The Korea Chamber of Commerce and Industry (KCCI) has unveiled its "Mega Sandbox" initiative as a comprehensive strategy to restructure regional industries and address the risk of local extinction. The plan aims to transform local areas into global-level experimental spaces in 12 key sectors, including manufacturing, mobility, finance, and culture, in order to resolve structural challenges.
On May 18, the KCCI, in collaboration with Deloitte Consulting, released a report titled "Mega Sandbox: A Recipe for Regional Innovation in a New Korea," presenting innovation models tailored to each region.
The report emphasizes that, to address Korea's complex crises such as low birth rates, sluggish growth, regional extinction, and industrial stagnation, it is necessary to go beyond simple subsidy policies. The report argues for a strategy that transforms local areas into regulatory-free zones, simultaneously fostering institutional innovation and encouraging private investment.
The "Manufacturing AI Cluster," proposed as a core model, is a strategy to increase productivity and added value by integrating artificial intelligence (AI) technology into manufacturing-focused cities such as Ulsan, Changwon, Pohang, Gwangyang, and Yeosu.
The main concept involves converting existing industrial complexes into smart factories by installing sensors on factory equipment and using AI to analyze data, predict failures, and adjust quality.
Deloitte assessed that "Korea's industrial distribution by region is well established, and the close collaboration between industry, academia, and research institutions amplifies the effectiveness of AI technology." The report states that, to realize this model, it is essential to simultaneously establish high-performance semiconductors, data centers, AI talent development systems, and testbeds for empirical verification.
In addition, various experimental models tailored to regional characteristics were also proposed. The "Advanced Mobility" model, which integrates autonomous driving, robotics, and distribution systems, is considered for pilot introduction in areas such as Daegu-Gyeongbuk, known for their automotive parts and robotics industries, and Saemangeum, which offers vast demonstration spaces.
Choi Tae Won, chairman of the Korea Chamber of Commerce and Industry, is speaking at a meeting with the heads of five major economic organizations inviting presidential candidates held at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul on May 8, 2025. Photo by National Assembly Press Photographers Group
The "Financial Haven" model allows for the free experimentation of new financial industries such as non-fungible tokens (NFTs), the metaverse (extended virtual worlds), and virtual assets. This model aims to create an international financial cluster by easing the application of foreign laws and relaxing foreign exchange regulations.
The "Korean-style Naoshima" model was introduced as a culture and tourism-centered concept that applies smart infrastructure technology to bridges connecting islands and the mainland, while allowing for design experimentation. In addition, a total of 12 models were presented in connection with regional characteristics, including "AI Pilot Cities" based on AI algorithm verification, industrial zones based on renewable energy, and regional content distribution platforms.
The report stresses that, for these models to function in practice, relevant institutions and infrastructure must be established together. A representative example is the need to ease the existing permission-based "positive regulation" and introduce a "negative regulation" system for new industries and technologies.
Other suggestions include tax support and subsidies suitable for attracting global companies, improvements to visa systems for the stable residence of foreign talent, expansion of living infrastructure such as housing, medical care, and education, as well as securing data centers and semiconductors to ensure the practical application of AI technology.
Choi Tae Won, chairman of the KCCI, previously proposed regulatory innovation, incentives, talent attraction, residential environment, and AI infrastructure as key elements for realizing the Mega Sandbox in a recently released documentary.
The KCCI stated, "This report contains not just declarative slogans but actionable regional innovation models," adding, "We plan to support local governments and companies so they can review and implement strategies suited to their regional circumstances."
The KCCI also added, "With the presidential election approaching, now is the time for local and central governments, as well as the private sector and government, to actively discuss regional innovation," and encouraged interested local governments to consult with their regional chambers of commerce.
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