Digital Valley Replacing Rusty Town

Digital Valley Replacing Rusty Town

Nov 25, 2005

W1.8 Trillion to Be Invested to Convert Seoul¡¯s Kuro Industrial Park

Shedding off the old image of rusty factories, Seoul Digital Industrial Complex is revamping itself as the main information technology cluster of South Korea with an influx of IT companies and massive investment from the government.

The Korea Institute for Industrial Economics and Technology (KIET) on Wednesday announced its plan to invest 1.8 trillion won in the complex, long known as Kuro Industrial Complex, in order to foster it as a cluster of high-tech IT firms and fashion industries.

According to the plan, the 1.9-square-kilometer complex in southwestern Seoul will be back by research & development (R&D) centers and living and shopping quarters by 2009. The area is already hosting 4,648 small- and medium-sized businesses in 45 buildings.

"We expect that the restructuring project will bring an economic effect of 4 trillion won, and will create some 50,000 jobs," chief researcher of the KIET Hong Jin-ki said at a conference held at the National Assembly Library in Yoido, Seoul. "If the project goes according to plan, Seoul Digital Complex will be a leading IT cluster in the world in four to 10 years."

The Kuro area, located along the subway line 2 in Kuro-dong and Kasan-dong, was first designated by Park Chung-hee regime back in 1965 as the first national industrial complex in an effort to promote exports of clothing and machineries.

While most of the old factories have moved out looking for cheaper labor, the Kuro complex began to be filled with high-tech IT firms from late ¡®90s.

Most recently, one of leading computer game companies CJ Internet moved into Daeryung Post Tower II in Kasan-dong earlier this month, leaving their old office building in Samsong-dong, southern Seoul, so-called Teheran Valley.

"It is hard to calculate how much money we are saving, but we are receiving some benefits from the district office," said the company¡¯s public relations manager Lee Sun-hee.

Thanks to the tax benefit and infrastructure given to the government-designated industrial complex, the number of companies in Seoul Digital Valley has grown exponentially, from 712 in 2000, to 3,048 in 2004 and 4,648 in this September. Around 43 percent of them are non-manufacturing firms such as IT and fashion retailers, while 27 percent are electric and electronics firms and 14 percent are machinery manufacturers.

Instead of the low and flat factories of the old days, there are now 45 apartment-type industrial buildings in the complex and eleven more are under construction. Most of the new buildings are about 15 to 20 stories high, and they host around 100 small- and medium-sized firms respectively. Under the current law, companies with manufacturing or R&D facilities are only allowed in the buildings.

Old textile and clothing factories nearby are also converted to multistory shopping centers and fashion outlets, including a bunch of global brands such as Nike, Adidas and Levis.

The local district offices have helped the complex revamp its image by changing the names of the subway stations. Kuro Kongdan (Kuro Industrial Complex) is now called Kuro Digital Complex, and Karibong was changed to Kasan Digital Complex.