AI, the potential for untact applications has grown significantly. And of course COVID-19 has supplied a demand pull for this new kind of commerce.
Korea is now a leader in this socio-technical movement. Robots brew and serve coffee in cafes and cook fast food. At Yongin Severance Hospital, a 5G-powered disinfection robot ― sprays hand sanitizer, checks body temperature, and polices social distancing.
Mobile carrier LG Uplus has opened several untact phone shops, where customers can buy cell phones and cellular plans in a self-service format. Some local governments have established AI call bots to monitor the health conditions of individuals who are isolating because of COVID-19.
As the Information Technology and Innovation Foundation wrote over a decade ago:
Self-service technology offers a broad set of benefits to consumers and businesses and has the potential to contribute even more to our national prosperity and quality of life. While self-service technology is widespread, it is still relatively new and will only continue to improve in quality over time.
However, policymakers must avoid enacting policies to restrict self-service while at the same time putting in place appropriate policies to stimulate the self-service economy to realize these benefits.
The Korean government is in fact putting in place appropriate policies to stimulate the self-service (untact) economy. This is critical for two reasons. First, "self-servicizing" the economy will be key to boosting Korea's productivity. And that's critical, because Korean productivity growth has slowed in the last decade.
While Korean productivity growth rates used to regularly be three or four or even five times higher than U.S. growth rates, over the last seven years they have been just 1.3 times higher.
Moreover, according to the OECD, in 40 years Korea will have the highest old-age dependency ratio (elderly to working age population) of any OECD nation. The only sustainable way to address this challenge is through higher productivity, and untact technologies hold great promise for doing that.
The second reason is that Korea has an opportunity to be a leader in untact industries. While Korea may be leading in untact, it is inevitable that all developed and middle-income nations will be moving to an untact economy. Having a robust Korean untact economy will be a real strength to enable Korean firms to become global leaders.
But to do this, it is critical that Korean policymakers do not lose faith, especially as a range of opponents will criticize the technology. The strongest opposition will come from "neo-Luddites" who reflectively look at many technological advances with fear and loathing.
As one article asked: "Does an untact society sound a bit dystopian? Yes; yes, it does." Actually, no; no it does not. Untact is no more dystopian than self-service elevators or automatic bowling pin setters.
A second form of opposition is related: What about jobs, opponents ask? The reality is that the scholarly evidence could not be clearer: Automation does not lead to fewer jobs in an economy. It does lead to higher incomes and better jobs.
As such, Korea should continue its untact innovation, and other countries, including the United States, should learn from Korea's leadership in this area.
Robert D. Atkinson (@RobAtkinsonITIF) is president of the Information Technology and Innovation Foundation (ITIF), an independent, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy.
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