Minister Kim Jungkwan: "In the AI Era, Corporate Profits Must Fuel Future Investments... Labor Systems Must Change Too" (Comprehensive)

Amid Debate Over Clawback of Excess Profits,
“Corporate Profits Should Fund AI Investments”
“Must Lead to R&D and Talent Development”

Kim Junggwan, Minister of Trade, Industry and Energy, is delivering a greeting at the 'Discussion on Corporate Investment and the Future of Labor in the AI Era' held on the 25th at the SK Securities Building in Yeongdeungpo-gu, Seoul. Ministry of Trade, Industry and Energy.

Kim Jungkwan, Minister of Trade, Industry and Energy, has named "future corporate investment" and "innovation in labor and labor-management culture" as key tasks that will determine the nation's competitiveness in the era of artificial intelligence (AI). He indirectly drew a line against recent discussions in political circles about clawing back corporations' excess profits. According to Kim, profits earned by companies should be reinvested in future industries such as semiconductors and AI. Furthermore, the labor market must move away from systems rooted in the industrial age and instead build both flexibility and security suitable for the AI era.

At the "Discussion on Corporate Investment and the Future of Labor in the AI Era" held on July 15 at Korea Growth Investment Corporation in Seoul, Minister Kim emphasized, "In order to secure national competitiveness in the AI era, companies must expand investment in their future and labor systems must be innovated at the same time. Corporate profits should be used as investment for future growth, and the labor-management culture and labor systems that remain stuck in the industrial era must also be transformed to be appropriate for the AI era."

He remarked, "AI is not just another new technology; it is rewriting the rules for how companies compete, how industries are structured, the very concept of labor, and the benchmark for national competitiveness. The AI competition unfolding around the world now is not just about which country develops a new technology first, but a contest over who will take the initiative in leading the global economy for the coming decades."

Minister Kim presented three key questions that South Korea must answer in the era of the AI revolution: ▲ What should companies invest in and how? ▲ How must labor change? ▲ How should labor-management relations be redefined?

He first called upon companies to make bold reinvestments for the future. "The AI revolution demands investments on a scale beyond imagination: semiconductor fabs, AI data centers, power grids, advanced manufacturing facilities, research and development (R&D), and developing new talent. Today's profits must become tomorrow's semiconductor factories and AI data centers, leading to world-class research & development and talent cultivation," he stressed.

He referred to the biblical story of Joseph's seven years of plenty and seven years of famine, saying, "the years of abundance are not simply a time for enjoyment, but a time to prepare for the future." He also cited the example of the United Kingdom's North Sea oil development in the 1970s, explaining that a failure to make sufficient productive investments afterwards led to weakened manufacturing competitiveness. "A windfall for one era cannot be counted on to guarantee the next era's competitiveness, and such wealth will quickly dissipate. The massive profits our semiconductor industry is earning today should not be consumed as temporary gains, but reinvested to prepare for the AI era."

Regarding the labor market, Kim called for a shift from "working hours–centered" thinking to "productivity and adaptability–centered" approaches. "In the AI era, the competitiveness of labor will be determined not by how long you work, but by how well you can work with AI, how quickly you can learn and adapt," he said. "What we need to protect is not the methods of working from the past, but the jobs of the future."

On labor-management relations, he stressed the need to move away from established adversarial frameworks. "In the AI era, speed is competitiveness, and that speed comes from trust. Labor-management culture should not be a competition over 'who takes a larger share,' but rather a discussion on 'how to grow together on a larger scale.' " He proposed the "flexicurity" model—guaranteeing flexibility for companies to innovate and stability for workers' lives—as a new social consensus.

The forum also saw consensus among experts on the need to reform how corporate profits are used and to revise labor systems. Andonghyun, Professor of Economics at Seoul National University, who delivered the keynote presentation, pointed out, "Allocating corporate profits based on excess returns could undermine innovation capacity and fuel social turmoil."

He explained, "The semiconductor industry requires large-scale capital investments and R&D, with considerable risk of failure. Corporate profits should therefore be used primarily as reinvestment resources for future growth."

Kim Dongwook, professor at the Korea University Law School, said, "Labor law systems formulated during the industrial era cannot keep up with the rapid pace of competition for supremacy in AI and semiconductors. Labor laws need to evolve into a 'flexicurity' model that not only supports flexible workforce management but also strengthens retraining and social safety nets."

During the panel discussion, panelists reiterated the importance of maintaining the investment capacity of companies. Jeon Yun-jong, President of the Korea Institute for Advancement of Technology, noted, "Corporate profits are the result of taking risks and aggressively investing in global innovation. Methods such as special purpose taxes can create increased uncertainty for management environments and could shrink corporate activities." He emphasized, "To secure national competitiveness in the AI era, it is vital to create an environment where profits earned by corporations can once again be funneled into future industrial investments."

This content was produced with the assistance of AI translation services.