[Empathy Issue] Even the Remaining Small Business Owners Are Leaving Gwangju-Jeonnam Joint Innovation City

Even the Busiest Street in the Innovation City Sees a Surge in Closures
Economic Downturn and Martial Law Aftermath Devastate the Local Economy
Public Institutions Like KEPCO Slash Operating Budgets
Merchants Lament: "Customers No Longer Come"

A Western-style restaurant that had been operating for several years in a densely packed commercial area, considered the busiest district in the Gwangju Jeonnam Joint Innovation City, has closed down after going out of business. Photo by Shim Jinseok

The Gwangju-Jeonnam Joint Innovation City, which was established with the goal of balanced regional development, is now filled with the lamentations of self-employed business owners. This is due to the accumulated aftereffects of an initially flawed urban design, combined with the impact of the economic downturn and the aftermath of martial law, all hitting at once and causing the pain of business closures.

At 11:50 a.m. on the 5th, on the main street of Gwangju-Jeonnam Joint Innovation City, in a well-known branded cafe district.

This area, once boasting a vibrant commercial district with shop rents reaching 3 to 4 million won, was the most bustling area in the innovation city. It features a concentration of cafes, apartments, officetels, public institutions such as Korea Electric Power Corporation, offices, academies, and medical clinics, resulting in a high proportion of foot traffic.

However, when visiting this street, not only was it difficult to find people, but some stores were closed and covered with 'For Rent' signs. These are places that were still in business just one or two years ago.

The situation became even more serious outside this main commercial area. In other shopping districts formed around Bitgaram Lake Park, there were more closed stores than open ones.

The vacancy issue has persisted since the birth of the innovation city, but now even the previously open stores are shutting down.

There are now more internal employees than actual customers visiting the shops, creating a bittersweet (funny and sad) situation.

Currently, the vacancy rate for commercial properties in Gwangju-Jeonnam Joint Innovation City is 43.4%. This figure is based on a 2023 survey conducted by Naju City, which investigated 6,967 commercial units in the innovation city (Bitgaram-dong).

No further surveys have been conducted since then, so the current situation remains unclear. Moreover, there has been no investigation into the closure rate, so even basic figures are unavailable.

According to local real estate agents, it is only known that a considerable number of self-employed business owners have closed down in recent years due to the economic downturn and the effects of martial law. Some cautiously estimate that one or two out of every ten businesses have closed.

The simultaneous occurrence of vacancies and closures is considered unprecedented even in Gwangju-Jeonnam Joint Innovation City, according to local opinion.

As of November last year, the registered population in the innovation city was 40,359, steadily increasing from 3,895 in 2014.

Because of this, there were predictions that the vacancy rate, which once reached 70%, had somewhat improved in recent years. In commercial areas with good business, even if some stores closed, new owners would quickly take over, so vacancies did not last long.

However, this structure has now completely collapsed, and the issue of closures is emerging alongside vacancies.

Experts believe that the problems of vacancies and closures are due to the combined effects of the aftereffects of flawed urban planning, the economic recession, and martial law.

Gwangju-Jeonnam Joint Innovation City is known for its so-called 'Hangari commercial district' structure. This type of district, formed in isolated locations, must minimize consumer outflow to be sustainable.

However, in the case of Gwangju-Jeonnam Joint Innovation City, public institution workers still frequently travel to their former residences in the Seoul metropolitan area or nearby major cities such as Gwangju during weekends.

On the other hand, the per capita commercial area within Gwangju-Jeonnam Joint Innovation City (according to Korea Real Estate Board) is 28.1 square meters, which is more than three times higher than other innovation cities such as Gimcheon (8.2 sqm), Daegu (9.1 sqm), and Wonju (8.9 sqm).

This oversupply is due to changes in the district unit plan in 2013, which converted mixed-use residential land into commercial land.

The proportion of neighborhood living and commercial land in the total development area of the innovation city (7,361,000 sqm) is 4.4%.

With low demand and excessive supply, this has caused an imbalance in the economic ecosystem of the innovation city.

Additionally, since the December 3 martial law, the 16 public institutions, including Korea Electric Power Corporation, have reportedly tightened their belts to the extreme.

In particular, it is said that expenses for food and beverages, which were previously used for dining and drinking, are now being strictly controlled internally.

As public institutions operate on government budgets, they have preemptively blocked any potentially problematic issues and entered a self-discipline mode. With employees eating lunch in the staff cafeteria for several months, the difficulties faced by nearby restaurants have only worsened, according to insiders.

Residents living in the innovation city are also closing their wallets for similar reasons.

This means the flow of money is blocked, and the overall economic scale is shrinking.

A restaurant owner who has been running a business in the innovation city for seven years said, "You can tell right away if you come during lunchtime?there are no customers in the restaurant," adding, "In the past, I used to give up on weekend business entirely, but in the last year or two, weekend sales were at least manageable. However, since the recent martial law incident, it has become difficult to see public institution employees. It's really serious."