At an open forum titled "How to Prepare for the Era of AI Transformation: Focusing on Competency Development and Income Security," hosted today (October 26) by the National Economic Advisory Council, a presidential advisory constitutional body, an analysis suggested that investing only in equipment such as semiconductors may fail to create a virtuous cycle where economic growth leads to broader employment and income in the era of artificial intelligence (AI) transformation.

Jang Ji-yeon, a senior research fellow at the Korea Labor Institute who gave the forum's first presentation, pointed out that economic growth is failing to translate into employment and income in the era of AI transformation, stressing the need to restore growth pathways through work and skills.

"To respond to declining new hiring and employment instability caused by AI, investment in people must serve as the foundation for future growth," Jang said. "A dedicated portion for nurturing talent to develop human potential should be prioritized in the future response fund."

Senior Research Fellow Jang proposed measures to connect small and medium-sized enterprises' (SMEs) AI transformation (AX) with young people's first jobs and opportunities for middle-aged and older individuals to utilize their skills.

This approach shifts support from being centered on equipment and training for incumbent workers toward supporting SME AI transformation and organizational redesign.

"We can expect this to enhance SMEs' AX capabilities while providing young people with opportunities for career development and offering middle-aged and older workers jobs that leverage their skills," Jang said.

She also suggested a plan to universalize employment insurance by restructuring the existing wage-earner-centered system into an income-based model, utilizing National Tax Service income data.

Yeo Yu-jin, a senior research fellow at the Korea Institute for Health and Social Affairs, served as the second speaker and diagnosed that while the substitutability of human labor and the risk of polarization are increasing in the AI era, feasible solutions are virtually nonexistent, resulting in a "vacuum of alternatives."

Senior Research Fellow Yeo emphasized strengthening the fundamental function of income security and proposed creating a sovereign wealth fund dedicated to expanding the social safety net by utilizing a portion of the future response fund.

She noted that accelerating AX could deepen polarization through a declining labor share of income and widening gaps among companies, making it urgent to seek alternatives to reinforce the fiscal base and redistribution mechanisms.

Hong Gyeong-joon, a professor of social welfare at Sungkyunkwan University, delivered the third presentation and proposed introducing a "National Activity Benefit" system—which guarantees income during periods of vocational skills development, child rearing, and caregiving—as a new income security alternative to alleviate polarization in the AI era.

Professor Hong explained that the first-stage National Competency Benefit would pay a certain level of benefit for up to 12 months over a lifetime to support career transition training for employed or job-changing workers and entry-level training for new youth entrants. The second-stage National Activity Benefit would expand eligibility beyond vocational training to childcare and caregiving, providing payments for up to 24 months.

In the ensuing discussion, Professor Choi Young-jun of Yonsei University emphasized a strategy of raising the "social wage"—jointly guaranteed through cash benefits, social security, and public services—to distribute the gains of technological progress across society.

Professor Nam Chan-seob of Dong-A University predicted that automatically generating eligibility and contribution records using income reported to the National Tax Service and converting corporate contributions into an earmarked tax model would reduce blind spots in social insurance and help expand fiscal resources.

Based on the policy proposals discussed at the forum, the National Economic Advisory Council plans to further flesh out inclusive growth measures in response to the era of AI transformation and actively reflect them in future presidential consultations and policy proposals.

"We must jointly contemplate how the AI transformation can improve the public's work, income, and lives," said Kim Sung-sik, vice chair of the council. "Investment in equipment and investment in people must go hand in hand, and we must create a virtuous cycle where investments in human capabilities and the social safety net serve as the foundation for new growth."

(Photo courtesy of National Economic Advisory Council, Yonhap News)