Incheon emerges as economic hub of NE Asia

South Korea’s economic progress over the past six decades is known as the “Miracle on the Han River”, and now the national government is trying to conjure up a second miracle based on technological innovation and the so-called “Creative Economy”. How are managing this transition towards a Creative Economy here in Incheon?

From its inception, the current central government has expressed its determination to promote a creative economy that facilitates the convergence of ideas and sustainable economic growth through start-ups and job creation.

As a basis for realizing the creative economy, a total of 17 Creative Economy & Innovation Centers have opened in cities and provinces nationwide to support start-ups, ventures, SME innovation, and local specialty industries.

Since the opening of the center here in Incheon, it has expanded its functions in order to take a lead in youth employment through an employment zone that offers customized job-matching programs and training initiatives.

Incheon City has combined Incheon’s physical distribution infrastructure with Hanjin Shipping’s know-how to promote smart logistics ventures, support the creation of new industries, and improve the export competitiveness of SMEs and venture companies through public-private joint logistics consultation.

In addition, the city government has been running programs aimed at supporting the entry of Korean start-ups into the Chinese market.

Looking back on the performance of the Incheon Creative Economy & Innovation Center, which celebrated its first anniversary on July 20, 2016, it has brought about tangible results. The public-private joint logistics consultation center, designed and run by the city government, has supported some 50 companies and helped them to run their distribution systems efficiently.

For 44 start-ups wishing to enter the Chinese market and attract investment, the city hosted a local conference for investment and investor relations, resulting in 180 investment consulting cases and 65 letters of investment intention. Moreover, through our one-stop services of legal, financial and patent related consultation, as well as professional management consultation, the ecosystem for start-ups has been strengthened.

Incheon is home to the Incheon Free Economic Zone (IFEZ), as well as the country’s main international airport and second busiest port. In an interview you conducted shortly after being elected as Mayor, you said you would put most of your efforts into making Incheon the center of the global economy. How do you assess Incheon’s regional and global competitiveness as a city for business, trade and investment at present?

Incheon is arguably the transportation and logistics hub of Northeast Asia, being home to Korea’s main international airport and Incheon Harbor, the second largest cargo handling port in the country.

In recognition of this, Incheon City has implemented policies to ensure the international airport is promoted as a key component of the city’s competitiveness. We consider the airport not just as an air transportation facility but as an industrial complex of convergence between manufacturing, commerce and services. The airport underpins the presence of a strong industrial aircraft maintenance and parts industry in Incheon, as well as the logistics, tourism and MICE industries. To build on this advantage, we are planning to create an aerospace industry academy district in Songdo and development projects are also underway in the Yeongjong area.

In addition to the airport, Incheon Harbor is an important component in our emergence as a logistics hub as it plays a key role in trade with China. Indeed, the port logistics industry accounts for 33.8% of the gross regional product. In 2015, Incheon Harbor handled around 2.4 million TEU, achieving 157 million tons in total, making it the second biggest port in Korea.

Currently, several large-scale port hinterland development projects are underway including the construction of Incheon New Port, a new international passenger terminal, golden harbor, and the second Aam logistics complex.

The city government has successfully completed the Incheon port infrastructure expansion project in collaboration with Incheon Port Authority, and we have continued to make efforts to open new routes and attract investment for more cargo handling with the opening of a new port.

Furthermore, in order to create a marine city that is a harmonious combination of its urban center and port by 2025, the city plans to invest 2.3 trillion won, targeting 168 islands with waterfront space creation and the construction of a national maritime museum. With the successful creation of new ports and terminals, Incheon Harbor will attract more ships and cargo to become a logistics hub of the pan-Yellow Sea sub-region and establish itself as a flagship marine tourism harbor of Northeast Asia, drawing more international visitors.

Let us be clear, Incheon is a prime investment destination with easy accessibility, excellent human resources and outstanding infrastructure. Firstly, it enjoys an extraordinary geographical location at the center of Northeast Asia. This region accounts for 20% of the global economy. The city of Incheon is located within a two-hour flight from 84 major cities with populations of more than 1 million people.

Secondly, our city is equipped with perfect logistics and transportation infrastructure, as I have already mentioned. Incheon International Airport has been consistently ranked as the best in the world in terms of airport service, whilst Incheon Harbor can accommodate super large freighters. Not only that, but Seoul and Incheon enjoy excellent public transport and road connections.

Thirdly, we have the Incheon Free Economic Zone, which is a new growth engine for the whole country. Differentiated future cities are also being developed in the districts of Songdo, Yeongjong and Cheongna, which play host to numerous international organizations and foreign companies.

Fourthly, Incheon has the perfect residential conditions for global citizens. Incheon Free Economic Zone is home to international schools, as well as world-class medical and welfare facilities. In addition, there are various leisure and cultural facilities such as exhibition and performance venues, golf courses and shopping centers.

