KISDI Finds AI Expansion Reshaping the Labor Market, Raising Concerns over Reduced Division of Labor and Task Polarization (detail)

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KISDI Perspectives (April 2026, No. 1)
Improved AI Adoption by Clients and the Dissolution of the Technology Premium: An Empirical Analysis of Task Restructuring in the Freelance Labor Market

KISDI Finds AI Expansion Reshaping the Labor Market, Raising Concerns over Reduced Division of Labor and Task Polarization
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▲ Growing in-house adoption of AI by clients reduces outsourcing demand for AI design services
▲ Qualitative shift in outsourcing demand: High-value planning moves in-house, while freelancers concentrate on low-value post-editing tasks
▲ Risk of weakening the skill development pathway for junior workers highlights the need to reform vocational training toward planning and problem-solving capabilities

The Korea Information Society Development Institute (KISDI, President Sangkyu Rhee) recently published *KISDI Perspectives* (April 2026, No. 1), titled *Improved AI Adoption by Clients and the Dissolution of the Technology Premium: An Empirical Analysis of Task Restructuring in the Freelance Labor Market*.

Previous studies have largely focused on the supply-side perspective, suggesting that freelancers who adopted generative AI early would gain a technology premium and secure a competitive advantage in the market. However, as generative AI has become widely accessible and capable of producing high-quality outputs without specialized skills or equipment, businesses and individuals that previously relied on outsourcing are increasingly performing tasks in-house using AI. This growing internalization of demand has emerged as a new factor reshaping the labor market.

The report empirically examines how increased AI adoption by clients affects freelancers who use AI and explores the broader implications for future labor market transformation.

Using transaction data from the freelance platform Kmong, the study found that outsourcing transactions for freelancers in AI-related design occupations declined by approximately 21.73 percent. Total monthly transactions within the AI design category also fell by around 20 percent. The findings suggest that the decline was driven not by intensified competition resulting from an increase in the number of freelancers, but by an overall contraction in market demand, indicating that the outsourcing market itself is entering a period of structural decline.

To examine how this demand contraction has unfolded, the study further analyzed the photo retouching sector. The results revealed a clear divergence depending on client type. Freelancers whose primary clients were individual consumers experienced a significant decline in outsourcing transactions, whereas those serving mainly corporate clients recorded an increase in retouching-related work.

The report explains that these contrasting trends reflect different patterns of AI adoption among client groups. Individual consumers increasingly rely on AI-generated outputs that satisfy their needs, reducing demand for both design and editing services. Corporate clients, by contrast, have begun internalizing the creative planning stage through AI while continuing to outsource professional retouching to refine AI-generated content for commercial use, resulting in sustained demand for specialized post-production services.

According to the report, this shift in corporate demand has broader implications for the future structure of the labor market. Firms that previously outsourced design work because they lacked in-house expertise are increasingly enabling planners, marketers, and other non-design professionals to perform design-related tasks using AI, gradually internalizing functions that were once outsourced.

If this trend continues, the traditional division of labor in which planning, production, and quality control are carried out by separate specialists may become increasingly compressed into a single AI-enabled planner. As a result, the labor market may become polarized between a small group of highly skilled professionals capable of managing the entire production process through AI and a larger group of workers performing routine post-processing tasks. The report also warns that opportunities for junior workers to acquire practical experience and progress toward higher-skilled positions may diminish, weakening the traditional pathway for skill development.

Juhwan Kim, Researcher at KISDI, noted that the growing internalization of generative AI by clients represents more than a reduction in outsourcing costs; it signals a fundamental restructuring of the labor market. He emphasized that national vocational training should move beyond teaching basic AI software skills and instead focus on developing advanced planning capabilities that enable workers to critically evaluate and strategically direct AI-generated outputs. He also stressed the need to establish a new human resource development governance framework through collaboration among government, industry, and academia.

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KISDI Finds AI Expansion Reshaping the Labor Market, Raising Concerns over Reduced Division of Labor and Task Polarization