Businesses selling or using robots in Asia may not see a connection between North Korea and robotics. But there is one, and it could have a huge impact on the future of Asian robotics.
Following a historic meeting between Donald J. Trump and Kim Jong Un in Singapore on June 12, relations between North Korea and its neighbors are moving in a positive direction. If sanctions are lifted, North Korea could be “open for business.”
Three countries — and their robotics companies — stand to benefit from better relations with North Korea: China, Japan, and South Korea. Western firms should also update their Asian robotics strategies.
The potential importance of North Korea to international trade is easy to underestimate. For instance, did you know that Turkey is using that country’s technology to scan license plates or that Nigeria is using its systems for fingerprint verification? North Korea has also sold facial recognition technology to certain governments.
China ready to benefit
China already accounts for 90% of trade with North Korea. In 2016, Chinese state media reported that Xiaomi was seeing growing demand in North Korea for its fitness band, Mi Band 2.
While the rest of the world was complying with sanctions for its nuclear weapons program, ZTE was quietly selling telecommunications equipment to Pyongyang.
The following seven companies would benefit from more open trade:
Why these firms? First, these are the largest technology firms in China. Second, of all Chinese technology companies, these have the biggest footprint outside of China.
Third, each of these corporations has robotics and artificial intelligence initiatives under way. Here are some examples of what they might accomplish in the Korean Peninsula.
Smart cities: North Korean cities such as Pyongyang, Hamhung, Chongjin and Nampo could rapidly develop with Chinese help, leapfrogging dated infrastructure. Alibaba and Huawei could lead here.
In January, Alibaba signed a deal to make Kuala Lumpur, Malaysia, a smart city through AI traffic monitoring.
Similarly, in November, 2017, Huawei unveiled a smart city “nervous system” for 100 cities using AI.
E-commerce: As new consumer goods enter the country, demand for better e-commerce could grow. In 2015, North Korea launched it first e-commerce platform.
AI chips: Currently, most smartphones in North Korea are made by local firms. But the parts are supplied by China.
Another way Chinese robotics firms could support robotics in North Korea is by supplying facial recognition technology. China has already exported this technology to Malaysia and Zimbabwe. North Korea may want this technology to keep tabs on its citizens.
Because China has supported North Korea in the past, the country’s industry may support China as it opens up. This may give Chinese tech companies and Chinese robotics the “first mover advantage.”
Getting to know the neighbors: South Korea
South Korean and Japanese firms may have a hard time selling robotics in North Korea. This is due to two factors: China’s expected monopoly and North Korea’s fears over their technology acting as a “backdoor” for the U.S. to spy.
With that said, peace on the Korean Peninsula will rely, in part, on economic links between the two Koreas. This is something that is already being explored
When Kim Jong In met Moon Jae-in in May, South Korea’s president handed Kim a USB stick. On it were “blueprints” of how North Korea could rapidly industrialize and connect with South Korea and other parts of the world.
Two industries in particular could help South Korean robotics — automotive and consumer appliances. Firms in both of these industries are already eager to expand into the north.
Last month, it was reported that South Korean car companies like Hyundai, Kia, and SsangYong were “itching” to enter North Korea. In May, the massive Hyundai Group, which includes the Hyundai car brand, launched a “task force” to develop economic projects in North Korea.
There is also speculation that Samsung could use North Korea as a manufacturing hub, similar to its expansion in Vietnam.
AI enters through appliances
But how do cars and appliances translate into robotics? Increasingly, South Korean cars and appliances are coming with AI built into them:
By 2030, Kia plans to have a fully-functioning self-driving car. Samsung has also begun testing self-driving cars on South Korean streets.
Appliances: By 2020, Samsung plans to equip every product it manufactures with some AI. And through Bixby, its AI assistant, Samsung is allowing its home appliances to connect and communicate in new ways.
If Samsung can enter North Korea, LG will be there too. Future LG smartphones could house a button dedicated to AI functionality. At the same time, LG has announced a new line of AI-appliances called “ThinQ.” LG is also allowing some its appliances to work with Amazon’s Alexa.
Japan gets ready to ship
Compared with China and South Korea, Japan’s robotics sector has less to gain from North Korea. This is not because of lack of talent or products. Instead, it’s because Japan isn’t as “connected” to North Korea as China and South Korea.
At the same time, Japanese robotics firms will have to outmaneuver competitors from China and South Korea.
However, there is one area where Japan may succeed: shipping, which is also transforming with AI.
Following last month’s summit, stocks of Japanese shipping companies jumped — one stock by 38% — over the possibility of opening business with North Korea.
If large Japanese shipping firms are turning to AI, the rest are likely to follow. That means as Japanese shipping firms restart ties with North Korea, autonomous vessels may play a role. This is not so much Japan taking its robotics to North Korea. Rather, it is robotics helping Japan reach the country.
Equally important is the role that Japan’s International Cooperation Agency (JICA) could play. JICA is an organization that bids on infrastructure and cultural projects globally. For example, one of its big markets is India.
If sanctions lift off North Korea, JICA might start to work on deals with Pyongyang and Japanese robotics might fit into them.
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The role of Russia
While China, South Korea, and Japan are seen as the main benefactors from a stable North Korea, Russia is also a winner, although a less discussed one. In October 2017, when the U.S. was trying to isolate North Korea, Russia launched a new Internet connection with the country.
And, shortly after the June 12 summit, Russian President Vladimir Putin invited Kim Jong Un for a state visit. If other countries succeed in taking their robotics to North Korea, Russia might do the same.
Two companies could benefit:
- Promobot: A robot similar to SoftBank’s Pepper. Russia exported 100 Promobots to China in 2016.
- Yandex: Russia’s largest search engine, which is currently working on robotics projects. It is working on on smart speakers and self-driving cars.
The U.S. and Western Europe might benefit
Robotics firms in the U.S. and Western Europe may want to bid or try to sell into North Korea, but geopolitical realities could put a choke on their ambitions.
If Pyongyang is wary of buying from South Korea and Japan over their ties with the U.S., it is doubtful that North Korea would purchase robotics products directly from the West.
But, there may be one hope for U.S. robotics, and that is the way in which the Trump administration negotiates the “finer details” of peace. The White House has already fired shots to take on China in AI.
If it is serious about this, the White House could broker a peace deal in a way that benefits U.S. companies, including robotics businesses.
North Korea offers possibilities for Asian robotics
For decades, the thought of a stable, peaceful, and prosperous North Korea seemed unimaginable. Now, after multiple setbacks and obstacles, peace appears to be on the horizon.
Robotics businesses should pay close attention. If Asia is the future of robotics, then untapped markets like North Korea are the future of Asian robotics.
As Chinese, South Korean, and Japanese robotics businesses prepare their North Korean strategies, non-Asian firms have a lot at stake.
If Asian robotics businesses can enter a market that their Western counterparts can’t, it would put automation suppliers in the U.S. and Europe at a huge competitive disadvantage.
The next time you hear about North Korea on the news, don’t change the channel or listen passively. North Korea has a huge impact for robotics, so what’s your Asian robotics strategy?