"Digitalization and Untact" Korean New Deal Outline... Drawing a Line from Civil Engineering SOC

2nd Emergency Economic Central Countermeasures Headquarters Meeting
Detailed Implementation Plan to be Announced Next Month

[Asia Economy reporters Kim Hyun-jung (Sejong) and Jang Se-hee] The government’s economic innovation project, dubbed the ‘Korean New Deal,’ which was decided to be promoted as a stepping stone from the COVID-19 crisis, aims to discover and invest in large-scale digital-based projects to use them as opportunities for economic structure advancement and job creation. It plans to turn the crisis of rapidly shrinking face-to-face industries into an opportunity and reorganize the digitalization framework, which has progressed at different speeds across industries, under the central government. While some predict it will be difficult to completely abandon traditional civil engineering industries, the government has presented a blueprint for a ‘clearly distinct new concept.’

On the 7th, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, presiding over the 2nd Emergency Economic Central Countermeasures Headquarters meeting at the Government Complex Seoul, said, “The Korean New Deal will be promoted as an extraordinary measure to utilize the economic crisis and socio-economic structural changes caused by the infectious disease shock as an opportunity for innovation,” citing three major projects: ▲ Digital infrastructure construction ▲ Fostering non-face-to-face industries ▲ Digitalization of social overhead capital (SOC).

First, to accelerate the ‘data economy,’ the government will strengthen infrastructure for data collection, opening, integration, trading, and utilization across six major sectors with high public impact: public, finance, medical, transportation, industry, and small businesses. In addition to building 5G infrastructure, it will expedite convergence projects with cities and industrial sites and the popularization of artificial intelligence (AI).

To foster non-face-to-face (untact) industries, the government will create AI-based platforms that can expand services to fields such as education and focus on strengthening cloud and cybersecurity networks. In this process, advanced technologies such as blockchain will be utilized, and information security specialists will be trained simultaneously. Digitalization will be promoted mainly around SOC, introducing smart management systems for aging facilities such as roads and railways to enhance safety, and increasing facilities like smart logistics centers on idle urban land.

Regarding this, Deputy Prime Minister Hong emphasized, “It will be a new concept clearly distinguished from traditional stimulus measures centered on civil engineering projects.” This statement was made in awareness of market expectations that the ‘New Deal’ would ultimately attempt job creation and economic stimulus through relatively easy civil engineering projects.

However, some predict that considering the scale of domestic demand and employment that can be generated in the short term, linking this New Deal project with civil engineering SOC will be inevitable. Professor Yoon Chang-hyun of the Department of Business Administration at the University of Seoul explained, “Traditional SOC is a sector that can achieve both job creation and domestic demand stimulation. Since it employs many livelihood daily workers, the effects on unemployment improvement and consumption stimulation appear immediately, and the scale is large, making it a card that cannot be easily abandoned.”

Meanwhile, regarding the Korean New Deal, the government plans to hold the first task force (TF) meeting next week, review detailed projects by the end of this month, and announce the promotion plan together with the economic policy direction for the second half of the year in early June. As for the related budget, projects executed this year will be included in the 3rd supplementary budget bill, and other projects will be reflected in the 2021?2022 budget bills.

This content was produced with the assistance of AI translation services.