Finally, Incheon is a rich industrial complex with high quality manpower and tourism resources. There are 10 industrial complexes (3 national and 7 regional) and two more will be built. This is enabling the transition from traditional manufacturing into value-added and knowledge service industries. Businesses can tap into excellent manpower supplied by Incheon’s colleges and the global campuses of international universities located here. What is more, Incheon has great potential in tourism thanks to our beautiful islands and historical sites.

Over the past 13 years, IFEZ has attracted international corporations in aerospace, next-generation semiconductors, bioengineering, and other advanced industries, as well as global universities. Earlier we spoke about the need for the country to generate new growth engines. Which industries will be the key growth engines of the Incheon economy? Which sectors have the most potential for further development and investment in Incheon?

Incheon City is currently enhancing the competitiveness of industrial sites by improving the ecosystem for the beauty industry in Namdong Industrial Complex; the Bio Research Complex in Songdo; the cutting-edge automobile parts cluster connecting GM Korea R&D center in Seo-gu and Cheongna Industrial Complex; and Cheongna Robot Land, where robot industry infrastructure is being built with robot industry support centers and robot research institutes.

Last year, under the project name “Eight Strategic Industries of Incheon City: Vision 2050”, the city selected eight industries as future growth engines of our economy. These include high-tech automobiles, robotics, biotechnology and beauty.

In order to upgrade the automobile parts industry, a bedrock of our economy, we will build Incheon High-tech Park, which will focus on R&D for high-tech automobile parts by utilizing ICT convergence technology.

To secure global competitiveness in the robotics industry, Incheon City is building Robot Land, which is scheduled to be completed by the first half of 2017 with a 120 billion won budget from the central and city governments.

In addition, various business support policies are being developed to increase the utilization of robotics industry promotion facilities and diverse efforts are being made to attract robotics industry anchor facilities and related companies, institutes and universities. This year, the city invested around 30 billion won in the robotics industry from its budget, which is a relatively large investment for a single sector.

Aside from this, Incheon City aims to become one of the five major biotechnology cities in the world, centered on Songdo, a production base for global biopharmaceutical companies. To this end, we will attract global bio companies such as Samsung Bioepis and Celltrion, create 250,000 new jobs, and reach 33 trillion won in biotech exports. Additionally, thanks to synergies between the beauty industry and the Western food industry, we are emerging as a global bio-health specialized city.

Incheon is convenient for imports and exports thanks to its airport and harbor. Approximately 200 cosmetics companies are concentrated here, which gives us a solid base to grow the beauty industry. The city has even launched its own cosmetics brand, Oull, in collaboration with SMEs in China, Singapore and Korea, and now we are expanding this into other overseas markets, including Indonesia.

In 2015, the US remained the number one source of FDI inflows for Korea as a nation, injecting $5.46 billion into the national economy, mainly into IT and logistics. At IFEZ, we saw investments from five major US firms. In which sectors do you see the most potential for American investment in Incheon going forward, and how important is American investment to the future growth prospects of Incheon?

Incheon is one of the three largest cities in Korea with a population of more than 3 million. As already mentioned, we are located at the economic center of Northeast Asia, a core region that accounts for one-fifth of the global economy. We are in the best position to take advantage of Korea’s extensive free trade network, including the Korea-China FTA, which recently took effect.

The movement of logistics and transportation is very smooth thanks to Incheon International Airport, Incheon Harbor and Incheon Free Economic Zone, a new growth engine of Korea that attracts large-scale foreign investment.

In addition, Songdo International Business District is home to the offices of 13 international bodies and a total of 36 foreign companies have set up joint ventures including Gale International from NYC and Caesars Entertainment, a casino business based in Las Vegas. Plus, there are various leisure and cultural facilities such as international schools and shopping centers, which allow Americans and other foreigners to live here conveniently.

The city’s vision slogan is “Incheon’s dream, Korea’s future”. What is the brand message that you are trying to convey to an international audience?

In an era when a city can determine a nation’s competitiveness, the city’s branding policy is really important.

As you can see from NYC, Berlin and Copenhagen, we need to make the best use of the city’s brand from a strategic point of view to differentiate our advantages and overcome regional limitations. However, for Incheon City, there are certain shortcomings in that sense.

Incheon City has used “Fly Incheon” as its brand since 2006. However, that brand is insufficient to represent the future of Incheon, which has been rising very fast as an international city through extraordinary growth.

Accordingly, the city government has been working on a new brand identity, which will symbolize the status of Incheon today. The brand identity is set to be unveiled in September 2016.

Through citizen participation and phased development, we will come up with a comprehensive strategy of boosting PR, tourism, sports, and marketing with our new brand identity, and prepare guidelines that can allow companies and citizens to utilize it at home and abroad.

