City focus: Seoul

Business Chief explores South Korea’s capital city, and the ongoing balancing act between its role as an economic powerhouse and ongoing efforts to provide a greener, more sustainable future for its occupants.

The capital and largest metropolis in South Korea, Seoul is one of the most powerful metropolitan economies in the world. The annual revenue of the public companies headquartered there is just short of US$1.5trn, the fourth-highest of any city worldwide. In 2019, the population of Seoul proper (known as Seoul Special City) was over 9.6mn, a 0.01% decrease from the previous year, and the total metropolitan area is home to more than 25.6mn people. Seoul's population density is almost double that of New York City, four times higher than Los Angeles and eight times higher than the density of Rome. More than half the population of country lives in and around Seoul. In many senses, the city is South Korea. 

This month, Business Chief is exploring South Korea’s capital, and its ongoing balancing act between its role as an economic powerhouse and the ongoing efforts to provide a greener, more sustainable future for its occupants. 

A breath of fresh air

As with every megacity, high population density, vast numbers of cars (in excess of 23mn with fewer than 60,000 being electric) and large manufacturing capabilities mean that Seoul has to contend with the pressing issue of air pollution. While air quality in the city has improved dramatically over the past two decades, levels of fine dust in the city’s air supply are still “twice as high as other developed countries and the number of days with high concentrations of fine dust has been increasing,” writes Tae Yong Jung, a researcher at Yonsei University in Seoul. 

In response to the growing need for clean air solutions, President Moon Jae-in’s administration officially established the National Council on Climate and Air Quality (NCCA) in April 2019. Led by former United Nations Secretary-General Ban Ki-moon, the NCCA’s goal is to work with neighbouring countries to find solutions to the issue, which the nation’s national assembly categorised as “a social disaster.” 

In addition to placing restrictions on coal-powered electricity and old diesel vehicles, South Korea is actively working to increase the number of electric and hydrogen-powered vehicles on its roads. The country’s environmental ministry is working to deliver a hydrogen-powered bus project in seven cities, including Seoul. It also plans to boost the number of green cars in South Korea to 500,000 units, including 430,000 units of electric vehicles and 67,000 units of hydrogen-powered cars, by 2022, Business Korea reports. 

The balancing act 

In addition to its climate challenges, South Korea is facing challenges of an economic nature. In 2019, the country experienced the worst two year period of economic growth since the mid-20th Century. Thrown into uncertain territory by a downturn in the global microchip market and ongoing trade disputes between Washinton and Beijing, the country is fighting back with a $51.2bn stimulus package aimed at bolstering national infrastructure, representing a 12% increase in spending on public institutions. Reportedly, the bulk of the money is being set aside for infrastructure building and housing construction, in response to house prices in Seoul hitting an all time high in December of 2019. 

Samsung Electronics, the largest company in the country and the world’s largest manufacturer of electronic goods, has its headquarters in Seoul. In 2019, the company reported sales in excess of $221bn and controls more than $304.1bn worth of assets. 

Korea’s total exports fell by 10.3% in 2019 to $542.4bn after reaching a record high in the previous year, due to the US-China trade dispute, Japan's restrictions on exports, Brexit, and Hong Kong protests. As the country enters 2020, market experts are reportedly optimistic, buoyed by a rally in the price of microchips and electronic goods, as well as the government’s economic support and efforts to reduce income inequality. 

Underground growth 

The meeting point between economic stimulus and sustainable strategy in Seoul is taking place in the city’s startup scene. One prime example of this synergy is currently taking root beneath the city’s streets. 

Over the past 12 months, subterranean vegetable farms have begun cropping up at subway stations across Seoul. The project is a collaboration between Seoul Metro and agricultural startup Farm8 with the goal of utilising vacant spaces beneath the city and diversifying the subway operator's revenue sources.

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Using hydroponic farming techniques - which reduce water wastage and ensure that crops are grown quickly year-round - Farm8 plans to cultivate “some 30 types of vegetables, including varieties of lettuce, basil and edible flowers” in a 200 square meter cultivation room. According to the Nikkei Asian Review, Farm8 plans to harvest between 30 and 40 kg of vegetables every day for sale in adjoining cafes and local restaurants. 

Next generation innovation 

Seoul, like many large cities, is abuzz with young, innovative firms looking to make their mark on the global economy. Primarily tech driven, local startups are focusing on developing smart city initiatives to benefit the lives and businesses of the city’s population. At this year’s Consumer Electronics Show (CES) in Las Vegas, the Seoul Business Pavillion played host to 20 “homegrown startups,” as well as demonstrations of the municipal government’s own smart city initiatives.