BUSAN — For Busan to secure an early lead in industries tied to the Arctic shipping route, the city should tie together corporate support, finance, regulation and international cooperation into a single implementation framework rather than compete with Arctic nations on the scale of infrastructure, a new policy report said. While a special act and local ordinances have laid a policy foundation, investment support and on-the-ground services that would drive actual corporate entry remain insufficient, the report said.
The Busan Development Institute published the report, titled "Strategies for Fostering Industries Related to the Arctic Shipping Route in Busan," on the 16th, laying out five strategic directions, six core tasks and a phased development road map through 2055. The study is a regional-level integrated policy review based on the Special Act on Promoting Use of the Arctic Shipping Route and Fostering Related Industries, which takes effect in December this year.
The report found that Busan's opportunity lies alongside its existing industrial base in shipbuilding, shipping and finance. The global market for the seven core industries linked to the Arctic route is projected to reach between 165 trillion won and as much as 700 trillion won by 2050, with a baseline scenario of 370 trillion won.
Demand for polar specialists in the Busan region is projected to rise 7.6-fold, from 605 workers in 2027 to 4,585 in 2040.
Busan's level of readiness, however, falls short of that growth potential. In the researchers' assessment of capabilities across five areas, Busan scored 16 out of 25, nine points behind Norway. A survey of 38 experts identified law and regulation as well as finance as the weakest areas. In a separate survey of 200 companies, 67.5% said they intended to enter industries related to the Arctic route, but only 15% were prepared to act on it. Facility investment costs and regulatory and environmental constraints were cited as the main barriers to entry.
The researchers concluded that the gap cannot be closed through infrastructure investment alone. The $24.59 billion the United States allocated this year for the Coast Guard through a single piece of legislation is about 66 times the 549.9 billion won in central government funding South Korea has set aside for Arctic route-related spending. The report judged that pooling policy instruments and lowering barriers to corporate entry is more realistic than competing on the scale of infrastructure. That is also why it pointed to Tromso, Norway, where regulation and services are concentrated, as a reference model for Busan.
Specific tasks proposed in the report include building a one-stop corporate support center, creating an industry-academia-research innovation cluster known as B-ArcticLab, providing structured finance and polar insurance tailored to the Arctic route, offering integrated support for polar vessel construction and Polar Code certification and consulting, enacting ordinances to foster related industries and support polar activities, and consolidating governance of the Arctic Business Network.
Among these, the one-stop support center would handle everything from providing information to matching companies, training and international cooperation through a single channel. The report proposed building it first, in conjunction with the promotion center established under the ordinance on Busan as a hub city for the Arctic shipping route, which passed the Busan Metropolitan Council in September this year. The structured finance and polar insurance measures are intended to ease the burden of facility investment and premiums through steps such as a proposal under review to create a 500 billion won regional fund covering Busan, Ulsan and South Gyeongsang Province, along with four types of polar insurance. The report also called for adding an ordinance on promoting and supporting polar activities to the existing Arctic route ordinance, so that industrial development and research and workforce training both rest on a regulatory footing.
The road map is laid out in three phases: establishing the regulatory framework from 2026 to 2029, expanding the industry from 2030 to 2035, and building a self-sustaining ecosystem from 2036 to 2055. Essential tasks such as ordinances and the support center would be pursued first, while large-scale investments such as hinterland complexes and bunkering would be decided in stages after reviewing external conditions including sanctions on Russia and changes in sea ice.
Jang Ha-yong, the senior research fellow who led the study, said competing with Arctic nations on the scale of infrastructure is not realistic. "Tying ordinances, governance, regional cooperation among Busan, Ulsan and South Gyeongsang Province, and international networks into a single implementation framework is the most realistic path for Busan, a non-Arctic city, to close the gap," Jang said.