Invest KOREA

Korea began to develop smart cities at the national level in the early 2000s, which makes it one of the forerunners in the area. Since its inauguration, the current Moon Jae-in administration has launched various policy experiments to develop smart cities as spaces for innovation in the era of the Fourth Industrial Revolution.

Smart city projects in Korea have been developed in four major stages. Stage 1 involves various infrastructure projects that preceded the introduction of the concept of smart city. In Stage 2, Korea began to apply the concept to its urban spaces. In Stage 3, on the basis of the infrastructure developed in Stage 2, Korea began to provide interconnected services across different areas through integrative platforms. Lastly, Stage 4, which Korea is going through today, has seen unprecedented policy experiments to develop smart cities as solutions for urban problems and means of creating new innovative industries.

Stage 1: Related Projects before Smart City Development

Smart city development in Korea is based on the foundation created by various projects that preceded it. The liquefied natural gas (LNG) explosion at a subway construction site in Ahyeon-dong, Seoul, in 1994 and the gas explosion at a subway construction site in Daegu in 1995 increased the need for a national-level foundation for geographical information. After these incidents, the government developed a national geographic information system, followed by projects to build urban information systems to manage and use the information in the system. The introduction of ubiquitous computing in the early 2000s resulted in the spread of concepts that allowed for achieving efficient management of urban facilities by integrating physical facilities with urban information systems. Under these circumstances, the Korean government decided to build a national foundation for a ubiquitous Korea.

Stage 2: Development of Smart City Infrastructure

As mentioned above, in the early 2000s, Korea began to use the concept of ubiquitous computing in its policies. These policies were supported by many favorable conditions that presented themselves around that time. First, Korea had just completed its project for developing a nationwide ultra-speed information network, which offered the world’s fastest access to the Internet. Second, Korea had begun to plan “innovative cities” across the country, along with the “Second-Phase New Towns” in Dongtan in Hwaseong, Pangyo in Seongnam, Unjeong in Paju, and Gwanggyo in Suwon to distribute the population that is concentrated in the Seoul Capital Area (SCA) and pursue the balanced development of the nation. The nationwide spread of the high-speed information network and the development of the New Towns, which provided good opportunities to build new forms of cities, served as a foothold for the development of U-Cities, which constituted an early model for the Korean version of smart cities.

In 2008, Korea enacted the Act on the Construction, Etc. of Ubiquitous Cities (U-City Act) to build an institutional foundation for the planning, construction and operation of U-Cities. This Act spurred the development of U-Cities in the country. In particular, the U-City Act made it possible to use the profits from the development of the New Towns to build the U-City infrastructures defined by the Act, including integrated operation centers, local communication networks and transportation/security service facilities. Under this Act, the central government and the local governments were able to expand smart city infrastructures in the Second-Phase New Towns and other innovative cities in each area without committing their budgets. Between 2003 and 2014, Korea saw urban designing and infrastructure development based on smart city concepts in 52 development zones. Although specific numbers vary, around KRW 20 billion was invested in developing smart city infrastructures in each zone.

Stage 3: Interconnection of Smart City Information and Systems

Tying up smart city infrastructure development with New Town projects contributed to spreading smart cities in Korea and prompted local governments to realize the need for smart cities. However, when Korea’s population growth visibly slowed down around 2014, the government no longer felt the need for large-scale New Town projects. These changes warranted a change in the smart city infrastructure development model for the New Towns. As it was no longer possible to secure large amounts of financial resources, the Korean government adopted policies to interconnect and integrate existing smart city facilities to provide interconnected services. In particular, under the U-City Act, Korea developed the same types of infrastructures and services for all New Towns. As a result, rather than developing different services to accommodate the different needs of the respective cities, the Act focused on providing common transportation and security services for the cities. In other words, while the projects achieved the nationwide spread of transportation and security services, they lacked diversity of services offered in the cities.

Thus, the central government implemented a project aimed at distributing integrated platforms for the cities to secure a foundation for diverse services tailored to the needs of different cities and overcome the limitations of focusing on physical infrastructure development. This project made it possible to interconnect the systems and infrastructures across different areas, such as safety and transportation, and offer new types of services at lower costs. However, Korea had to overcome two nontechnical obstacles to bring the project to success. First, different services were managed by different entities. Second, the related regulations prohibited the use of facilities for unsanctioned purposes and made it impossible for entities to share information out of privacy concerns. For this reason, the Korean government worked toward building a system of cooperation among different entities and reforming its regulations while pursuing technical efforts to build integrated urban platforms. These efforts created the foundation for interconnected services across different areas.

This period taught Korea a critical lesson that the interconnected and integrative management and operation of smart city infrastructures require governance and regulatory reforms, as well as technical developments.

Stage 4: Interconnection of Smart City Information and Systems

Faced with the smart city hype that swept through Korea and the world into the 2010s, the Korean government reviewed its smart city policies in their entirety. In particular, the emergence of the Fourth Industrial Revolution became a major policy issue that pushed the government to realign the goals of its smart city policies. In 2017, the Korean government wholly revised the U-City Act into the Act on the Development of Smart Cities and the Promotion of the Smart City Industry, thereby creating a foundation for implementing policies that cover wider areas that encompass the promotion of the smart city industry, as well as the construction, management and operation of smart cities.

After the revision, the administration launched government-wide efforts to develop mid- to long-term strategies for Korea’s smart cities. One of the key elements of these strategies is developing test beds for new technologies in urban spaces to improve the competitiveness of the new industries in the global market and provide smart city solutions tailored to urban issues in dilapidated areas. One of the features that separate the new policies from the existing ones is that they define goals tailored to the characteristics of different urban spaces, and pursue different strategies for different goals. In particular, the Korean government decided to commit its financial, institutional and technical capabilities for building test beds for advanced cities with global-level competitiveness in the form of National Pilot Cities. For these cities, which will be designated among undeveloped areas with favorable conditions for building advanced infrastructures, the government plans to adopt regulatory sandbox policies and special provisions that allow for the collection and use of data that are not readily available in other areas so that they can serve as grounds for regulation-free experiments with the new technologies of the Fourth Industrial Revolution era. The government has launched the development works for the Sejong 5-1 District and the Eco Delta City Area in Busan. The National Pilot Cities are expected to be at the forefront of Korea’s smart city innovation. As for addressing various urban problems, which constitutes another key objective of the country’s smart city policies, the central government is working toward providing assistance by offering tailored solutions for dilapidated areas suffering from urban problems. To this end, Korean policymakers are discussing new smart city strategies, such as “Living Lab” projects, which will depart from government-led efforts of the past through people engagement, early identification of urban problems and continued monitoring of the results achieved with the solutions. The Stage 4 projects are still in their infancy, which makes predicting their outcomes difficult. However, it is widely agreed that they represent a step forward from the existing government-led smart city policies in terms of defining and implementing the goals and strategies suitable for different spatial characteristics in different cities.

Conclusion

To this day, smart city development in Korea is progressing on a national level at a pace that is faster than many other countries. Based on these experiences, Korea currently pursues smart city policies that not only develop technical elements and infrastructures for smart cities but also pursue collaborative governance and regulatory reforms, promote innovation for creating new industries and differentiate policy instruments for different cities.

In addition, the Korean government pursues its smart city policies with a clear conviction that the success of these projects is hinged on the participation of residents and the development of smart cities that will provide meaningful benefits to the people.

By Lee Jae-yong
Managing Director
Smart and Green City Research Center
Korea Research Institute for Human Settlements
leejy@krihs.re.kr