Choi Taewon: "Cities That Lift Regulations Will Lead the Future"... A New Laboratory for K-Industry [Regulation-Free City, Mega Sandbox] ①

Countries Worldwide Accelerate Deregulation at the City Level, Spurring Industrial Innovation
KCCI Proposes Private Sector-Led "Mega Sandbox" as a Solution for Regional Growth
Government Considers Institutionalizing "Mega Special Zones" and "Korean

Editor's NoteThe call for deregulation is echoing around the world. This sense of crisis stems from the realization that emerging industries such as artificial intelligence (AI) cannot be nurtured under existing rules. Cities like Wuhan in China, Ube City in Japan, Singapore, and Dubai in the United Arab Emirates (UAE) have already relaxed regulations at the city level, allowing companies greater freedom in their activities. In Korea, there is a growing demand to boldly lift regulations so that new industries can take root. At the heart of this movement is a sense of urgency: within the constraints of the past, neither industrial growth nor the nation's future can be expected. Recently, the business community has discussed the concept of a 'mega-sandbox,' which would integrate industry, infrastructure, education, and systems into a unified, city-scale experimental platform. Rather than relaxing regulations for individual companies or sectors as in the past, this proposal advocates turning entire cities into experimental platforms, lifting regulations as a package. The idea is that allowing companies to experiment directly will create a virtuous cycle, attracting jobs and investment. The Asia Business Daily reporting team visited key experimental cities such as Wuhan, Singapore, and Dubai in September to analyze city-level approaches to industrial innovation. Ultimately, the solution lay in government institutional support. Over the next four installments, we will present concrete policy directions for the Korean government based on the successes and failures of various countries.

Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, has proposed the creation of a deregulated industrial experimental city, the 'mega-sandbox,' as a new growth strategy to address Korea's structural challenges such as regional stagnation, slow industrial growth, and talent outflow. He believes that a city-level innovation platform, integrating deregulation, education, infrastructure, data, and investment environments, can establish a structure in which regions can achieve self-sustained growth.

Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry. Photo by Kim Hyunmin

On October 20, Chairman Choi echoed the purpose of The Asia Business Daily's special report, 'Korea’s Grand Transformation: Mega-Sandbox Cities Without Regulation,' stating, "The mega-sandbox can provide a multifaceted solution to the region's complex issues, such as delayed innovation, closed regulations, concentration in the capital area, worsening low birth rates, and the risk of regional extinction." In a message sent to this news outlet, he added, "The foundation of the mega-sandbox is the private sector. Where companies gather, jobs are created; where jobs are created, people come; and where people gather, even more companies will enter, forming a virtuous cycle."

The core of his solution is that cities must be transformed into platforms for industrial experimentation. He believes that sustainable growth is only possible if resources and opportunities concentrated in the capital area are redistributed to the regions and if city-level, company-driven innovation ecosystems are established. To achieve this, the government must move beyond partial adjustments to individual systems and instead design and boldly open a structure that packages deregulation, infrastructure, and education together. Only when the private sector leads these experiments will a self-sustaining growth circuit in the regions be completed.

Currently, the Korean economy faces a simultaneous convergence of weakening manufacturing competitiveness, a lack of new growth industries, and the risk of regional extinction due to the concentration of resources in the capital area. Aging industrial complexes have lost their vitality, and as young talent continues to move toward the capital area, the industrial ecosystem in the regions is becoming increasingly depleted. The mega-sandbox concept proposed by Chairman Choi is emerging as a fundamental solution to break through these structural bottlenecks.

The government is also considering institutionalizing a city-level industrial experiment model. This includes the 'mega-special zone,' which bundles industry, infrastructure, and regulation with continuous deregulation authority, and the 'Korean City' concept, which combines new industry demonstration zones and residential functions adjacent to aging industrial complexes. The government is studying a plan to consolidate regulatory relaxation systems previously dispersed across ministries under the Prime Minister's Office and to have the President directly oversee regulatory reform.

The government's role goes beyond improving systems to securing real execution power. In overseas cases, Wuhan in China transformed the entire city into a testbed for autonomous driving, creating ‘regulation-free roads.’ The government established an environment where companies could freely test their technologies by overhauling insurance and infrastructure. Singapore linked its downtown into a massive network, allowing simultaneous testing of robotics and logistics systems. Dubai established a Minister for AI and a virtual asset regulatory body to attract global capital and technology companies.

Korea's regulatory free zones and general sandbox systems remain limited. Regulatory free zones temporarily relax regulations for certain industries in designated regions and operate primarily for demonstration purposes. The general sandbox system allows companies in areas such as fintech (financial technology) and mobility to test their innovations under temporary regulatory exemptions. However, both systems have a narrow scope and are insufficient to drive broader changes across industries.

Jung Byungkyu, Director of Regulatory Innovation Planning at the Office for Government Policy Coordination, said, "The mega-sandbox is a new policy framework that combines deregulation with infrastructure planning. The government should propose a broad national development strategy, while the private sector should take the lead in experimentation and investment within that framework."

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