South Korea has spent more than two decades turning cities into policy laboratories for digital infrastructure, urban services, and technology trials. On July 24, the government made a revealing move: it created a dedicated statistical classification for the smart city industry so officials can measure its market size, companies, jobs, and growth. That step raises a harder question after years of public programs: how much durable industry has Korea actually built around all those projects?
Korea Can Count Its Smart City Projects More Easily Than Its Smart City Industry
The Ministry of Land, Infrastructure and Transport, or MOLIT, established the Smart City Industry Special Classification on July 24, 2026. The new framework was created because businesses associated with smart cities had been scattered across existing categories such as software, construction, and telecommunications, making the sector difficult to measure as one economic activity.
The classification organizes the Korea smart city industry into four major categories covering technology, infrastructure, services, and related institutions. Those categories are divided further into 10 medium-level groups, 18 subcategories, and 35 detailed categories. MOLIT plans to use the framework for a pilot industry survey in 2027, with market size, companies, employment, and growth potential among the areas it intends to track.
The timing of this new framework matters because Korea has never lacked smart city activity. In fact, the country has spent years creating legislation, national plans, local projects, demonstration programs, research initiatives, and public-private structures around the sector.
What has been harder to establish, however, is how much independent industrial capacity those activities have accumulated.
Two Decades of Policy Built a Deep Smart City Project Ecosystem
Korea began developing U-City projects in the early 2000s, applying information and communications technology to new urban developments. MOLIT’s Fourth Smart City Comprehensive Plan traces subsequent policy through the Ubiquitous City Act, which took effect in 2008, and the restructuring of that framework into the Smart City Act in 2017.
The current Smart City Act explicitly covers industrial promotion alongside urban development, management, and operation. Korea also operates under five-year national smart city plans, giving the sector a level of policy continuity that stretches well beyond a single funding cycle or administration.
That institutional structure has produced considerable activity. According to the Fourth Smart City Comprehensive Plan, 45 metropolitan and local governments received smart city support in 2018. By 2023, the figure had reached 147, while roughly 400 smart solutions had been built across more than 60 detailed fields including transportation, energy, public safety, healthcare, logistics, tourism, and urban platforms.
For Dr. Sung Jin Park, Founder and CEO of SPARKCITY, this continuity is one of Korea’s strongest assets. Park has worked across smart city consulting, product development, and business development at Samsung SDS and LG U+, alongside academic work on cities and technology governance.
In an exclusive interview with KoreaTechDesk, she believed that institutional foundation is the primary reason why Korea has been able to pursue smart city development systematically for so long.
“Although many smart city programs may appear to be separate initiatives, they have evolved within a coherent national policy and institutional framework anchored in Korea’s Smart City Act,” Park said.
“Under this framework, five-year national master plans, sustained public investment, and programs such as the Smart Challenge and K-City Network have created long-term continuity from national policy and strategic planning to experimentation and implementation.” Dr. Sung Jin Park, Founder and CEO of SPARKCITY. | sparkcity.io
And yet, the harder question now is what happens after years of projects and public investment accumulate, and how much of that experience becomes durable industrial capability.
Smart City Projects Have Not Yet Produced the Same Depth of Industry
Park sees a gap between Korea’s ability to generate smart city activity and its ability to convert that activity into an industry capable of sustaining itself through companies, professional expertise, private investment, and long-term market demand.
“Korea has created many projects, but it has been less successful in turning those projects into accumulated industry capabilities, scalable companies, sustainable jobs, and global markets.”
Her concern is broader than the number of Korean smart city companies operating today. She points to areas such as specialized firms, private-sector leadership, dedicated consulting capabilities, and professional career pathways that would indicate deeper industrial maturity.
An industry also needs economic signals that can be observed consistently. Company formation, employment, specialized skills, investment activity, supplier networks, professional services, and commercial demand help show that capability is accumulating beyond individual projects.
Until now, Korea has lacked a dedicated statistical framework capable of measuring several of those indicators across the whole smart city sector. MOLIT acknowledged in its 2024 comprehensive plan that the convergence of multiple technologies and services made it difficult to define the industry’s boundaries, limiting visibility into its specific market size and employment base.
That makes the new 2026 classification more consequential than a statistical housekeeping exercise. Korea is now creating a framework that could eventually show how much economic activity its smart city strategy has actually generated.
Korea’s Own Policy Review Identified the Private-Sector Gap
Essentially, Park’s assessment aligns with concerns already acknowledged within Korea’s own policy circles, including in MOLIT’s internal reviews.
Participation in the Smart City Convergence Alliance expanded sharply as demonstration activity increased. The number of participating companies rose from 113 in 2019 to 933 in 2023, according to the Fourth Smart City Comprehensive Plan. Yet the same assessment concluded that participation remained heavily connected to government-supported projects and that the development of a private-company-led innovation ecosystem was relatively insufficient.
