Busan’s AI Hub Vision: Grand Promises, But Where Is the Strategy?

BUSAN, South Korea – The city of Busan has unveiled an ambitious plan to establish itself as a global artificial intelligence (AI) hub, promising to integrate AI across industries, governance, and urban life. With 487.7 billion KRW in government funding and an expected 758.7 billion KRW in private investment over the next five years, city officials have presented a vision of AI-powered innovation that will transform manufacturing, logistics, healthcare, and public administration.

At first glance, the initiative appears to be a forward-thinking effort to modernize South Korea’s second-largest city and compete with global AI centers. However, beneath the grand rhetoric lies a plan that lacks clear execution, measurable benchmarks, and an industry-driven foundation. The risk is that Busan’s AI hub vision will follow the same path as previous government-led smart city initiatives—projects that attracted attention but ultimately struggled to deliver tangible outcomes.

The announcement is heavy on buzzwords but light on specifics. Phrases such as "AI-driven industry transformation", "smart governance through AI", and "AI-powered citizen services" are repeated throughout the strategy, yet concrete policies, industry partnerships, and implementation roadmaps remain unclear. While officials emphasize AI’s role in making governance more "scientific and efficient," they fail to address the fundamental questions: 

How will these AI policies be implemented? Who will oversee them? What mechanisms will ensure they actually improve services rather than create more bureaucratic layers?

A major component of the initiative is the integration of AI into public administration, including AI-based idea competitions, training programs for government employees, and AI-assisted policymaking. While the goal of increasing AI literacy among civil servants may seem forward-thinking, the strategy assumes that government employees—many of whom have no background in data science or machine learning—will be able to critically assess and manage AI-driven decisions. Without proper expertise, there is a real danger that public officials will become overly reliant on algorithmic recommendations without fully understanding the technology behind them.

This raises concerns about automation bias, a well-documented phenomenon where human decision-makers blindly trust AI-generated outcomes even when they contain errors. The Dutch welfare scandal of 2021 serves as a stark warning: an AI-driven fraud detection system falsely accused thousands of families of benefits fraud, leading to severe financial and social consequences. The bureaucrats in charge had no real understanding of how the AI model functioned and were unable to intervene when problems arose.

Busan’s strategy assumes that AI will enhance efficiency and accuracy in governance, but it does not outline clear accountability structures or safeguards to prevent similar failures. What happens when an AI-generated policy recommendation leads to unintended harm? Who is responsible when an algorithm-driven decision negatively impacts citizens? These are fundamental questions that the city’s plan fails to address.

Beyond governance, the plan also seeks to establish Busan as a center for AI-driven industries, focusing on manufacturing, logistics, and healthcare. However, the city faces a significant talent gap in AI development. Most of South Korea’s top AI professionals are concentrated in Seoul, where major tech firms like Naver, Kakao, and Samsung operate large AI research labs. Busan’s plan includes AI education and workforce training programs, but without strong career opportunities, the city risks training AI professionals only to see them leave for higher-paying jobs in Seoul or overseas.

For Busan to truly become an AI hub, it must convince AI startups and major tech companies to establish a presence in the city. However, the strategy does not detail specific incentives for attracting investment or ways to differentiate itself from Seoul’s existing AI ecosystem. Unlike Singapore, which has positioned itself as a leader in AI-driven financial technology through direct investment, regulatory support, and global AI partnerships, Busan’s plan lacks a clearly defined industry niche or a compelling reason for businesses to choose Busan over other AI hubs.

Another major component of the initiative is AI-powered smart city development, particularly through the Eco Delta City (EDC) project. AI is expected to enhance urban planning, environmental monitoring, and citizen services, turning Busan into a model for AI-driven urban management. However, past smart city experiments in South Korea, such as Songdo International Business District, serve as cautionary tales. Songdo was originally envisioned as a fully AI-powered city, but years after its completion, many of its smart systems remain unused due to lack of real-world integration and public engagement.

Is Busan’s AI initiative truly about advancing AI, or is it primarily an economic development strategy wrapped in high-tech branding? 

South Korea has a history of using futuristic technology narratives to attract investment, but many of these initiatives struggle to transition from concept to reality. If Busan’s AI hub vision relies primarily on government funding without strong industry buy-in, it risks becoming yet another underwhelming tech-driven policy that lacks meaningful long-term impact.

For Busan to avoid repeating the mistakes of past smart city initiatives, the city must move beyond vague branding and develop an actionable strategy that directly tackles the core challenges of AI adoption. Instead of relying on broad ambitions, Busan needs to clearly define measurable AI targets that establish specific milestones for implementation. A well-structured roadmap is essential, ensuring that progress can be tracked, adjusted, and aligned with real industry needs rather than serving as a promotional effort without clear outcomes.

Attracting AI startups, investors, and research institutions requires more than just the promise of government support. Busan must create tangible incentives that make it a compelling destination for AI-driven businesses. This means offering competitive financial benefits, establishing partnerships with global AI firms, and ensuring that infrastructure supports the rapid development and scaling of AI innovations. Without these elements, Busan risks becoming a city where AI is talked about extensively but not meaningfully developed or integrated into the economy.

The role of AI in governance also demands careful oversight to ensure that technology serves the public interest rather than reinforcing inefficiencies or introducing new risks. AI-driven policies must include safeguards that prioritize transparency, accountability, and public trust. Decision-making processes that involve AI should be open to public scrutiny, with clear mechanisms to prevent bias and ensure that algorithmic recommendations do not replace human judgment without oversight. Without these safeguards, AI-driven governance could create a system where automation replaces responsibility rather than enhancing decision-making quality.

Building an AI workforce requires more than just training programs; it must result in sustainable career opportunities that retain talent within Busan rather than preparing individuals for jobs that ultimately do not exist. If AI professionals continue to leave for Seoul or overseas markets where better opportunities are available, the city's education initiatives will become little more than an exercise in skill-building without economic impact. To prevent this, Busan must align AI training programs with real job opportunities, ensuring that companies investing in AI have the workforce they need while providing professionals with compelling reasons to stay in the city.

A vision without execution remains nothing more than a concept. For Busan to truly become a global AI hub, it must move beyond abstract statements and ensure that its policies, investments, and workforce strategies lead to tangible and lasting change. Without a shift toward concrete action, the city risks becoming another example of a grand technological ambition that ultimately fails to materialize into meaningful progress.