The history of South Korea's industrialization can be summed up in the name Ulsan. The city has been a leader in automobile manufacturing, shipbuilding, and the petrochemical industry. As South Korea transitioned from a poor agricultural nation to one of the world's top ten economies, Ulsan has always been at the forefront of industrialization.
However, the AI era presents new challenges for Ulsan. Cars are evolving into autonomous vehicles, and shipyards are transforming into smart facilities operated by AI and robots. Factories are becoming spaces where data is more critical than human experience.
Kim Sang-wook, the newly elected mayor, has declared his intention to make Ulsan the "capital of AI-driven manufacturing innovation." His vision is to transform Ulsan from a manufacturing city into a hub for AI industrialization.
The question remains: Can Ulsan, which led South Korea's industrialization, also spearhead its AI industrialization?
Ulsan, the capital of industrialization, can it become the capital of AI industrialization?
The global industrial landscape is shifting. In the past, cheap labor was a competitive advantage. Later, capital and technology became the key factors. Now, in the AI era, data and algorithms are determining the future of companies. Automakers are no longer just car manufacturers, and shipyards are evolving beyond mere boat production. The extent to which companies utilize AI is changing their value and the fate of cities.
Ulsan symbolizes South Korea's manufacturing prowess. The industrial ecosystem created by Hyundai Motor, HD Hyundai Heavy Industries, SK, and S-OIL is among the largest in the world. However, the challenge is that past successes do not guarantee future achievements. The global automotive industry is shifting towards software competition led by Tesla and BYD, while shipbuilding is transitioning to digital twin and AI design competitions.
This is why Mayor Kim has made industrial AX (AI transformation) a central pledge. He believes Ulsan's competitiveness lies not in abandoning manufacturing but in evolving it through AI. He aims to position Ulsan as the capital of AI-driven manufacturing innovation in conjunction with the Busan-Ulsan-Gyeongnam Megacity. This strategy emphasizes integrating existing world-class manufacturing with AI rather than creating new industries.
Even in the AI era, manufacturing is likely to remain a key driver of South Korea's economy, though the nature of factories will change. While past factories centered around machinery, future factories will focus on data. If Ulsan adapts to this change first, it could serve as a model for the future of South Korean manufacturing.
Can Hyundai Motor and HD Hyundai become leaders in the AI revolution?
When people think of AI, they often think of ChatGPT and semiconductors. However, the most significant changes in the next decade are likely to occur in manufacturing. We are entering an era of physical AI, where AI observes and makes decisions, and robots take action.
Hyundai Motor is already transforming from an automobile company into a mobility platform enterprise. The company is making substantial investments in autonomous driving, software-centric vehicles, robotics, and future mobility. Cars are now becoming massive mobile computers, where software is more critical than engines.
HD Hyundai Heavy Industries is also preparing for change. Future shipyards are expected to become smart facilities where AI is involved in design, production, and maintenance. AI can reduce ship design time, minimize production errors, and enhance fuel efficiency. While skilled workers' experience was once a competitive edge, the ability to leverage data and AI will become the new advantage.
Ulsan's true strength lies in this unique position. While cities like Seoul or Pangyo can develop AI software, few cities possess global manufacturing giants like Hyundai Motor and HD Hyundai. Ulsan is a vast laboratory for applying AI in real industrial settings.
Recently, the government has also been promoting policies to develop industrial complexes as AI transformation hubs. This is based on the belief that AI transformation across the industry is essential to maintain manufacturing competitiveness.
Ultimately, Ulsan's future lies not in creating new industries but in successfully integrating AI into its existing sectors of automotive, shipbuilding, and petrochemicals. AI can be seen not as a threat to Ulsan's manufacturing but as an opportunity to elevate it back to the global forefront.
As the AI industry develops, one critical factor becomes increasingly important: energy.
Data centers consume vast amounts of electricity, and AI factories are no different. Autonomous vehicles, robots, and smart factories also require significant energy. Consequently, the world is engaged in both AI and energy competition.
Ulsan holds a unique position in this regard. It has South Korea's largest petrochemical complex, established hydrogen economy infrastructure, and robust port and logistics systems. The city integrates manufacturing, energy, and logistics.
This is why Mayor Kim emphasizes building a Northeast Asia energy logistics hub. In the AI era, industrial competitiveness will be determined not only by production capacity but also by stable energy supply capabilities. Ulsan has the potential to become a hub for the hydrogen industry and energy transition.
Hydrogen is particularly a field that Ulsan should focus on. As the AI industry grows, electricity demand will surge. Renewable energy and the hydrogen economy are not merely environmental policies but are becoming industrial strategies for the AI era. Just as Ulsan grew through the petrochemical industry in the past, it has the potential to transform into a new industrial city combining hydrogen, AI, energy, and data in the future. The competitiveness of Ulsan, where manufacturing and energy converge, is bound to increase.
The Busan-Ulsan-Gyeongnam Megacity may represent Ulsan's last opportunity.
The AI era is not one where individual cities compete; it is an era of regional competition.
The strength of the capital region is not solely due to Seoul. It is because Seoul, Gyeonggi, and Incheon form a massive economic zone.
This is also why Mayor Kim is actively promoting the Busan-Ulsan-Gyeongnam Megacity. Busan excels in ports and finance, Gyeongnam is strong in machinery and aerospace, and Ulsan is robust in manufacturing and energy. If these three regions connect, a new growth axis that can rival the capital region could emerge.
The AI industry requires talent, capital, and data simultaneously. Ulsan alone has its limitations. However, if Busan-Ulsan-Gyeongnam operates as a single economic zone, the situation changes. Ulsan's competition is no longer with Busan or Changwon but with global industrial cities like Nagoya, Shanghai, and Houston. To compete with these world-class industrial cities, a larger economic zone and broader market are necessary.
The future of Ulsan in the AI era ultimately depends on connectivity: the integration of manufacturing and AI, energy and data, and the connection between Ulsan and Busan-Gyeongnam.
Ulsan initiated South Korea's industrialization.
But we cannot guarantee that the formula for success in industrialization will apply in the AI era. The automotive, shipbuilding, and petrochemical sectors are all facing the monumental change brought by AI.
Mayor Kim's four years will not simply be about governance. It will be a test of whether Ulsan can transition from the capital of the industrialization era to the capital of the AI industrialization era. If Ulsan can create new competitiveness by integrating AI without abandoning manufacturing, it can once again become a leading city in South Korea's economy.
South Korea's industrialization began in Ulsan.
Can Ulsan also lead the way in AI industrialization?
The answer to this question will determine Ulsan's future over the next four years.
:Kim Sang-wook, Ulsan's Mayor-elect: Kim Sang-wook is a politician with a background in law, having served as a member of the National Assembly before being elected as Ulsan's mayor. During his campaign, he emphasized key pledges including industrial AX (AI transformation), fostering future mobility industries, establishing a Northeast Asia energy logistics hub, and promoting the Busan-Ulsan-Gyeongnam Megacity. He has consistently stressed the importance of enhancing the competitiveness of the automotive, shipbuilding, and petrochemical industries through AI integration rather than abandoning existing manufacturing. Additionally, he has promised to focus on breaking down vested interests, innovating governance, and revitalizing the local economy as major tasks for Ulsan's transformation.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.