Gwangju unable to break ground after failing to secure local matching funds; project viability questioned

Already-operating towns struggle with vacancies — South Chungcheong facility nearly 50% empty

Lawmaker Koo Ja-keun calls for accountability over flawed selection process

A rendering of the South Chungcheong social economy innovation town [Herald DB]
A rendering of the South Chungcheong social economy innovation town [Herald DB]

A social economy innovation town project launched under former President Moon Jae-in has left 4 billion won ($2.58 million) in national funds unspent and carried over for a second consecutive year in Gwangju. With facilities already built in other regions struggling to fill vacancies, critics are calling for a reassessment of the program's viability.

According to budget settlement data submitted to People Power Party lawmaker Koo Ja-keun by the Ministry of Trade, Industry and Energy, the 4 billion won in national funds earmarked for the Gwangju social economy innovation town was first carried over from 2024 to last year due to project delays, then went unspent again last year and rolled over into this year.

The social economy innovation town program was part of Moon's 2017 presidential campaign pledge to foster "social economy innovation and growth." Launched in 2018, it aimed to create integrated hubs where regional social economy enterprises and support organizations could collaborate and network.

In 2019, the Moon administration selected six sites nationwide through a competitive application process — Gwangju, North Jeolla Province, South Gyeongsang Province, South Chungcheong Province, Daejeon and Gangwon Province. All sites except Gwangju have since completed construction.

The Ministry of Trade, Industry and Energy attributed Gwangju's delay to the city's failure to secure its required local matching funds.

The total project cost for the Gwangju facility is 26.7 billion won, comprising 12.7 billion won in national funds and 14 billion won in local government funding. Gwangju said the delay in securing local funds stemmed from procedural changes to the Gwangju Station urban regeneration innovation district plan, which pushed back the broader project timeline.

Critics argue that national funds secured through a competitive process have been effectively wasted for two consecutive years — money that could have been directed elsewhere. Gwangju says it plans to break ground before the end of the year once the plan revision process is complete, but whether construction will actually begin remains uncertain.

Questions about the program's effectiveness extend beyond Gwangju. The South Chungcheong innovation town, which has been operating since last year, has filled only about half its tenant slots, with a vacancy rate approaching 50 percent. The Gangwon innovation town, set to open in the second half of this year, recently switched to a rolling application process for prospective tenants and cut monthly rents by 30 percent to attract occupants.

"This was a project that was always going to be difficult to execute properly — I question how it ever made it through the selection process," Koo said. "Those responsible for the application review and budget allocation at the time must be held strictly accountable."


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