Two Years of Regulatory Sandbox Implementation... Ministry of Industry Released 102 Restrictions

Revenue of 26 Billion Won Generated from 38 Projects in Industrial Convergence Sector... Investment Amount Also Reaches 64.1 Billion Won

Achievements of Regulatory Sandbox in the Industrial Convergence Sector

[Sejong=Asia Economy Reporter Kwon Haeyoung] #Mr. A, who gained experience working as an employee at a beauty salon. With limited capital, he tried to open a beauty salon with two acquaintances in similar situations but was blocked by regulations. This was due to the Public Health Control Act, which allows only one business operator of the same type per beauty establishment. Mr. A applied to the government for a regulatory sandbox demonstration exemption for a 'shared beauty salon' service, where one company operates independent one-person beauty salons under their own names while sharing hot perm equipment, shampoo rooms, and customer waiting areas within a single beauty establishment. The government first approved the shared beauty salon in June 2020, and so far four companies have been approved. Beauticians including Mr. A have been able to significantly reduce key startup costs such as goodwill and interior expenses by operating shared beauty salons through the regulatory sandbox.

Two years after the government implemented the 'regulatory sandbox,' which temporarily suspends or relaxes regulations for a certain period to launch innovative products and services, visible results have been produced in the industrial convergence sector.

According to the Ministry of Trade, Industry and Energy on the 12th, since the regulatory sandbox was implemented in January 2019, a total of 102 projects have been approved in the industrial convergence sector, with 39 in 2019 and 63 in 2020. Among these, 75 were demonstration exemptions, 13 were temporary permits, and 14 were proactive administrative actions.

Among the approved regulatory sandbox projects, 38 have already started business and are generating sales. These include not only shared beauty salons but also electric vehicle used battery recycling, health functional food bulk sales, autonomous shuttle buses, DTC obesity and nutrition management, urban hydrogen charging stations, and outdoor autonomous patrol robot businesses. The sales of these companies have rapidly increased from 6.3 billion KRW in December 2019, one year after the system's implementation, to 10 billion KRW in June 2020, and 26 billion KRW in December 2020.

Investment funds have also greatly increased from 5.3 billion KRW in December 2019 to 64.1 billion KRW in December 2020. While some of this is internal investment such as initial facility construction, more than half comes from external investments attracted.

The effects on job creation and reduction of social costs have also been remarkable. A total of 833 people are employed in regulatory exemption projects, of whom 96 have newly gained jobs. Additionally, social cost reduction effects include ▲reduction of air pollution (electric kickboard sharing service) ▲reduction of startup costs (rest area shared kitchen) ▲improvement of user convenience (drone urban gas pipeline inspection) ▲resource consumption reduction (coffee grounds mushroom substrate production), among others.

Goo Yooncheol, Director of the Office for Government Policy Coordination, stated, "Awareness of the regulatory sandbox among companies continues to rise, with satisfaction exceeding 90%. We will continue to develop the regulatory sandbox system so that new technologies and ideas are not hindered by existing laws and systems that cannot keep up with the development of new industries."

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