Issue Focus

With the Coronavirus outbreak casting a shadow on the world economy, policy movement to construct smart infrastructure in preparation for the Post–Corona Era is observed in not a few countries. Korean government is not an exception and has released a plan for the ‘Korean New Deal Plan’ recently. It is beyond doubt that investment into smart infrastructure is necessary to change Korean economy into a digital and green structure. However, in consideration of worsening government budget condition, strategic investment plan to maximize the investment effect is also needed. In this study, grounded on this awareness, the notion of digital and green economy, the needs to change Korean economy into a digital and green structure, the relationship between smart infrastructure and digital and green economy was comprehensively investigated into firstly and a desirable policy direction of the Korean New Deal projects was also examined subsequently. Based on the review, the Korean New Deal plan is identified to have the following limitations. First, a majority of projects included in the plan are focused on supplying information and communication facilities without consideration of market demand, which might result in the problem of insufficiency of corrective maintenance afterwards. Second, no systematic investment plan to transform urban spaces into Smart City which is the core of digital and green economy is observed. Third, only limited impact on labor market is expected from the plan. Though one of major objectives of this plan is to create a deal of new jobs, this plan is not expected to be effective in this term as most of the projects are not appropriate to induce voluntary private investment from the market. The following policy suggestions was derived from the diagnosis above. First, redirection from the supply-oriented budget expansion into a demand-based strategic investment should be made. Priority should be put on R&D projects for future-leading technologies and related infrastructure projects. Second, segmented investment projects should be restructured into a smart infrastructure projects. For example, life-close up SOC, aged SOC, wide-area transport network and urban renovation projects which are included in this time plan should be merged into a smart infrastructure project. Public and private ‘Big’ projects that is estimated to be about 100 trillion won needs to be closely linked with the smart infrastructure project. Third, the expansion of the ‘Smart City Project’ which is already being proceeding is also needed. Many of projects included in the New Deal Plan can be consolidated into the Smart City Project. Also the functioning of the Smart City Project needs to be focused on the role of test bed where new technologies that can not be tested in the market are verified.