Overlapping functions with an existing program proved decisive in bringing the Green Startup Town initiative, a flagship regional startup project under the Moon Jae-in administration's Korean version of the New Deal, to the brink of termination after seven years. The government created a separate startup hub program even though Startup Park, which plays a similar role, was already up and running — and then halted new construction for the same reason. Waning policy momentum after the change of government also appears to have weakened the case for expansion.
Green Startup Town launched in 2020. The plan was to concentrate startup workspace and incubation, research and development, investment and networking functions in a single downtown location, then add housing, cultural and welfare facilities to create a mixed-use startup hub. Six sites were selected, starting with Cheonan in South Chungcheong Province and followed by Gwangju, Daegu, Wonju in Gangwon State, Busan and Jinju in South Gyeongsang Province. Only Cheonan, however, has been completed and put into operation. Gwangju, Daegu and Wonju are awaiting local government approval needed to begin operations, while construction is still under way in Busan and Jinju.
Startup Park, the program cited as overlapping, began in 2019. It brings startups, investors, universities and research institutions together in one place to build regional innovation ecosystems. The Ministry of SMEs and Startups tried to differentiate the two by applying a mixed-use model to Green Startup Town, adding housing, cultural and welfare functions. As the projects progressed, however, core functions such as startup incubation, investment linkage and networking turned out to overlap. The ministry ultimately concluded there was little benefit in running the two separately.
The ministry will handle future demand for new regional startup hubs through Startup Park. It plans to complete the Busan and Jinju projects now under construction by next year and select no additional sites. The related budget will fall 84% to 3.6 billion won next year from 22.5 billion won this year. Green Startup Town will be operated with local government budgets alone, without central government funding.
An official at the ministry said the two programs are similar in that both build regional startup infrastructure, despite differences in the details. "Much of the related infrastructure has already been built in key regions, and we judged that Startup Park can adequately support any additional demand that may arise," the official said.
Other ministries have their own Korean New Deal projects that were scaled back or halted as policy momentum faded or governments changed. Shifting policy priorities after the transfer of power left some programs with smaller budgets and, in effect, dead in the water.
The Ministry of Health and Welfare's program to develop leading smart hospital models, promoted as the flagship health care component of the Digital New Deal, closed two years ahead of schedule. The aim was to apply information and communications technology such as fifth-generation mobile networks, artificial intelligence and wearable devices to clinical settings, prompted by the infectious disease crisis.
The program made an ambitious start in 2020 at the height of the COVID-19 outbreak, backed by a supplementary budget, but failed to clear fiscal authorities' assessment of weak performance. A plan to build models in 18 fields by 2025 stopped at 12, and the related funding disappeared entirely from the 2024 government budget proposal. The global smart hospital market is growing rapidly on the back of population aging, shortages of medical staff and demand for more efficient hospital operations. The Business Research Company, a global market research firm, projects the smart hospital market will reach $190.56 billion, or about 260 trillion won, by 2030. Industry officials worry the halt could leave Korea trailing in global smart hospital competition.
The Ministry of Trade, Industry and Energy, now the Ministry of Trade and Industry, offers another prominent case of downsizing with its residential smart power platform project. Launched in September 2020 as part of the Green New Deal, it aimed to improve energy efficiency by installing advanced metering infrastructure in 5 million high-voltage apartment households. Total spending was set at 705 billion won, including 352.5 billion won in central government funding. Weak demand cut the scale in half, to 2.45 million households from the original 5 million. Even the reduced target was not met on time, and the final year of the project ended in late 2023 after two extensions.
Funding was also cut for renewable energy core technology development, which had seen support increase under the Green New Deal. In a second supplementary budget in 2022, the government trimmed 21.9 billion won, focusing on new projects it judged could not be carried out within the year. The budget fell to 275.29 billion won from 297.19 billion won. Among new project funding, solar power fell to 9.134 billion won from 15.994 billion won, and wind power to 19.008 billion won from 39.232 billion won.
The Ministry of Environment, now the Ministry of Climate, Energy and Environment, also ran into trouble with its Smart Green City program. In 2020 the government selected 25 sites nationwide as a Green New Deal flagship and planned to spend a combined 290 billion won in 2021 and 2022. Two of them, Suncheon and Bucheon, were canceled, and not a single site was completed by the original end date of late 2022. Construction continued under an extended timeline, but the program wrapped up without any additional nationwide round of site selection.
Regionally balanced New Deal projects led by local governments have all but vanished. The Ministry of the Interior and Safety's competition for outstanding regionally balanced New Deal projects was held only once, in 2021. A task force set up within the ministry to run the program also disappeared as government organization and policy were overhauled after the change of administration.
Lim Jung-wook, head of the Startup Alliance and a former director general for startups and venture innovation at the Ministry of SMEs and Startups, said Green Startup Town was one of the projects handled within the ministry by policy divisions rather than the startup side. "Once it is merged with Startup Park, it should be better able to serve its intended role in nurturing founders and energizing regional startup markets," he said.
Earlier national agendas met similar fates, including the Lee Myung-bak administration's low-carbon green growth and the Park Geun-hye administration's creative economy, both of which lost standing sharply after governments changed. Yeom Myung-bae, an emeritus professor of economics at Chungnam National University, called the steady stream of programs shelved with each transfer of power a serious misstep for a government that needs to build the country's growth engines. "Even now, policy should be steered in a direction that genuinely advances the national economy," he said.
