Creating Sustainable Commercial Districts Led by Private and Local Initiatives

Ministry of SMEs and Startups Announces Comprehensive Plan for Win-Win and Revitalization of Local Commercial Districts
Introduction of Local Commercial District Planners and Local Commercial District Development Fund System

The government is shifting its support measures for revitalizing local commercial districts to be led by the private sector. The plan is to maximize the use of private experts and resources by introducing systems such as regional commercial district planners and regional commercial district development funds.

On the 18th, the Ministry of SMEs and Startups announced the "Comprehensive Plan for Coexistence and Revitalization of Local Commercial Districts (2023?2025)" at the 4th Local Era Committee meeting. This comprehensive plan is the first case to present policy directions and support strategies for local commercial districts under Article 6 of the "Act on Coexistence and Revitalization of Local Commercial Districts." Metropolitan and provincial governments will reflect this plan to establish basic plans considering regional characteristics.

Through the comprehensive plan, the Ministry of SMEs and Startups proposed ▲expanding policy targets from traditional markets to all local commercial districts ▲transferring authority from the central government to local governments ▲changing support strategies from government-led to commercial district stakeholders and private sector-led ▲presenting a new policy paradigm of commercial districts that coexist and mutually develop with local communities. In this regard, the ministry established a vision to rebuild local commercial districts by creating sustainable innovative commercial districts led by the private sector. The goals include discovering and nurturing preliminary local commercial districts and creating core commercial districts that showcase regional characteristics and attractions.

The ministry set four major strategies for revitalizing local commercial districts: ▲creating attractive commercial districts that allow experiencing regional value ▲establishing a sustainable commercial district ecosystem ▲developing commercial districts that coexist and grow with the region ▲creating mutually beneficial commercial districts. Additionally, it plans to support these strategies by reorganizing the promotion system for local commercial district revitalization projects and improving related laws and institutions.

First, to establish a system where private expertise, capabilities, and innovative resources flow into commercial districts, the ministry plans to introduce the systems of ‘regional commercial district planners’ and ‘regional commercial district development funds.’ Regional commercial district planners are private professional corporations that discover local commercial districts and plan, establish, and execute commercial district development strategies. The regional commercial district development fund is a fund jointly created by the region, merchants, landlords, and other stakeholders for commercial district development. A bill to amend the Local Commercial District Act to provide legal grounds for these systems was proposed in October and is currently under review in the National Assembly. Once introduced, these systems are expected to strengthen the self-reliance capacity of local commercial districts and enable sustainable development through private sector-led discovery and revitalization.

Regarding the transfer of commercial district revitalization projects from the Small Enterprise and Market Service Fund to the Regional Balanced Development Special Account starting next year, each region will create commercial districts suited to their characteristics, while the central government will focus on supporting commercial district discovery and expansion, establishing institutional foundations, and building support infrastructure for local governments. Local governments will autonomously select and manage projects according to the characteristics and conditions of their regions and commercial districts, with up to 10 billion KRW invested over five years for brand development, creation of key spaces, and fostering local entrepreneurs to build and revitalize commercial districts. Differentiated strategies will be established through type analysis of each commercial district, and step-by-step commercial district development will proceed through support for ‘Neighborhood Commercial District Development Center Strategy Establishment.’

Won Young-jun, Director of the Small Business Policy Office at the Ministry of SMEs and Startups, stated, “We will steadily implement detailed tasks through collaboration with local governments and related ministries based on the first comprehensive plan presenting the paradigm for local commercial district policies. We aim to create distinctive commercial districts led by the private sector and local communities to respond to the crisis of regional extinction and establish them as hubs for regional balanced development.”

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