[Indo-Pacific Strategy Special Report] ③ Building an Ecosystem for Inclusive and Cooperative Technological Innovation

I. Core Objective: Building an Ecosystem for Inclusive and Cooperative Technological Innovation

The United States and China are engaged in fierce competition in advanced technology sectors, including semiconductors, while simultaneously promoting different norms in new technology sectors such as artificial intelligence, 5G, and cybersecurity—'freedom versus national sovereignty and control.' This indicates that the US-China tech competition is unfolding across the board, from hardware to technological norms. The US, in particular, is striving to solidify its technological superiority and spread its technological norms through alliances. It is expanding technological cooperation through initiatives such as the US-EU Trade and Technology Council (TTC), the Quad's Critical and Emerging Technologies Working Group, AUKUS (Australia, UK, US), the semiconductor cooperation network Chip 4 (or Fab4) involving South Korea, Japan, and Taiwan, and the Indo-Pacific Economic Framework (IPEF). China, while opposing the various technology cooperation networks led by the US, is strengthening technological cooperation within the Belt and Road Initiative and attempting to build a separate digital economic sphere. As the global technological innovation system is being readjusted due to intensifying US-China tech competition and the rise of technological geopolitics, many countries, including South Korea, face the challenge of building and developing technology cooperation networks that align with their national interests and the values and norms they pursue.

In the era of US-China tech competition, the challenge facing South Korea, a middle power, goes beyond simply choosing between the US and China; it requires identifying South Korea's core interests and pursuing global and regional technology cooperation strategies centered around them. Currently, South Korea possesses world-class technological capabilities in several advanced sectors like semiconductors and has excellent digital infrastructure. However, it lags significantly behind the leaders in terms of technological level, capital, talent, and market size. Furthermore, it is struggling to keep pace with the flow of technological development without presenting a vision for the future it aims to create with new technologies. South Korea must maintain its competitiveness in select advanced technology fields while presenting and expanding a technological vision that combines its advanced digital infrastructure with the values it pursues, such as peace, prosperity, and democracy.

Until now, South Korea's regional strategy has been confined to the East Asian space, including South Korea, China, Japan, and North Korea. In the era of US-China tech competition, South Korea must seek spaces that support the sustained acquisition of technological superiority and allow for the sharing and expansion of its technological vision. The strategic competition between the US and China compels middle powers like South Korea to more proactively define and integrate the scope of their global and regional strategies. The strategic importance of the Indo-Pacific space, which integrates the Northeast Asian space centered on the two Koreas, China, Japan, and the US, with the ASEAN space and extends to include parts of the Indian and Pacific nations, is growing. The Indo-Pacific is referred to as the 'Global Indo-Pacific' as it is a space where South Korea's global and regional strategies can be integrated.

In advanced technology sectors, US regulations on exports, investments, and personnel to China increase the cost of technological innovation, while China's intellectual property infringement threatens technological innovation activities. The norms of freedom promoted by the US in digital technology sectors risk strengthening the monopoly of big tech, while the national sovereignty asserted by China moves towards increased state control. Amidst the US-China competition, South Korea must establish a system where technological innovation can be maintained stably. Furthermore, it should take the lead in developing and realizing technological norms that support the coexistence and mutual prosperity of various companies, rather than the monopoly of big tech or strong state control, and persuade regional countries based on these norms. The core of South Korea's Global Indo-Pacific technology strategy is to avoid excluding specific countries or allowing any single country to dominate, and instead to create an inclusive and cooperative technological innovation ecosystem where all members can prosper together, thereby laying the foundation for shared prosperity. An open technological ecosystem where technological competition and cooperation dynamically unfold must be maintained in this region, allowing each country to grow sustainably within it. In an era of overwhelming technological geopolitics driven by competition, exclusion, and exclusive choices, South Korea must contribute to the formation of an inclusive and cooperative technological ecosystem in the Indo-Pacific region, guiding it towards sustained technological innovation through a dynamic balance of competition and cooperation, and thereby fostering a peaceful and prosperous region.

II. Principles of South Korea's Global Indo-Pacific Technology Strategy: Openness, Rules-Based, Coexistence

Amidst intensifying US-China tech competition and ongoing US containment of China, supply chains in certain strategic advanced technology sectors are becoming bifurcated between the US and China. Restrictions on Chinese exports of advanced technologies, regulations on investments by Chinese-funded companies in US advanced sectors, and limitations on US-China personnel exchanges are leading to the bloc-ization of open innovation systems. In a free market economy, advanced technologies, capital, and talent moved freely across borders, and companies strived to achieve technological innovation at minimal cost. However, recently, restrictions have begun to be placed on the movement of capital, talent, and technology. In particular, an increasing number of countries are approaching the acquisition of advanced technology and talent from a national security perspective, leading to movements to control the outflow of their own technology, capital, and talent through various regulations and to secure advanced strategic technologies and talent within their borders. The US government's export restrictions on China have created barriers for China's technological rise, while US companies primarily exporting to the Chinese market have also faced significant difficulties. In other words, the control of cross-border technology, capital, and talent flows invariably results in the side effect of high-cost technological innovation for all countries, returning as a boomerang effect. While avoiding the excessive securitization of advanced technologies, open technological cooperation should be revitalized in areas beyond a select few advanced technologies crucial to national interests. Maintaining an open global innovation system is essential for sustained technological innovation and economic growth.

