9 out of 10 Companies Approved for Regulatory Sandbox Say "It Should Be Further Activated Under the New Government"

Survey of 253 Approved Companies... 87% Say "It Helped Business Promotion"
"Need for Institutional Improvements Such as Rapid Regulatory Adjustment and Shortened Review Period" Suggested

President-elect Yoon Suk-yeol meeting with Philippe Lefort, the French Ambassador to Korea, at the transition office in Tongui-dong, Jongno-gu, Seoul, on the 27th of last month. Photo by Transition Office Press Corps

[Asia Economy Reporter Moon Chae-seok]

#The autonomous delivery robot 'Dilly' is delivering food throughout Suwon thanks to the regulatory sandbox. Due to the Road Traffic Act, the robot was classified as a 'vehicle,' which prevented it from entering sidewalks and parks despite the technology being developed. The sandbox resolved this issue. A company official said, "Through the sandbox, we had the opportunity to test the safety of the delivery robot and accumulate operational know-how," adding, "We hope that related laws and regulations will be improved so that Dilly can roam nationwide."

#The converged health functional food 'Kanlove X2,' which combines juice product lids with supplements, was only able to be launched in the market in December last year after receiving sandbox special approval. Regulations previously prohibited placing supplements in lids. Under current law, general food manufacturing and processing businesses are banned from subdividing and manufacturing health functional foods such as tablets and capsules. Converged health functional foods are gaining great popularity in the market, and other companies with special approvals are also releasing products one after another. A company official said, "Thanks to the sandbox, a product that might have remained just an idea was able to see the light of day," and added, "We hope more companies receive help from the sandbox so that innovative ideas can shine."

Survey results from companies on the new government's regulatory sandbox operation direction. (Source: Korea Chamber of Commerce and Industry)

As expectations for regulatory reform grow ahead of the launch of the Yoon Suk-yeol administration, companies have called for further activation of the sandbox system. The Korea Chamber of Commerce and Industry (KCCI) announced on the 1st the results of a survey on 'Corporate Perceptions of the Sandbox System' conducted among 253 sandbox-approved companies. 89.7% of respondent companies answered that "the new government should further activate the sandbox system." Only 5.9% said it should be reduced or abolished. A KCCI official explained, "This result reflects high satisfaction from companies that were unable to launch products and services with new technologies in the market due to regulations but were able to open a path through the sandbox."

Approved companies responded that the sandbox system gave momentum to their business promotion. When asked if it helped with business promotion, 87.4% of respondents said "it was helpful." Specifically, they said it helped with "pre-verification of products and services" (78.7%), "market launch" (77.5%), "investment attraction and business expansion" (68.8%), "market development" (64.0%), and "sales increase" (51.4%). A KCCI official said, "Over the past three years of sandbox operation, consensus on the necessity and effectiveness of the system has spread," adding, "Since the sandbox is the only means to bypass regulations and try new attempts, we hope the new government will improve it into a more complete system."

Companies also recognized that the sandbox positively influences fostering new technologies and industries as well as regulatory relaxation. Regarding the sandbox's impact on our industry and economy, 88.1% responded that it "has a positive effect on fostering new technologies and industries," and 87.4% said it "has a positive effect on regulatory relaxation." When asked what positive role it plays in regulatory relaxation, the most common answer was "securing grounds for regulatory law revision" (39.5%). This was followed by "negative regulation (allowing everything except prohibited items) testing ground" (28.1%), "breakthrough for conflict issues" (20.2%), and "inducing proactive administration by public officials" (12.2%). When asked if the sandbox is a recommended system for companies struggling with business promotion due to regulations, 88.1% answered "yes." This means companies perceive the sandbox as a means to resolve regulatory difficulties.

Survey results from companies on institutional improvements needed to activate the sandbox. (Source: Korea Chamber of Commerce and Industry)

Companies said that the top priority is to activate the sandbox and achieve "rapid regulatory revision" (87.8%). This means not only granting exceptions through the sandbox but also leading to substantial regulatory relaxation. Other tasks to activate the system include "shortening the review period" (85.4%), "improving user convenience" (83.8%), "expanding support for approved companies" (83.0%), and "relaxing business progress conditions" (81.8%). Regarding support for approved companies, respondents said "management, technical, and legal consulting" (25.3%), "loans, preferential guarantees, and tax support" (24.5%), "establishment of exclusive funds for approved companies" (20.6%), "promotion and marketing support" (17.0%), and "export and market support" (10.9%) are needed.

Ok Hye-jung, head of the Sandbox Management Team at KCCI, said, "As shown in the survey results, the sandbox serves as an 'innovation testing ground' that opens business opportunities for innovative companies," adding, "We will cooperate with the government so that the sandbox is further activated and achieves more results through system improvements under the new administration."

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