Invest KOREA

KOTRA Express talks to Ben Eum, Technology Industry Lead & Principal Director of North Asia at Element AI Korea, as he offers insight into Korea’s AI industry and shares his experience doing business here.

Upon graduating from Seoul National University with a B.Sc. in material science & engineering, Ben Eum spent about seven years working for IT companies and technology consulting firms such as LG-EDS, IBM and Accenture. He spent another nine years working in global strategy consulting firms such as Booz Allen Hamilton and Monitor Group, serving many large Korean enterprises and multinational companies in Asian countries, and equipped himself with strategic and operational expertise, particularly related to new business development, investment, M&A, etc. in industries like manufacturing, petrochemical and energy.

While working as managing director of OpenTide, an internal consulting arm of Samsung Group, he discovered that there was a new breed of companies—the so-called technology giants and startups—who run their businesses and grow rapidly in a very different manner from the traditional industries. Excited to take a chance and transition from the “advisory” business to a fast-growing IT startup, he took a position as head of corporate development at Kakao Corporation to contribute his skillsets and knowledge as well as to learn the mechanisms of operations and growth in this new type of company.

Eum realized the potential of artificial intelligence (AI) technologies while he was part of the AI business division at Kakao, and eventually joined Element AI as a principal director of the North Asian region in February 2018. Eum says, “Looking back on my career, I’ve walked the path to become a strategy and business development expert who understands the different worlds of business and technology, and can now contribute to realizing the full potential resulting from the combination of the two.” Read on to learn more about his experience doing business here.

How did you become interested in your industry?

I would say there were three key moments which got me interested in the potential of AI to impact our industries and society as a whole. The first moment dates back to the ImageNet competition in 2012. Since the 1950s when the concept of AI was born, 70 years passed with a few rises and falls of technologies, and finally in 2012, at this competition, AlexNet, which was powered by the Convolutional Neural Network (CNN), dramatically heightened the accuracy of image recognition, which had stayed below 75 percent for previous few decades, to 85 percent.

This triggered explosive interest in the adoption of deep learning technologies in real-life situations. What interested me personally is that machines finally showed the potential to outperform humans in tasks which were traditionally thought of as the human’s territory: vision. It led me to think about the uniqueness of deep learning technologies as compared to previous technologies we adopted in our businesses and society.

The second moment was, of course, the “Google DeepMind Challenge Match” that took place in Seoul in 2016. It was a five-game Go match between Lee Sedol, the 18-time world champion, and AlphaGo, a computer Go program developed by Google DeepMind. AlphaGo won all but the fourth game and the match has been compared to the historic chess match between Deep Blue and Garry Kasparov in 1997. But what amazed me was not the result of the game itself. It was Lee Sedol’s comment following the match, when he said, “I have grown through this experience. I will make something out of it with the lessons I have learned. I realize it was really a good choice, learning to play Go.” To me, this comment was refreshing to hear because I thought, finally we’re encountering technologies with the potential to not only learn from us but also to teach us and augment humankind, unlike any other technology from the past.

The third moment was when I joined the AI business division at the Kakao Corporation in January 2017. While formulating AI strategy and business development plans for the Kakao AI business and products, I was able to dive deeper into AI technologies like voice recognition, NLP, vision, time series—coming to the realization that the business implications of AI technologies could be huge, not just from just the “product AI” perspective but also from the “enterprise AI” perspective. All the traditional technologies we employed in the business context have the nature to speed up calculation, but this new breed of technologies, has the possibility to support our business in a different context: prediction.

Can you tell us about Element AI and its history?

Element AI is an artificial intelligence company based in Montreal, Quebec in Canada. Montreal is a major technology development hub with access to world-class talent and research facilities in the AI field. Element AI was founded by serial entrepreneurs Jean-Francois Gagne and Nicolas Chapados, along with Yoshua Bengio, a co-father of deep learning technology and a Turing Award (the Nobel Prize of Computing) winner in 2018 along with Geoffrey Hinton and Yann LeCunn. Our vision is to enable large enterprises around the world to tackle difficult problems by providing services and developing products that solve their AI-related needs. We bring together cutting edge researchers, industry experts and leaders looking to assist in implementing an “AI-First” strategy and introduce the possibility for any organization to develop their own AI strategy.

Since its foundation in October 2016, Element AI has grown very quickly and we now have five offices around the world: two in Canada (Montreal-HQ, Toronto), one in the UK (London), and two in APAC (Singapore, Seoul). Starting with five co-founders, we’ve reached up to approximately 500 full time employees around the world within three years after establishment, and more than 100 among them are world-class, seasoned researchers and engineers in machine learning and deep learning technologies. The company has raised a total of CAD 340 million (USD 257 million) since its inception, including its large CAD 102 million series A round in 2017.

What made Element AI establish a branch in Korea?

I believe Korea has many attractive characteristics as a country with its vibrant culture, innovative spirit, and strong foundation as one of the most advanced manufacturing hubs in the world.

There were several factors driving Element AI’s decision to establish a branch in Korea. First of all, large Korean conglomerate Hanwha Group, invested in the series A funding round of Element AI in 2017, allowing the Element AI team to meet various stakeholders and business subsidiaries in the Group. Hanwha also introduced the team to key executives in other large enterprises in Korea, giving the team an opportunity to gain a good understanding on Korea’s market potential. Now, Element AI is participating as a technical advisor in the AI Alliance Fund—a fund jointly established in November 2017 by Hanwha Asset Management, SK Telecom and Hyundai Motor Company to invest in startups working on AI and smart mobility.