Even amidst fierce advanced technology competition among nations, it is necessary for this competition to occur based on open and fair rules. Each country should fully utilize its available resources while respecting and not violating existing norms, such as intellectual property rights systems, in its pursuit of technological innovation. Furthermore, through thorough discussions on the civilizational challenges that may arise in the development and utilization of technologies like AI and biotechnology, norms for these technological fields should be established. South Korea should identify the fundamental technology-related norms required in various fields based on consensus among regional countries and lead discussions on them. In particular, it should lead efforts to consolidate a rules-based order in technology development and cooperation by discussing and establishing norms and rules for new technology fields such as AI, cyber, and quantum computing, and by strengthening cooperation in technological standards and intellectual property rights systems.

Numerous barriers exist for the future development of technological cooperation in the Indo-Pacific region. Given that countries in the region possess diverse industrial structures and technological innovation capabilities, it is difficult to be optimistic about the smooth progress of technological cooperation among regional countries on key agenda items such as supply chain stability and advanced technology development cooperation. Pessimistic views suggest that practical Indo-Pacific technological cooperation is difficult due to the disparities in technological innovation capabilities among countries in the region, competition in advanced technological innovation among regional countries beyond China's influence, and differences in political systems and cultures.

The Indo-Pacific region is composed of diverse country groups: countries actively investing in and leading technological innovation, such as the US, Japan, South Korea, Singapore, and Australia; countries aggressively pursuing technological advancement based on vast capital and human resources, such as China and India; countries increasing investment in technological innovation, such as Malaysia, Indonesia, Vietnam, and Thailand; and countries with very low levels of technological development and innovation capacity, such as Laos and Cambodia. While it is important for leading countries in the region to drive overall technological advancement and develop cutting-edge technologies through cooperation and competition, it is equally important to pay attention to countries with lower levels of technological development and innovation capacity and to provide joint support from regional countries. When the innovation capacities of less developed countries are enhanced through regional solidarity, diverse levels of technological innovation can be activated throughout the region, establishing a sustainable technological innovation system. South Korea is already supporting less developed countries in the region through Official Development Assistance (ODA) for science and technology, but this needs to be further developed and expanded. South Korea's Global Indo-Pacific technology strategy must consider the technological gap among regional countries, particularly accommodating those with lower levels of technological development, and support and guide them to appropriately enter the regional technological innovation system. It is crucial to persuade all countries that the region's technological innovation system can develop more dynamically and sustainably when everyone participates in technological cooperation, and to strive towards this goal.

III. Content of South Korea's Global Indo-Pacific Technology Strategy

1. Complex Technological Cooperation Networks: Bilateral, Trilateral, and Multilateral

Bilateral, trilateral, and multilateral technological cooperation is already underway in various technology sectors within the Indo-Pacific region. Bilateral cooperation includes South Korea-US, US-Japan, South Korea-Australia, India-Australia, and Australia-Singapore. Trilateral cooperation includes the Quad's Critical and Emerging Technologies Working Group, the Supply Chain Initiative among Japan, India, and Australia, and the Blue Dot Network of the US, Japan, and Australia. Multilateral cooperation includes platforms such as the ASEAN Regional Forum Information and Communications Technologies Work Stream, the ASEAN-Australia Digital Standards Initiative, and the Multilateral Action on Sensitive Technologies (MAST). Cooperation in the Indo-Pacific region can encompass all countries in the region, but it inevitably takes the form of complex technological cooperation networks involving various bilateral, trilateral, and multilateral arrangements depending on the sector. Furthermore, Indo-Pacific technological cooperation must develop by actively participating in and mutually influencing technological cooperation at the global level, such as within the G7 and G20, and movements to establish international norms in advanced technology fields, extending beyond the Indo-Pacific region.

2. Multi-layered Technological Cooperation Networks by Sector

South Korea's Indo-Pacific technology cooperation should leverage existing collaborations in various sectors such as semiconductor supply chains, AI, 5G, cybersecurity, quantum computing, clean energy, digital trade platforms, and biotechnology. Reflecting its status as a middle power, South Korea should serve as a bridge between developed and developing countries. Moreover, in an era of great power competition and rising technological geopolitics, it must actively participate in establishing technological norms based on values such as freedom, openness, peace, prosperity, and solidarity for mutual coexistence, and build multi-layered networks that can inclusively expand technological cooperation.

