Invest KOREA

Countries around the world are growing more burdened by healthcare finance, as developed countries face a rapid aging of their population and expensive drugs are widely prescribed. The shortage of medical personnel, which the COVID-19 pandemic highlighted as a major issue, has also led to the emergence of AI1)-based medical diagnostic solutions as an alternative to better manage chronic diseases and introduce early diagnosis systems. AI is used in medicine to detect and diagnose diseases more accurately, develop personalized therapies, diagnose and validate medical images, improve clinical trial efficiency, and develop drug combinations and new drugs. AI in medicine is expected to bring benefits such as precise treatment tailored to each patient, reduced diagnostic errors, reduced treatment costs, and increased engagement between doctors and patients.

While research agencies provide different projections depending on the analyzed timeframe and the market size, their analyses of the common timeframe show that the global healthcare AI market is expected to grow at a CAGR of 40% over the next five years. By areas of application, Markets and Markets study (2023) shows that patient data and list analytics accounted for the biggest share with a market size of USD 2.94 billion in 2023, followed by precision medicine (USD 2.23 billion) and medical research (USD 1.99 billion)2).

By region, North America (USD 72 billion) is expected to account for the largest share of the AI in healthcare market by 2030, followed by Asia (USD 49.4 billion) and Europe (USD 31 billion). However, Asia is expected to grow the fastest, with a CAGR of 47.9% from 2023 to 2030. Among Asian countries, South Korea's AI in healthcare market is expected to grow at a CAGR of 50.8% from USD 0.37 billion in 2023 to USD 6.67 billion in 2030, exceeding the global average (41.8%) and outpacing the Asian average (47.9%). In fact, South Korea is home to leading providers of AI technologies for medical image analysis, such as Lunit, Vuno, Deep Bio, and NTL Healthcare, which are thriving by applying for patents and expanding into overseas markets such as the US and the EU.

In April 2024, the South Korean government announced the “High-Tech Bio Initiative” to strengthen the bio value chain by “innovating technologies” and “laying the foundation” with the goal of becoming a global bio powerhouse by converging digital and bio technologies and innovating bio manufacturing.

As a follow-up to the Strategy for Creating a New Bio Health Market (announced on February 28, 2023), the government announced the 1st Master Plan for Fostering and Supporting the Medical Device Industry (2023-2027) in April 2023 to achieve the goal of becoming a top exporter of medical devices. In particular, the selection of AI in medicine as one of the three promising technologies to be fostered demonstrates that the government is committed to making the country’s AI in medicine industry more competitive around the world by supporting active technology development and market creation.

Not many foreign direct investments were made in South Korean developers of AI-supported cancer diagnosis solutions. However, several leading companies have joined the Cancer Moonshot Project led by the Biden administration or provided their medical solutions to the US, EU, Asia, the Middle East, and other parts of the world. In fact, many have partnered with leading global medical device makers and diagnostics solution providers such as GE Healthcare, Philips, Fujifilm, and Guardant Health, being recognized for their technological competitiveness in the global market.