Kim Yong-beom: In the AI Era, the State Should Organize Production Relations

Kim Yong-beom, the Chief of Policy at the Blue House, asserted on July 18 that in the age of artificial intelligence (AI), the role of the state should be to organize production relations rather than act as a producer itself.

In a Facebook post, Kim stated, "In the AI era, the state's role lies in organizing relationships where production capacity is continuously formed and reproduced. A nation's competitiveness depends not on how much it produces, but on how stably it establishes and maintains those production relations."

He explained that discussions about the role of the state in the AI era are divided into two schools of thought: one advocating for active support of the AI industry, termed 'industrial policy,' and the other emphasizing the need to strengthen welfare and redistribution in response to job losses and income disparities caused by AI, referred to as 'social policy.'

While he acknowledged that both arguments are necessary, he pointed out that they alone do not sufficiently explain the changes in the state's role demanded by the AI production revolution.

He emphasized the need to design pathways for the formation of production capacity, connect production factors, and socially establish production conditions that the market can no longer reproduce on its own.

Kim predicted that AI would replace entry-level jobs in the labor market before impacting existing positions. He noted that new employees typically perform basic tasks such as data research and translation while learning the organization's workflow, but generative AI is quickly replacing or supplementing these tasks, reducing companies' incentives to invest in long-term training for new hires.

He pointed out that if all memory reduces the hiring of new employees, future skilled workers cannot be developed. He stated, "The state must organize a separate labor market in collaboration with businesses, public institutions, research organizations, and local industries, providing not only wages but also real work experiences, on-site mentoring, organizational experiences, responsible tasks, and career paths leading to the private sector."

He added, "It is crucial to socially reconstruct the pathways for skill formation weakened by AI, ensuring that young people are guaranteed their first opportunities for growth and restoring the pathways for skill and production capacity to be reproduced across society."

Kim highlighted that while AI is part of the 'bit industry' composed of software and data, it also requires substantial physical infrastructure. He stated, "To build AI data centers, industrial land, high-voltage transmission networks, cooling facilities, optical communication networks, and power generation equipment must be established together," emphasizing that simply securing GPUs and semiconductors does not create AI production capacity.

This indicates that future corporate production capacity will heavily depend not only on individual companies' technologies and facilities but also on the power grid, data, research, and development provided by society as a whole.

In this context, Kim concluded that the state's role is not to directly manufacture semiconductors or operate AI services but to organize power, data, computing infrastructure, and long-term finance to function as a cohesive production system.

He remarked, "If society invests significant costs and institutional capabilities to form specific production capacities, there must also be mechanisms to connect the achievements created by businesses with their social contributions," stressing the importance of creating a 'feedback loop' that leads to the formation of the next production capacity.