Korea has been building Smart Cities since the early 2000s, even before the concept of Smart Cities became a subject of international interest. The Smart Cities’ historical transitions in S. Korea are divided into three Generations. In the First Generation, the Smart City program began in 2008 with the first “Ubiquitous City” (U-City) Construction connected with the Housing Site Development Promotion Act. Since then, the Korean government has revised a Smart City master plan every 5 years.

The First Generation: Construction Level

The first generation of Korea’s Smart City initiatives was called the “construction level” involving the building of smart infrastructure and operating smart services. The beginning of this stage was thanks to the growth of GIS information in diverse sectors, which improved the management of diverse urban facilities. The Korean government was orchestrating the construction of second-generation new cities through new innovative methods, so ICT was incorporated into urban planning.

The U-City programs were partially led by three ministries before the first act on U-City construction. The enactment started in 2008 under the “Act on Ubiquitous City Construction”. The Korea Land and Housing Corporation (LH), a government-owned entity, was tasked to build the physical and ICT infrastructure for the Smart City, and planned to hand it over to the local government. However, after finishing the project, LH considered handing over the services, but the local government kept delaying the acquisition. To avoid passing the operation cost to citizens, LH ended up subsidizing some of the expenses.

Smart Cities second generation: Connecting level

The Second Generation is called the “Connecting level” where Korea focused on changing policies regarding information and system integration. CCTV was originally installed solely for traffic management purposes, but later used in multiple ways, such as crime prevention and identifying tax evaders. This was an important breakthrough as there were many legal barriers to using the information. For example, in the case of CCTV, no one could use the videos except the police in very specific cases. This was the case with many other situations, so it took the lifting of many legal barriers to allow the integration that the Smart City needed.

Moreover, initially, the Smart City initiatives were only for newly built cities, but now have expanded to include transforming existing cities. The name of “Comprehensive U-City Management Center” was changed to “Smart City Centers”, as well as the name of the “Act on Ubiquitous City Construction” to the “Smart City Construction and Industrial Vitalization Act”. One of the main challenges in implementing Smart City Initiatives is the liaison and cooperation between ministries for service and operation, which have continued to be insufficient until now. 

However, in 2016, South Korea established cooperation with KOICA and KOTRA (public agencies) to export Seoul’s E-Government Policy and invited IT companies to cooperate in making Digital Capital Seoul. In cities like Busan and Sejong, a benefit called the “Legislative Sandbox” was implemented to allow a business operator to request a special case for new technology. The relevant ministries temporarily approve the case after reviewing the conditions and reorganizing the regulations during a trial period. This “Legislative Sandbox” will be implemented in Busan Eco-Delta City (EDC) as well. However, this legal benefit still seems to be not enough to encourage Private Participation in Smart City Projects.

Smart Cities third generation: Enhancement level

The Third Generation of Smart City development has been named the “Enhancement level”, which aims to integrate urban Services in everyday life and create a Smart City Ecology. Recently, the “Smart City Master Planner Act (2018)” established the Master Plan as the Control Tower of the Smart City Program. However, the government decided to reduce the Master Planner’s authority.

Master Planners were appointed to manage two National Pilot Smart Cities in Busan (Eco Delta Smart City EDC) and Sejong(5-1 Life Zone). Nevertheless, the implementation of the “Software Industry Promotion Act” limited the participation of large companies in the public software market, restricting their implication in all Smart City projects. Despite this setback, the implementation of Living Labs was carried out in the national pilot Smart City program, enabling the private sector to participate in the planning and operation phases.

Looking forward to 2021, “the National Pilot Smart City Program” in South Korea plans to establish a “Special Purpose Company(SPC)” jointly funded by the public and private sectors. This program enable the participation of the private sector from the planning phase to the operation phase. Here lies the main difference between “U-City” and “Smart cities”. Although both share characteristics, the “U-City” was an idea of “Urban Regeneration” led by the government, while Smart Cities are projects implemented and managed by multiple actors.