Secondly, Korea has a very dynamic innovation ecosystem equipped with world-class digital infrastructure. The country has been ranked No. 1 on the Bloomberg Global Innovation Index from 2014 to 2019 (No. 2 in 2020, following Germany)—the index covers 60 countries and consists of seven evaluation categories of productivity, R&D intensity, manufacturing capacity, high-tech density, higher education efficiency, concentration of researchers, and patent status. Maturity in all categories are critical in assessing the readiness of a country to experiment and implement AI, hence being another reason why Korea was considered to be a good fit.

Third, a more subjective and qualitative factor could be the cultural aspect. I believe the Korean people are very open-minded and collaborative when it comes to cooperating with foreign companies, and Korean companies have established themselves as credible business partners globally for decades. I believe trust, credibility and an open culture played an important role in Element AI’s decision to expand to Korea.

What are the advantages of doing business in Korea?

As I mentioned above, Korea has consistently shown its strengths not only as a center of innovation but also as a leading country in advanced manufacturing with new technology adoption. There are lots of companies and conglomerates in Korea with global and regional footprints at the stage where they feel the need to experiment and adopt AI technologies including deep learning in their business processes to drive next level innovation and disruption, and to gain sustainable competitive advantages over their competitors.

But the reality is that the resources required to act on this initiative, such as seasoned machine learning and deep learning researchers as well as engineers are so scarce, and it’s nearly impossible for Korean companies to internalize this specific capability; hence creating business opportunities for global companies like Element AI to participate and collaborate with Korean companies for mutual benefits.

But the AI journey, especially in the enterprise sector, takes more than just AI researchers and engineers. In a sense, mature and advanced engineering capabilities are even more important in driving the realization of the potential of AI technologies in enterprises, and Korea is one of the few countries with top-level engineering capabilities and trained human resources.

What advice would you give companies from Canada seeking to do business in Korea?

I am a little bit cautious here because I’m not an expert myself in the relationship between Korea and Canada. But one important aspect I’d to stress is the culture. Understanding the differences in culture—not just the culture in general but also the cultural aspects of business practices are critical in building mutual trust. No long-term business relationship is possible without trust.

I don’t like to generalize, but the business practices and the culture behind such practices in Korean companies must be very different from those in Canadian companies, such as perhaps the speed and the structure of decision making, etc. It’s important for foreign investors/companies to be prepared in both the emotional and logical sense to overcome the challenges stemming from these differences.

How can Korea become a more ideal business environment for foreign companies like Element AI?

Speaking solely from my perspective, the regulatory policies and guidelines have huge impacts on the business as well as the overall business environment. One of the key factors with a huge dependence on regulation is access to data. As you know, data access—not only the access itself but also the general preparedness in terms of data for AI applications—poses an important challenge in any AI company trying to work with their clients. Especially in the case of foreign companies like Element AI, the situation is often times more difficult due to the requirements to share the data from client businesses to cloud platforms of foreign service providers outside of Korea.

Given the fact that every country is preparing its infrastructure and regulation system to properly adopt AI in every aspect of the economy, industry and society, it’s critical for Korea to establish the business, regulatory and cultural environments to experiment, develop and deploy artificial intelligence systems in a safe, scalable and sustainable manner. Thus, developing a forward-looking strategy and regulations to allow access to data and to promote the sharing of data, will provide a better environment for foreign AI companies like Element AI to actively participate and invest in the Korean market.

What Korean companies/government agencies do you work with to strengthen your business partnerships?

Since we officially established the Korean branch in December 2018, we’ve built relationships with multiple stakeholders in Korea with a clear focus on industries in the private sector such as manufacturing and financial services. Element AI believes it’s a good time to start building a close relationship with Korean government agencies and the public sector, considering the readiness of Korea in general; we also understand that the Korean government announced its “National AI Strategy” at the end of 2019.

I’m not at liberty to disclose our client information but you can find news about our strategic partnerships or relationships with Korean companies such as the AI Alliance Fund, Carrot Insurance (an insurance joint venture between Hanwha General Insurance and SK Telecom), Shinhan Financial Group, and LG Electronics. Also, we are considering participating in several AI associations in Korea from 2020, with the goal of expanding our relationships in the industry and helping Korea connect with foreign countries in its endeavor to lay the foundation for AI-based innovation.

What are some of Element AI’s future plans in terms of doing business in Korea and in Asia?

Currently, Element AI has two offices in the APAC region—Singapore and Korea. The Singapore office serves as the regional HQ in Asia, and the Seoul office covers the North Asian region including Korea, Japan, etc. Element AI’s investors and management team believe the APAC market is very important for our growth in the future, and has plans to grow our capabilities in the region, spanning from business development and sales to engineering and research.

Korea and North Asia, I believe, will be the region to showcase to the world the true potential of AI in the enterprise context, and thus, we’re going to be constantly expanding our relationships with large enterprises and government agencies to support a healthy ecosystem consisting of private sector enterprises, government agencies, research institutes and startups. In doing so, I believe Element AI will play a pivotal role as a thought leader and practitioner, positioned as an AI service and solution provider with world-class research capabilities, products and platforms.

By Grace Park
ExecutiveConsultant
InvestmentPublicRelationsTeam
KoreaTrade-InvestmentPromotionAgency(KOTRA)
gracepark@kotra.or.kr