ITIF-从快速追随者到创新领导者_重构韩国技术监管（英）-2025.3_10页_596kb

South Korea's Regulatory Environment and Its Impact on Innovation

South Korea's regulatory framework combines a positive regulation system (explicitly permit activities) with shadow regulation (informal discouragement). This dual approach creates significant barriers for innovative businesses, particularly in digital sectors, due to uncertainty and slow regulatory updates. Historically effective for industrial catch-up, it now hinders the shift to global innovation leadership.

Key Challenges

• Innovation Stifling: Digital sectors like AI and cryptocurrency face restrictions; for example, cryptocurrency is limited to basic services, and AI regulatory frameworks may become outdated quickly.
• Economic Consequences: High fear of failure deters entrepreneurship, with South Korea lagging in tech startups despite strong R&D spending. This risks long-term stagnation, as seen in declining productivity and competitiveness.
• Case Studies: The TADA ride-sharing case illustrates how legal victories can be reversed by political pressure, while cryptocurrency firms migrate to friendlier jurisdictions like Singapore.

Recommendations for Reform

• Dismantle the positive regulation system and formalize shadow regulations to reduce uncertainty.
• Adopt minimal, evidence-based regulation for emerging technologies, starting with a "negative list" approach.
• Establish an independent "control tower" with policymaking authority to coordinate regulations across government departments.
• Foster cultural acceptance of disruptive innovation to support economic growth.

Addressing these reforms is crucial for South Korea to maintain competitiveness and avoid decline.