The government has launched three mega-projects: semiconductors, physical robots, and artificial intelligence (AI) data centers. While there are high expectations that this marks the beginning of a major transformation in Korea's industrial structure, doubts about its feasibility are also considerable. In any case, it is clear that as the global competition for technological supremacy intensifies, the importance of national strategy for securing leadership in future industries has grown even greater.
In an interview with Seoul Economic Daily on Tuesday, Sung Si-kyung, president of the Korean Association for Public Administration and a professor of public policy at Dankook University, said, "For national strategic industries to succeed, above all we must reduce unnecessary administrative regulations and carry out large-scale projects with a sense of speed." He added, "In the end, a strategic government, an executing government, will decide national competitiveness." His point is that, amid growing trade pressure, the government's role has become just as important as that of businesses.
Regarding the 9th popularly elected local governments, which began new terms this month, he stressed, "They must make solving the problem of regional decline their top priority and actively pursue administrative integration centered on daily life and economic activity." He emphasized, "Administrative integration needs to proceed not only at the metropolitan level but also to include basic local governments."
- What is the government's role in the global competition for technological supremacy?
△We are now in an era where competition between nations overwhelms competition between companies. This is because, as trade pressure grows, it is the government representing the nation, rather than individual companies such as Samsung Electronics or SK hynix, that must negotiate with the United States and others. The government's role is especially decisive in AI and energy. Korea's energy system is largely handled by the public sector, and AI also requires enormous infrastructure and institutional support. Leaving it to the market alone risks falling behind in global competition.
- Which fields should our government focus on most?
△AI and energy are core industries that will determine national competitiveness. When the government has made a strategic judgment, as with the recently announced three mega-projects, what matters now is how quickly it executes. Korea has often missed opportunities because of slow judgment. Today, the pace of technological change is incomparably faster than in the past. If we fall behind in the AI competition, it becomes difficult to close the gap. In the end, a strategic government, an executing government, will decide national competitiveness.
- There are also calls to eliminate unreasonable administrative regulations.
△Regulations have historically had an aspect of vested interests for civil servants, but recently they have functioned as a key factor that triggers or mediates conflicts among various interest groups. There are still quite a few regulations for which only their justification is emphasized while their actual policy effects or social benefits go unverified. Regulations with no real benefit should be boldly lifted. We should also actively consider an approach that uniformly eliminates existing regulations while keeping only certain administrative safeguards and limiting conditions, as in the regulatory sandbox. Regulation must be based on empirical judgment, not on declarations.
- How do you view the government's mega-projects such as semiconductors and AI?
△The basic direction is right. There was much controversy during the Park Chung-hee administration when POSCO's steel mill and the Gyeongbu Expressway were being built, but they ultimately became the foundation of national growth. Today's AI and semiconductor investments carry a similar meaning. What matters, however, is not simply the announcement but the execution. There are many challenges to solve, such as water and power supply and securing specialized manpower. If the government intends to produce results within its term, how quickly it can resolve these obstacles will be the key to success.
- What is the urgent task for the success of the mega-projects?
△In the end, it is regulatory reform. There are quite a few cases where institutions and administrative procedures hold back investment. This is true for AI and for semiconductors alike. Even when companies want to invest, permits and various regulations take too long. If the government has decided on strategic investment, it must also provide administrative and policy support systems, such as various permits, to match. We cannot win in global competition with time-consuming decision-making of the old style and silos between ministries. Administrative capacity that reduces various regulations and speeds up decision-making can ultimately lead national strategic industries to success.
- What are the recent global trends in national administration?
△In the past, administration emphasized the efficiency of the government's internal management systems, such as organization, personnel, and finance, but today it is expanding toward raising national competitiveness and designing the transition to a future society. Administration has taken on not merely the role of managing government but of designing the nation's future. How the nation cultivates strategic technologies, how it shares the fruits of growth, and what role the government should play in these processes have become important in administration.
- Shouldn't the government's role also change in the AI era?
△The government should not merely be an agency that executes budgets but should play the role of creating an innovation ecosystem. In the United States, too, Silicon Valley did not grow through the private sector's power alone. It was possible because the government created research and development (R&D), institutional design, and an investment environment. In Korea, such an ecosystem has not yet been sufficiently built. It is too slow to simply wait for companies to grow on their own. Especially in national strategic industries such as AI and energy, the government should present the direction and, by utilizing R&D and public procurement, create the ecosystem as an initial buyer and risk absorber.
- What should the current government organization especially supplement?
△It was a fairly meaningful attempt for this administration to create the National AI Strategy Committee. Recently, however, the pace of progress feels as if it has slowed. There are also parts that have not yet been clearly settled — whether to pursue AI with a focus on R&D or on industrialization and practical application. Setting a strategy is important now, but the ability to execute is even more important. Rather than dispersing authority, we must grant stronger authority to the control tower and build a system that can make decisions quickly. In strategic fields such as AI, the speed and consistency of policy connect directly to national competitiveness.
- Deepening polarization is a social problem.
△As productivity rises, polarization is to some extent inevitable. When AI and robots spread, capital productivity rises more sharply than labor productivity. There is no case anywhere in the world where polarization has disappeared as an economy develops. What matters is not eliminating polarization but the government moderating it so that it does not deepen excessively. If excess tax revenue arises, it is desirable to use it in a direction that raises future productivity and eases social gaps, rather than simply distributing cash.
- The 9th popularly elected government has launched. What is the top priority local governments should consider?
△It is an active response to the problem of regional decline. Until now, the approach has often been to divide budgets among each area at risk of decline. But going forward, we need to change the approach. In particular, we should also consider a way to grow hub cities and regions further, raising the competitiveness of entire living zones. We need an approach that raises residents' quality of life through inter-regional linkage and division of functions.
- What about readjusting the roles of central and local governments?
△The central government is still seen as the authority and planning body, and local governments as the execution system, but this must change. In terms of tax revenue in particular, the ratio of national to local taxes is 75 percent to 25 percent. Yet when you look at how budgets are actually executed, the central government accounts for about 40 percent and local governments about 60 percent. In the end, it is a structure in which the central government collects the money and distributes it to local governments. Instead of a centralized administrative system, we need to build a framework of autonomous or decentralized finance.
- How do you view the administrative integration issue?
△It is absolutely necessary. Discussion of administrative integration that includes not only metropolitan bodies but also basic local governments should begin in earnest. Not only Jeonnam and Gwangju but other areas too need to actively pursue integration. Right now, even county-level local governments with populations of only 20,000 to 30,000 maintain independent mayors and county governors, councils, civil servant organizations, and public facilities as they are. If populations decline while administrative organizations remain the same, only inefficiency grows. It is desirable to streamline the administrative system and invest the resources saved into resident welfare and regional development. Local administration should be centered on daily life and economic activity.
