For the government's mega special zone system, being pursued to drive industrial growth and balanced regional development, to succeed, easing core regulations related to labor, safety, and the environment—such as flexible working hours—must be a prerequisite, observers say.
The Korea Enterprise Federation (KEF) conducted a "Corporate Survey on the Mega Special Zone System" with Mono Research, targeting 468 companies with 50 or more employees in national advanced strategic technology sectors nationwide. The results showed 66.7% of responding companies said they "have an intention to use the mega special zone system." Among them, 49.4% said they "would use it if unconventional regulatory exemptions and support measures are guaranteed."
The mega special zone system provides package benefits such as sweeping regulatory exemptions, subsidies, and tax and fiscal support to key industries in specific regions (metropolitan or super-regional). When companies and local governments apply after consultation, the government designates and supports zones through deliberation and resolution. The government is pursuing enactment of a mega special zone law within this year.
Companies cited "exemption and deferral of core labor, safety, and environmental regulations" (42.9%) as the most important policy task for the future success of the mega special zone system. This was followed by "timely government-led construction of essential industrial infrastructure such as electricity and water" (36.5%), "securing outstanding talent through industry-academia-research cooperation and supporting settlement conditions" (29.5%), and "establishing an integrated control tower and driving strong policy" (27.8%).
In particular, a majority of responding companies (50.6%) selected "flexible working hours for research and development (R&D) staff" as the most desired labor regulation exemption within mega special zones (multiple responses allowed). They viewed exceptions to the 52-hour workweek, the introduction of a white-collar exemption, and the extension of flexible and selective working hour system periods as necessary.
Other responses included "temporary deferral of the Serious Accidents Punishment Act within advanced industry demonstration zones such as robotics" (30.1%), "allowing replacement labor during strikes and restricting occupation of essential workplace facilities" (21.6%), "easing restrictions on dispatch sectors and periods" (15.0%), and "easing regulations on foreign employment (such as visa requirements for skilled professionals)" (13.7%).
Meanwhile, regarding details of fiscal, tax, and financial support measures within mega special zones, "introduction of a domestic production incentive tax" (42.1%) ranked highest. This was followed by "introduction of direct subsidies (facility investment and R&D)" (38.9%), "reduction of inheritance and gift taxes for companies relocating to or founded in zones" (31.0%), "reduction of income tax for all workers within zones and housing acquisition tax" (22.6%), and "investment support such as the National Growth Fund and preferential loan rates" (14.1%).
As the region where they hope to invest or move in the future, the "capital area (Seoul, Incheon, Gyeonggi)" (45.7%) was selected most often. It was followed by the "Chungcheong area (Daejeon, Sejong, North Chungcheong, South Chungcheong)" (26.3%), the "Southeast area (Busan, Ulsan, South Gyeongsang)" (18.6%), the "Honam area (Gwangju, North Jeolla, South Jeolla)" (13.5%), and the "Daegu-Gyeongbuk area (Daegu, North Gyeongsang)" (10.0%).
Lee Dong-geun, standing vice chairman of the KEF, stressed: "For mega special zones to become a new growth solution for our companies, which are at a survival crossroads amid the upheaval of the artificial intelligence (AI) great transformation, bold regulatory reform and unprecedented support measures that can offset the preference for and concentration in the capital area must be prepared." He added, "I hope mega special zones become a starting point for an innovation ecosystem that brings a new wind to the Korean economy as a 'regulation-free zone.'"
