Hongneung Small Giant R&D Special Zone Development Project Gains Momentum

Gang Dong-gil, Vice Chairman of the Planning and Economy Committee of the Seoul Metropolitan Council, Expects Regional Economic Development with Establishment of Seoul City Financial Support Basis... BT-IT Convergence Center to Open in September, Providing Corporate Office Space and Resident Amenities (Healthcare Station, Cafe Lounge), and Janitor Room Creation

[Asia Economy Reporter Jong-il Park] The basis for budget support from the Seoul Metropolitan Government to the Research and Development Special Zone Promotion Foundation, established as a quasi-governmental institution to efficiently promote the development of research and development special zones, has been established, marking the full-scale revitalization of the economy in the Hongneung area.

Kang Dong-gil, Vice Chairman of the Planning and Economy Committee of the Seoul Metropolitan Council (Democratic Party, Seongbuk 3), who was the main proposer of the 'Ordinance Amendment on the Promotion of Strategic Industries and Support for Enterprises in Seoul Metropolitan City' to support the 'Hongneung Small Giant Research and Development Special Zone,' had the ordinance passed as originally proposed at the Seoul Metropolitan Council plenary session on the 2nd.

The ordinance proposed by Vice Chairman Kang includes provisions for contributions and subsidies to the Research and Development Special Zone Promotion Foundation (hereinafter referred to as the Foundation) following the designation and announcement of the 'Hongneung Small Giant Research and Development Special Zone' on August 28, 2020, by the Ministry of Science and ICT (hereinafter referred to as the Ministry of Science and ICT) to establish the Seongbuk-gu and Dongdaemun-gu areas, where the bio industry including pharmaceuticals and medical devices is concentrated, as a global medical cluster.

Currently, the Small Giant Research and Development Special Zone project is structured with the Foundation as the project entity, receiving contributions from the government and local governments where the special zone is located. According to an agreement with the Ministry of Science and ICT, Seoul must bear more than 20% of the local expenses compared to national funds, but there was no separate basis for contribution support, causing many difficulties in the budget allocation process.

To resolve these difficulties, Vice Chairman Kang proposed the ordinance, resulting in the inclusion of a 1.2 billion KRW budget for the 'Hongneung Small Giant Research and Development Special Zone Development Project' in the first supplementary budget of Seoul City for 2021.

This year, the total budget for the Hongneung Small Giant Special Zone development project is 7.2 billion KRW, including the additional 1.2 billion KRW secured.

Looking at the changes in research and development special zones so far, since the first designation of the Daejeon Daedeok Special Zone in 2005, as of 2019, the number of companies increased from 687 to 6,782, sales revenue rose from 2.5 trillion KRW to 54.6 trillion KRW, and the number of KOSDAQ-listed companies grew from 11 to 99.

In particular, the average sales revenue of companies within the research and development special zones is 1.5 times higher, and the average number of employees is 1.7 times higher than those of small and medium-sized enterprises nationwide, showing significant growth in sales and employment compared to general SMEs, which is expected to have a great effect on regional economic revitalization and job creation.

Additionally, according to Vice Chairman Kang, Seoul will open the BT-IT Convergence Center (12 Opaesan-ro 3-gil, Seongbuk-gu) in September to support startup companies in the bio digital healthcare sector.

The Convergence Center, a core space of the Hongneung Small Giant Research and Development Special Zone, is being constructed with a total project cost of 12.9 billion KRW, spanning from basement level 1 to the 5th floor above ground, with a total floor area of 2,884 square meters, and is scheduled for completion on July 23.

To gather bio medical industry startup companies and research facilities in the Hongneung area, the Convergence Center will contribute to the activation of the bio industry through comprehensive support, including providing 27 office spaces, research equipment and R&D support, business consulting, investment attraction, and market development.

Furthermore, on the first floor of the Convergence Center, at Vice Chairman Kang’s request, a Healthcare Station (tentative name) and a caf? lounge (community facility for residents) will be established for local residents to freely visit and experience, and the basement level 1 will be composed of a rest area and shower facilities for Seongbuk-gu sanitation workers.

Vice Chairman Kang Dong-gil stated, “The passage of this ordinance and the opening of the BT-IT Center have created an opportunity to overcome the difficulties of the economically disadvantaged Seongbuk-gu,” and added, “To ensure the safety and continuity of the special zone project and to revitalize the local economy, continuous support and interest from both the government and Seoul Metropolitan Government are necessary.”