Navigating Innovation and Regulation Under the AI Basic Act
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Writer
CFE
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Korea enacted the AI Framework Act on January 21, 2025, and, by putting it into effect on January 22, 2026, became the second country in the world after the EU to legislate a basic AI law. Its main contents can be summarized as follows: (1) establishing a system for AI development and a trust-based foundation, (2) promoting AI technology development and fostering the industry, and (3) measures to secure AI ethics and reliability.
Recent AI-related issues at home and abroad include, at the international level, (1) China’s DeepSeek developing and releasing a high-performance AI model at low cost, thereby intensifying the global hegemonic rivalry between the United States and China; (2) the second Trump administration in the United States repealing the former Biden administration’s AI executive order and pursuing deregulation policies; and (3) the EU also joining global competition as some member states strengthen industrial promotion policies rather than regulation. Domestically, controversy has arisen over whether the AI Framework Act places greater weight on industrial promotion or regulation, raising the task of finding an appropriate policy balance in the subordinate legislation.
With respect to the AI Framework Act, businesses have heightened expectations regarding (1) the partial easing of policy uncertainty through the establishment of legal standards, (2) the strengthening of AI promotion and support policies, and (3) improvements in AI competitiveness. At the same time, they have concerns about (4) the possibility that the scope of high-impact AI is ambiguous and may therefore be applied broadly, (5) the possibility that regulation may increase corporate burdens and create difficulties in attracting foreign investment, and (6) the insufficiency of meaningful communication with industry, resulting in inadequate reflection of industry views.
The international trend in AI regulation appears to be shifting from hard regulation to soft regulation. The economic policies of major countries are moving toward a new industrial policy paradigm that emphasizes fostering advanced industries such as AI and biotechnology and promoting the green transition rather than regulating new industries, focuses on economic security to respond to global supply chain crises, and accelerates efforts to create quality jobs.
From the perspective of regulatory economics as well, it is judged to be inefficient to control industries such as AI, which innovate at an unpredictable pace, through rigid regulation, and such an approach is likely to have significant negative effects on industrial development. In establishing subordinate legislation under the AI Framework Act, it is hoped that channels of communication between industry and the government will be strengthened so that policy will place greater emphasis on industrial promotion and regulation will be designed flexibly.
I. Introduction
II. Recent AI-Related Issues
1. Businesses’ Expectations
2. Businesses’ Concerns
III.
Mixed Expectations and Concerns Regarding the AI Framework Act
1. Businesses’ Expectations
2. Businesses’ Concerns
IV. AI Regulatory Trends in Major Countries
1. Global Legislative Trends Related to AI
2. Growing Possibility of a Shift from Hard Regulation to Soft Regulation
3. Changes in Global Trends in AI Regulation
V. Global Economic Policy Paradigm: A Return to New Industrial Policy
1. Increase in the Number of Industrial Policy Measures and the Factors Behind It
2. Conditions for Successful Industrial Policy
VI. Review of the AI Framework Act from the Perspective of Regulatory Economics
1. The “One Size Fits All” Nature of Regulation
2. A Proportional Regulatory Approach
References
Wiki:
https://www.cfe.org/w/bbsDetail.php?&idx=44
Original title: AI 기본법에 따른 혁신과 규제 사이의 방향
Author: Su-bong Jeon
Date: 2025-03-17
Source: https://www.cfe.org/bbs/bbsDetail.php?cid=report&pn=2&idx=27401