The ministry also noted that public-led information sharing and market support had established cooperation among government bodies, local authorities, companies, public institutions, research organizations, and associations. It found more limited substantive exchange led by the private sector itself.
Those findings help distinguish participation from industrial maturity.
A large number of organizations can participate in programs, exhibitions, government initiatives, and technology demonstrations without necessarily creating an industry that generates its own demand, capital, specialization, and career structures.
Korea’s current policy has already begun responding to that distinction. The 2024 to 2028 comprehensive plan names the creation of a “private-friendly industrial ecosystem” as one of its four major strategies, alongside sustainable spatial models, AI and data-centered urban infrastructure, and international expansion. Its measures include smart city specialized districts, stronger private-sector governance, regulatory reform, and partnerships linking larger corporations with smaller technology companies.
Talent Growth Also Needs an Industrial Destination
The workforce picture offers another clue.
MOLIT also reported that six universities received government support for master’s and doctoral-level smart city talent development during 2019 to 2023, while more than 15 universities independently established related academic programs. The ministry characterized talent development as having achieved considerable quantitative growth, then called for stronger practical training and industry-oriented professional development.
That distinction matters for the smart city jobs Korea hopes to create.
Academic programs can build expertise, but a mature industry also needs organizations able to hire specialists into durable roles, professional paths that reward accumulated experience, and enough commercial activity for that expertise to actually circulate across companies and institutions.
And Park sees that layer as part of Korea’s next challenge. Public programs can create opportunities for experimentation, she said, but long-term industrial development requires companies, professionals, investors, researchers, and other participants to create value with less dependence on the next government-funded project.
“The government has been very successful in creating opportunities for experimentation and implementation, but it cannot build a sustainable smart city industry on its own.”
Korea Already Has Evidence of Industrial Convergence
Still, describing Korea’s smart city sector as an industry that has failed to form would go too far.
A 2026 study published in the Journal of the Korean Regional Science Association examined changes in Korea’s smart city industrial structure across 2005, 2015, and 2024. Researchers Yu Da-eun, Oh Myoung-taek, Cho Youngtae, and Jo Sungsu found increasingly interconnected relationships among IT manufacturing, IT services, and professional, scientific, and technical services.
Their analysis found that the structure had developed into a convergent ecosystem connecting manufacturing, knowledge, and digital services by 2024. IT services remained an important point of industrial connectivity, while professional and technical services increasingly linked manufacturing and service activities.
That suggests Korea has already accumulated meaningful industrial capabilities. The unresolved question concerns their depth, independence, and capacity to compound into identifiable private markets.
The new statistical classification may make that question easier to answer.
The Next Smart City Benchmark Is Economic Accumulation
Korea’s difficulty may also reflect the nature of smart cities themselves. Park cautioned against assuming that another country has already perfected a self-sustaining smart city industry, given how broadly the sector reaches across construction, mobility, energy, telecommunications, software, and public services.
“Some may argue that, from an industrial perspective, smart cities are still in their formative stage,” Park said.
“Although the concept has existed for more than two decades, the industry itself is only beginning to mature globally.”
That uncertainty also changes how Korea’s experience should be interpreted. Rather than measuring the country against a clearly established global model, Park sees the current period as one in which smart city technologies, companies, and business models are still developing into a more recognizable industry.
And it actually makes Korea an important test case. It already has legislation, institutional continuity, hundreds of implemented solutions, local-government participation, academic programs, and a large network of companies and organizations engaged with smart city initiatives.
The next milestone will be harder to display on a project map. Korea will need to show that those accumulated capabilities can produce enduring companies, specialized professions, skilled jobs, investment, and commercial activity that persist as the public sector’s role evolves.
Hence, if that transition succeeds, Korea’s experience could offer something more useful globally than another showcase city: evidence of how a long-running smart city policy system can truly mature into an industry.
Key Takeaway
- Korea’s smart city challenge is shifting toward industry formation. Two decades of policy have built a strong project ecosystem, but true industry maturity requires durable companies, jobs, specialization, private investment, and real market activity.
- MOLIT created the Smart City Industry Special Classification in July 2026 to measure market size, companies, employment, and growth across Korea’s fragmented smart city economy.
- By 2023, Korea had supported 147 local governments and built about 400 smart solutions across 60+ fields, showing strong implementation capacity.
- The key test is whether this capability can become a self-sustaining industry, with scalable companies, skilled talent, stable jobs, private-sector leadership, and markets that grow beyond government projects.
- Korea’s national plan reflects this shift, noting rising private participation but still limited private-led ecosystem development.
- The global question is whether Korea can turn its smart city base into a measurable, self-sustaining industry—a model for converting urban innovation policy into lasting economic capacity.
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Autor(en)/Author(s): Zee Cindy
Dieser Artikel ist neu veröffentlicht von / This article is republished from: Korea Tech Desk, 28.07.2026
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