Under a uniformed city branding policy, we will continue to communicate the hidden treasures of Incheon City, including our unique history, culture, art and tourism.

When you were elected you said you would try your best to make sure that 3 million Incheon citizens will remember 2014 as the first year of Incheon hope. How would you like Incheon citizens to remember 2016/2017? What are your key priorities for the year ahead and how close are you to achieving your objectives?

Over the past two years, we have focused on reducing debts, solving problems and nurturing the dreams of the people. We now want to focus on bringing happiness to citizens and opening up the era of Incheon sovereignty.

The city government has presented its core projects for the remainder of its term in office, including the establishment of Incheon sovereignty in public livelihood, transportation, maritime affairs and the environment. We are trying to create an Incheon where everyone wants to visit and live.

As a first core project, the city plans to create an Incheon welfare model, which expands fiscal input into areas directly linked to citizens’ quality of life such as welfare, culture, sports and environment.

The second aim is to secure sovereignty in transportation. We will successfully finish the ongoing projects such as the Incheon-bound KTX and GTX lines and the Subway line 7 extension to Cheongna, as well as improving accessibility to our 168 “treasure islands”.

In terms of safeguarding our environmental sovereignty for future generations, as the city that houses the headquarters of the Green Climate Fund (GCF), we will become a “global green city” where citizens can breathe clean air.

Lastly, our debt problems, which have been impacting the city for quite a long time, will definitely be solved and Incheon will return to normalcy. Our pending issues will be resolved through communication and governance.

Songdo IBD has been chosen as the venue for the New Cities Summit in 2017. Organizers have said Songdo IBD is redefining sustainable urban development. To what extent can Incheon be considered an international role model for environmentally friendly, smart city development?

As mentioned, Incheon City houses the GCF headquarters, which plays a pivotal role in the global response to climate change and sets city policy by promoting various environmentally friendly projects. The aim is to change the structure of the city to that of low-energy consumption.

It is not an exaggeration to say that the success or failure of the new global climate change regime depends on the role of cities since COP21. Accordingly, the city government has solidified its willingness to tackle climate change. For example, last April we declared the first year for reducing greenhouse gas emissions. From next year, we have set a target to reduce greenhouse gases by 25.9%, which is more than the central government’s goal of 25.7%. We will also participate in a carbon information disclosure project, sharing the essential information with international society. To achieve our reduction goal, diverse efforts are being made by government, citizens and industries based in Incheon. Moreover, as our population expands beyond 3 million, the city plans to increase green areas rapidly by planting 30 million trees.

Furthermore, Incheon City is spreading the eco-friendly city model combined with smart technology. The prime example is Songdo International Business District, which will be a U-city in combination with eco-friendly technology and urban design. Zero-energy buildings and LEED (Leadership in Energy and Environmental Design certification system) are being heavily promoted and currently account for 63% of all buildings in Songdo. Along with that, we are expecting reduced emissions and non-tax revenue increases from sales of heat from waste burning.

Energy independent islands are also being promoted, which will run on renewable energy such as solar, wind, tidal energies.

Incheon City will make endless efforts to enhance the quality of citizens’ lives and create a sustainable, eco-friendly, smart city.

You are a son of Incheon who gave up a position in the National Assembly to become Mayor of this great city. How would you sum up your overall vision and ambitions for your home city?

Incheon is the city where I was born and raised and where my dreams were nurtured. I have great expectations for my hometown and I felt it could benefit from my experience and knowhow learned during my career as minister, lawmaker and local government head. At the same time, however, I feel huge responsibility. I can proudly say that I have worked for my city 24/7 with great enthusiasm since taking office.

We have successfully worked towards fiscal consolidation by reducing the deficit by 2 trillion won, and we have established an Incheon-centered railway network and public transport system suitable for a city of 3 million inhabitants. Additionally, we have reaped various successes including the generalization of the Seoul-Incheon Expressway, opening the peak of Munhaksan Mountain and hosting the National Museum of International Alphabets.

Building on the strong foundations of Incheon’s growth achieved by citizens’ cooperation and participation over the past two years, I would like to state that during the rest of my tenure, the city will present policies through which citizens can feel real benefits and pride in our community culture.

As you might understand, our society has been suffering from polarization due to the proliferation of irregular workers and widening income and wealth disparities. In order to resolve this situation, Incheon City is planning to promote a 21st century version of community where everyone feels happy through a new growth and welfare model. We are seeking new support measures for socially disadvantaged people such as irregular workers.

We are entering the era of Incheon sovereignty with a sense of duty. Our city must lead the way in forging a new direction for Korea, not just in its appearance but also in substance. We must take the lead in social reforms.

I have always made efforts to run the city government from the citizens’ viewpoint and with citizen-oriented goals. Looking forward, I will always listen to the voices of citizens and work hard for their happiness on behalf of all civil servants.