City governance in South Korea Smart Cities

Smart Cities are implemented to actively use technology to enhance the interaction between citizens and public agencies. They provide favorable environments for collaboration in decision-making and problem-solving by using ICT, the internet, and open data policy. These actions encourage citizens to engage in urban planning and public decision-making, and actors are mainly divided into two categories: governmental and non-governmental actors.

In South Korea, the Ministry of Land, Infrastructure and Transport (MoLIT) initiated Smart City Projects and invited cities to join an open competition for financial support. The Ministry of Interior and Safety took charge of Smart Administration Projects; while the Ministry of Trade, Industry, and Energy supervised Smart Energy and Environment Policy. Public agencies are also involved in Smart City Development, such as LH and local public corporations. On the other hand, private actors are participating in governance mainly as executors by contract. These actors develop technology or applications and bring them to “the Seoul Metropolitan Government”. The final decision on how to use such technologies depends on the “Seoul Metropolitan Government”.

Once “the Seoul Metropolitan Government initiates” promotes research projects to universities or research institutes to back up the policies or projects. However, direct citizen engagement has been hard to find. There are no citizen initiatives directly participating in the decision-making process, and there is no way to express citizens’ concerns directly. Although the Seoul Metropolitan Government still holds vast authority, it promotes citizen engagement by launching “a Smart City Community Network” and sharing Smart City Information.

Smart city issues and challenges in South Korea

The First and Second Generations were characterized by a Central Government-Dominated approach and closed data access. The Central Government’s Smart City Programs had many overlapping responsibilities among different ministries, leading to confusion and a lack of integration of new services. Moreover, local governments were also conservative in introducing new technologies due to concerns about budget waste and minimizing trial and error. 

The First Korean Smart City Construction Act, the U-City Construction Act, fell short of expectations due to a lack of a clear definition of Smart Cities, standard guidelines, legal interpretation, and an entity to manage services. Moreover, the Legal Foundation of the Business Model was insufficient, and the basis for financing services was not established, making it difficult to encourage private sector involvement. As a result, only 50 services out of 250 funded by the government in the First-Generation Smart City Program were operational until the end of the First Generation in each local government. There was also a lack of consideration for System Maintenance Financing. 

The Second-Generation (2014-2018) Smart City Program faced similar challenges. The government’s focus was on constructing infrastructure, and there was still a lack of services and operation strategies. Additionally, changes in government leadership resulted in policy and budget reductions, weakening the driving force behind the Smart City Initiative. Until this stage, there were no citizens initiatives directly participating in the Decision-Making Process. In this Generation, the differences between technologies and services made it difficult for citizens and policy makers to consistently support Smart Cities. In addition, some construction projects, such as the “Digital Twins”, were impossible to realize in the short term, and the sustainability of the companies could not be guaranteed under the government’s stringent requirements from the early stages.

In the Third Generation (2019 ~  ), while interconnected services provide high efficiency at low cost, governance and legislative problems tend to increase with each interconnection. Still, the government faces difficulties in engaging the private sector as a driver of Smart City due to public sector regulation, and “legislation sandbox” seems not to be enough to drive it. Moreover, after COVID-19, citizens are concerned about the impact of privacy violation and accuracy in the data provided. For example, to prevent a “Mask Crisis” in the initial stage of COVID-19, an application was developed to inform the citizens about the stock status of masks based on the location of pharmacies and drugstores. However, the mask stock data did not match the actual inventory volume, which caused inconvenience and anxiety among the citizens. 

The journey of Smart Cities in South Korea started as a proposal and an experiment that led to one of the biggest business model in the country. Compared to other countries, South Korea show us an institutional vision of smart cities development and its challenges. Just like Korea, other cities face challenges in interacting among different institutions and stakeholders for managing smart cities, so it should be an interesting topic to conduct a deep analysis ¿What do you think?