Daegu was once a key player in South Korea's industrialization. The textile industry symbolized Korean exports, while the machinery and metal industries supported the local economy. However, as the industrial focus shifted to the capital region and manufacturing structures changed, Daegu has faced prolonged stagnation and youth outmigration.
In the recent local elections, elected Mayor Choo Kyung-ho openly acknowledged this reality. He emphasized that Daegu's economy remains centered on small and medium-sized enterprises in the materials, parts, and equipment sectors, arguing that a 'Daegu Economic Transformation' is necessary to change the industrial structure itself. His vision is to position Daegu as a central city for AI, semiconductors, and robotics by attracting Samsung Electronics and SK Hynix semiconductor factories, Tesla's second Asian factory, and the HD Hyundai Robotics research and development campus.
The question is clear.
Can Daegu, now a latecomer in South Korea's industrialization, make a comeback in the AI era?
From a Textile City to an AI Industrial City: Daegu's Last Gamble
Daegu has long discussed the need for change. The challenge has been finding the right direction. After the decline of the textile industry, new growth drivers have not clearly emerged. Various attempts, such as developing advanced medical complexes and national industrial parks, and fostering the robotics industry, have been insufficient to alter the massive trends of concentration in the capital region and youth outmigration.
Choo Kyung-ho is proposing a different approach at this juncture. Rather than merely improving parts of the industrial structure, he aims to completely reshape the economic landscape. The core of his 'Daegu Economic Transformation' is attracting large corporations. His plan includes bringing Samsung Electronics and SK Hynix semiconductor factories, Tesla's second Asian factory, and the HD Hyundai Robotics global research and development campus to Daegu, fundamentally changing the industrial structure.
Many are questioning the feasibility of these promises. This is a valid concern. Samsung, SK Hynix, and Tesla are companies that any region would want. However, the more important issue is the direction. Mayor Choo views Daegu's problems not merely as economic stagnation but as structural issues within the industry. He believes that as long as the local economy remains centered on small and medium-sized enterprises, young talent will leave, and businesses will inevitably relocate to the capital region.
The AI era places even greater importance on economies of scale. Semiconductors, data centers, and AI research and development require substantial capital and talent. Ultimately, for Daegu to survive, a major transformation of the industrial structure is necessary, rather than small improvements. This is where Choo's gamble lies.
Semiconductors and Tesla: Daegu's Vision for New Growth Engines
The centerpiece of Choo's promises is semiconductors and future vehicles. He has stated his intention to transform Daegu from a materials and parts city into a hub for complete vehicle and semiconductor production. In particular, he aims to establish Daegu as a global semiconductor base by attracting production facilities from Samsung Electronics and SK Hynix.
Semiconductors are the rice of the AI era. Data centers, autonomous vehicles, and robots cannot exist without them. This is why countries around the world designate semiconductors as a national strategic industry. Mayor Choo claims that Daegu has abundant industrial water, stable electricity, and logistics infrastructure linked to the TK New Airport. He also highlights the talent supply capabilities through Kyungpook National University and DGIST as strengths.
Notably, the promise to attract Tesla's second Asian factory is particularly eye-catching. This is not merely about bringing in a car factory. Tesla is a company that possesses AI autonomous driving technology, battery technology, and robotics. If Tesla establishes operations in Daegu, it could foster growth not only in the automotive industry but also in the AI, robotics, and battery industries. Mayor Choo anticipates a production-induced effect of 50 trillion won and direct and indirect employment effects for 130,000 people.
However, the reality is challenging. Attracting global corporations cannot be solved solely by the will of local governments. Nevertheless, the important point is that Daegu has begun to design its future with the industrial map of the AI era at its center for the first time. The goal of industrial policy is shifting from merely attracting companies to creating an AI industrial ecosystem.
Robots and AX: Daegu's Survival Strategy for Manufacturing
Among Choo's promises, the relatively less highlighted but most realistic strategy is AX (AI Transformation). He has announced plans to promote AI transformation in Daegu's traditional industries, including textiles, machinery and metal, automotive parts, and eyewear. To this end, he proposed establishing an AX committee directly under the mayor's office and creating a 2 trillion won AX promotion fund.
In fact, Daegu's greatest asset is its existing manufacturing sector. Unlike the capital region, it does not have many platform companies, nor does it have large manufacturing companies clustered like Ulsan. However, numerous small and medium-sized manufacturers support the local economy. The challenge is that if these companies cannot adapt to the AI era, they may lose their competitiveness.
AI is no longer just a technology for large corporations. It is difficult to find areas where AI is not utilized, from production line management and quality inspection to logistics optimization and predictive maintenance. Ultimately, the future of Daegu's manufacturing lies in upgrading existing industries with AI rather than creating new ones.
The promise to attract the HD Hyundai Robotics research and development campus aligns with this perspective. Robotics is a key means of connecting AI to the real world. If semiconductors are the brain of AI, then robots are its hands and feet. Developing the robotics industry in Daegu signifies preparation for the physical AI era.
AI Administration and Citizen Participation: Transforming City Operations
Mayor Choo has also announced plans to incorporate AI into administration. He revealed plans to operate a citizen opinion collection platform using AI during the election process. This system will analyze citizens' suggestions and reflect them in policy-making.
This represents a shift in the administrative paradigm beyond mere technology adoption. In the AI era, the relationship between citizens and administration will change. In the past, officials created policies that citizens accepted; in the future, citizens' opinions can be analyzed in real-time and incorporated into policies.
Additionally, he proposed expanding the use of AI in disaster response and medical systems. The focus will shift from post-disaster recovery to preemptive prediction, and plans to establish a super-regional disaster medical hub will be pursued.
AI is not just an issue of industrial policy; it is a technology that changes the very way cities operate. For Daegu to evolve from an industrial city to an AI city, administrative innovation must also take place.
Daegu now stands at a crossroads.
Will it accept decline while reminiscing about past glories, or will it seek new growth through AI?
Mayor Choo has chosen the latter. He has made a bold bet to transform Daegu's economic structure through semiconductors, Tesla, robotics, and AX. While there may be debates about feasibility, one undeniable fact is that Daegu can no longer guarantee its future solely through existing industries.
In the AI era, competition is not between cities but between industrial ecosystems. If Daegu can create a new ecosystem centered around AI, semiconductors, and robotics, it could rise again as a pillar of South Korea's industrial map.
Ultimately, Choo Kyung-ho's four years will not just be about managing Daegu's economy; they will be about redesigning it.
:Choo Kyung-ho, Elected Mayor of Daegu:
He is a politician with a background in economic administration, having served as the first vice minister of the Ministry of Economy and Finance, head of the Office for Government Policy Coordination, and Minister of Economy and Finance. He has also served as a member of the National Assembly representing Daegu's Dalseong County. Recognized as an expert in economic policy, he campaigned with 'Daegu Economic Transformation' as his main slogan.
He has promised a structural transformation of the economy by attracting Samsung Electronics and SK Hynix semiconductor factories, Tesla's second Asian factory, and the HD Hyundai Robotics research and development campus. He also plans to promote AI transformation across industries and administration through an AI-based citizen participation platform and the establishment of an AX promotion fund.
* This article has been translated by AI.
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