[Asia Economy Reporter Donghyun Choi] Three years after the introduction of the Regulatory Free Zone, it has been revealed that 2.4 trillion KRW in investment funds have been attracted and approximately 2,400 jobs have been created.
The Ministry of SMEs and Startups announced on the 10th that this was the result of reviewing the achievements over the three years since the introduction of the Regulatory Free Zone (hereinafter referred to as the Zone). The Zone is an area designated in non-metropolitan regions where various regulations are exempted to freely demonstrate new technologies. It was introduced on April 17, 2019, to foster new industries and technologies through regulatory innovation and to promote balanced regional development. Businesses within the Zone can apply 201 menu-based regulatory exemptions and the three regulatory sandbox sets?▲ rapid regulatory confirmation ▲ temporary permits ▲ demonstration exemptions?to pilot new technologies.
Since the system's introduction, 29 Zones (71 detailed projects) have been designated and operated across 14 cities and provinces. By region, three Zones have been designated each in Gangwon, Gyeongbuk, Busan, and Ulsan, with at least one Zone designated in every non-metropolitan city and province.
The designated industrial sectors are ranked as low-carbon and eco-friendly energy (6 Zones), biohealth (6 Zones), and hydrogen (5 Zones). A total of 451 companies are participating in the 29 Zones, receiving a total of 149 regulatory exemptions (an average of 5.1 per Zone).
Total investment attraction reached 2.4 trillion KRW, of which 1.9962 trillion KRW was attracted within the Zones. Notably, 1.7 trillion KRW was invested in the Gyeongbuk Next-Generation Battery Recycling Zone, and 126.4 billion KRW in the Jeonnam e-Mobility Zone, with most investments occurring around the first designated Zones in 2019.
Additionally, 237 companies relocated within the Zones, and as of the end of last year, 2,409 jobs were created. Among these jobs, 86% (2,072) are regular positions, indicating good job quality. An additional 659 hires are planned by the end of this year, suggesting continuous job creation.
Among the 237 relocated companies, 173 are Zone businesses, and 64 are related companies such as partner firms, indicating that a new industry ecosystem is being established centered around the Zones.
The Zone that attracted the most companies is the Gangwon Digital Healthcare Zone, which attracted a total of 32 companies, including 4 Zone businesses and 28 companies involved in digital healthcare device manufacturing, data, and services. The Sejong Autonomous Driving Zone also attracted 22 companies, including 6 Zone businesses and 16 companies in the autonomous driving sector. The establishment of academic departments related to new industry fields in local universities is strengthening the talent development foundation, which is expected to help Zone companies secure professional personnel.
Furthermore, among 51 regulations in the first and second Zones where the demonstration period of two years has passed, 26 have completed safety verification through demonstration, and legal amendments are being pursued to allow business operations nationwide. Once these legal amendments are completed, it is expected that more innovative companies will enter new industries.
Minister Kwon Chil-seung of the Ministry of SMEs and Startups stated, “The Regulatory Free Zone has established itself as a representative system that creates regional innovation ecosystems and contributes to balanced development in a short period. Moving forward, we will expand support for commercialization after demonstration, improve the system so that new companies can easily utilize it, and reflect field voices to supplement the system so that Zone companies can grow into global enterprises.”
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