For instance, in the semiconductor sector, the Indo-Pacific region currently includes the US as a leader in global semiconductor supply chains, China as the largest consumer of semiconductors, and Japan, South Korea, Singapore, Malaysia, and Vietnam playing crucial roles in design, materials, processes, assembly, and markets, respectively. The Indo-Pacific is undeniably the center of the global semiconductor supply chain, and the role of Indo-Pacific countries is expected to become even more important in the US-led reorganization of the semiconductor supply chain. The Chip 4, involving South Korea, Japan, Taiwan, and the US, has already been formed for semiconductor supply chain cooperation, and the Supply Chain Resilience Initiative among India, Japan, and Australia also includes provisions for advanced technology supply chain cooperation. While participating in the US-led Chip 4 to enhance semiconductor technological innovation capabilities, South Korea must also play a role in ensuring that Chip 4 does not become an explicit anti-China semiconductor alliance, considering the importance of manufacturing facilities operating in China, the Chinese market, and China's opposition to Chip 4. On the other hand, to minimize risks arising from US-China semiconductor conflicts, cooperation with countries like Vietnam and Malaysia in semiconductor manufacturing and assembly should be enhanced, preparing a framework to mitigate these risks. While some decoupling between the US and China in the most advanced semiconductor sector is inevitable, cooperation with Indo-Pacific countries in other semiconductor areas should be strengthened to devise a model for coexistence of competition and cooperation in the Indo-Pacific semiconductor supply chain.

The US has sought to curb the expansion of China's 5G technology by promoting the Clean Network initiative, which has influenced the development of 5G infrastructure in the Indo-Pacific region. Since adopting the ASEAN Digital Integration Framework Action Plan in 2019, ASEAN has been pursuing regional digital integration through cooperation in areas such as technology standardization. China has been strengthening digital infrastructure linkages with Indo-Pacific countries through its Digital Silk Road initiative since 2015. Chinese companies have an overwhelming influence in the 5G infrastructure, data centers, and e-commerce sectors within the Indo-Pacific region, including ASEAN, and this influence persists despite the pandemic and US-China tech competition. Huawei has been a close collaborator with regional countries as the largest supplier of cloud (data center) and telecommunications infrastructure equipment in the Indo-Pacific. Following the US's full-scale sanctions on Huawei's telecommunications equipment, most Indo-Pacific countries have adopted a diversification strategy, cooperating with European telecommunications companies to mitigate risks, rather than severing ties with China. The US-China competition is leading to diversification of 5G infrastructure in the Indo-Pacific region, opening new opportunities for Korean companies. Korean companies have also established themselves as influential partners in the development of telecommunications infrastructure in Indo-Pacific countries, with significant market share in countries like Brunei, the Philippines, Myanmar, and Indonesia. The South Korean government and companies should promote that the 5G digital infrastructure provided by South Korea operates based on values of freedom, openness, and security, and leverage their established influence in ASEAN to pursue strategies for expanding cooperation in the 5G digital sector with other Indo-Pacific countries.

China is fiercely challenging the US in the field of artificial intelligence more than in any other sector. In application areas such as facial and voice recognition and fintech, China is already ahead of the US. As competition in both technology and norms unfolds in the AI sector, US and Chinese efforts to strengthen their influence in AI technology and norms within the Indo-Pacific region are clashing. The recently established China-ASEAN Artificial Intelligence Computing Center will enhance China's AI technology influence in ASEAN by providing comprehensive computing services based on Chinese AI technology, and by establishing platforms for application innovation incubation, industrial cluster development, and technological innovation and talent cultivation. The US has also agreed to strengthen bilateral cooperation in artificial intelligence at the US-ASEAN Summit. While the US-China AI technology competition intensifies, the differences in their approaches to AI technology utilization norms are also emerging as a major point of conflict. The US criticizes China's AI technology for being used for social control, thereby strengthening digital authoritarianism. South Korea has collaborated with ASEAN countries on joint research in areas such as AI-based smart livestock farming, big data-based textile quality management, low-temperature geothermal power plants, and intelligent LED road lighting. South Korea must continue to strengthen joint research in AI technology with the Indo-Pacific region, including ASEAN, and actively participate in efforts to establish joint norms with Indo-Pacific countries to prevent AI technology from being used for social control or human rights violations.■

■ Author: Bae Young-ja, Professor of Political Science and International Relations at Konkuk University. She graduated from Seoul National University with a degree in Diplomacy and earned a Ph.D. in Political Science from the University of North Carolina. Her main research areas include international political economy, the political economy of foreign investment, science and technology and international politics, the internet and international politics, and science and technology diplomacy. Her major publications include "International Political Hegemony and Technological Innovation: A Case Study of US Semiconductor Technology" (2020), "The Rise of Chinese Internet Companies and Internet Sovereignty" (2018), "US-China Hegemonic Competition and Scientific and Technological Innovation" (2016), and "Science and Technology and Public Diplomacy" (2013).

■ Managed and Edited by: Park Han-soo, EAI Research Assistant

Contact: 02 2277 1683 (ext. 208) | hspark@eai.or.kr