BUSAN — Busan, Ulsan and Gyeongsangnam Province will build a new mega-regional economy to rival the capital area, centered on four industries: shipbuilding and shipping, future mobility, aerospace and defense, and next-generation nuclear power and energy.
The Busan Metropolitan Government said on the 26th that four sectors were selected as growth engines for the southeastern region at a meeting of the Central-Local Government Cooperation Council: advanced shipbuilding and shipping, future mobility innovative manufacturing, aerospace and defense, and next-generation nuclear power and energy.
The three local governments have jointly identified candidate growth engines since the second half of last year and discussed them with the central government, weighing local industrial strengths, growth potential and alignment with national strategy. The final selection is expected to accelerate an industrial transition that combines the region's existing manufacturing competitiveness with advanced technologies such as artificial intelligence.
The three areas have a combined population of about 7.54 million and gross regional domestic product of 366 trillion won ($254 billion), and account for roughly 20% of the country's manufacturing output, making it the largest manufacturing cluster in South Korea. Anchor companies, suppliers, universities, research institutes and innovation agencies tied to the four growth engines are already concentrated there, providing a base for the transition.
The region's sector-by-sector standing is dominant. It accounts for 79.9% of national shipbuilding output, 76.4% of value added and 75.9% of employment in the sector. In autos, it accounts for 34.4% of shipments and 30.2% of value added, the highest outside the capital area. In aerospace, its shares of output, value added and employment are 62.3%, 65% and 51%, respectively, ranking first nationwide. In defense, it accounts for 57.5% of sales, 48% of headquarters, 43.3% of plants and 38.8% of research centers. In energy, it accounts for 48.1% of output and 48.9% of value added.
The three areas will also divide roles. Busan will serve as a testbed and industrial hub supporting technological upgrades and the AI transformation of the region's main industries, drawing on its small and mid-sized manufacturing supply chain, port and logistics infrastructure, universities and young workforce, and its capabilities in information and communications technology and digital research and development.
Ulsan will be developed as a core manufacturing base for testing advanced technologies on the factory floor, using large-scale production facilities in shipbuilding and autos, global anchor companies and an industrial value chain running from materials and parts to finished products.
Gyeongsangnam Province plans to become a strategic manufacturing base leading advanced manufacturing technology and ultra-precision machining and process innovation, combining its position as an aerospace and defense cluster with a foundation in machinery, metals and shipbuilding.
The Busan-Ulsan-Gyeongnam Mega-Regional Economic Alliance Task Force, launched this year, will draw up detailed development plans for the four growth engines within the year. It will identify core tasks together with anchor companies, including building industrial ecosystems, training talent, promoting startups and commercialization, and will step up cross-regional cooperation to attract corporate investment and upgrade industry.
The three areas will also make active use of the central government's "mega special zone" designation and its seven-part policy support package covering fiscal, financial, tax, regulatory, talent, technology and infrastructure measures. Through these, they plan to identify and pursue large cross-regional projects with wide ripple effects across the southeastern region.
The development plans will also be linked to the mega-regional development plan under the Special Act on Local Autonomy, Decentralization and Balanced Growth, as well as to the comprehensive plan for the regional era.
The mayors and governor of the three areas said the selection "is an important turning point at which the southeastern region moves beyond an industrial structure centered on the capital area alone and emerges as a new growth axis for South Korea." They added, "As one team, we will lead a manufacturing AI transformation in our main industries with a decisive edge and speed, and mobilize all our capabilities to complete a globally competitive mega-regional economic hub in the southern part of the country."
