South Korea’s Smart City Infrastructure Leading Global Urban Technology Innovation
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Global Expansion of South Korean Smart City Technology
As of the end of 2025, South Korea’s smart city technology is setting new standards in the global urban infrastructure market, experiencing rapid growth. The global smart city market is projected to grow from $120 billion in 2025 to $250 billion by 2030, with an average annual growth rate of 15.8%. During this period, the market share of Korean companies is expected to expand from 12% to 18%. Notably, South Korea’s integrated platform technology and 5G-based IoT solutions are being adopted as core infrastructure in regions such as the Middle East, Southeast Asia, and South America, resulting in a 47% increase in overseas orders for Korean smart city companies compared to 2024.
The success of the K-City Network initiative promoted by the South Korean government is a key driver of this growth. The autonomous bus operation system in Sejong City and the integrated energy management platform in Busan Eco Delta City have been recognized for their demonstrative achievements, leading to the preferential adoption of Korean technology in Saudi Arabia’s NEOM City and Singapore’s Tengah Smart Town projects. Samsung SDS (South Korea) recorded overseas smart city project orders worth 850 billion won in the first half of this year alone, a 62% increase compared to the same period last year.
The competitiveness of Korean companies in the urban infrastructure market is particularly prominent in integrated platform technology. Unlike the traditional approach of providing individual solutions, Korean companies offer a one-stop integrated management system encompassing transportation, energy, safety, and environment. The CityHub platform developed by LG CNS (South Korea) can manage over 30 city services through a single interface, demonstrating an average 25% reduction in operating costs. This integrated approach offers a 40% reduction in construction time compared to the combination of individual solutions provided by IBM (New York) or Siemens (Munich).
Market Leadership in 5G and AI Convergence Technology
The expertise of South Korean telecom companies in 5G infrastructure is a core competitive advantage in exporting smart city technology. SK Telecom (South Korea) has established integrated traffic management systems in Ho Chi Minh City, Vietnam, and Kuala Lumpur, Malaysia, using its independently developed 5G SA (Standalone) based smart city solution, achieving a 35% reduction in real-time traffic congestion. This demonstrates a performance superiority of over 10 times in data processing speed compared to the 4G-based solutions provided by Huawei (Shenzhen) or Ericsson (Stockholm).
In the application of artificial intelligence technology to urban infrastructure, South Korean companies are showcasing unique approaches. The AI-based urban safety platform developed by Hanwha Systems (South Korea) predicts and responds to fires, traffic accidents, and crime situations in real-time through CCTV video analysis, a system that the Singapore government has decided to implement nationwide. This system achieves a 97.3% accuracy in incident prediction by utilizing existing CCTV infrastructure while adding AI chipsets, a figure 15% higher than solutions from Palantir (Denver) or BT (London).
In the domain of integrated urban data management, the achievements of POSCO DX (South Korea) are noteworthy. POSCO DX has applied its large-scale data processing technology, accumulated from steel mill operations, to urban infrastructure, improving the operational efficiency of water and sewage facilities by 43% in Mumbai, India, and Jakarta, Indonesia. Particularly, through predictive maintenance systems, it has reduced equipment failure rates by 78%, proving its differentiated technological prowess compared to traditional water service providers like Veolia (Paris) or Severn Trent (Coventry).
Another strength of South Korean smart city technology is its energy efficiency and environmental sustainability. The microgrid system jointly developed by Korea Electric Power Corporation (South Korea) and Samsung C&T (South Korea) efficiently integrates renewable energy sources such as solar and wind into the urban power grid, achieving an average 28% reduction in total power consumption. This technology has been applied in Masdar City, Abu Dhabi, and Lusail City, Doha, achieving annual carbon emission reductions of 1.5 million tons and 2 million tons, respectively. This demonstrates 15-20% higher energy efficiency compared to solutions from Siemens Energy (Munich) or GE Renewable Energy (Boston).
In the convergence of autonomous driving technology and urban transportation infrastructure, South Korean companies are playing a leading role. The autonomous shuttle operation system jointly developed by Hyundai Motor (South Korea) and Naver (South Korea) has been commercialized in Sejong City, and urban transportation solutions based on this technology are being piloted in Singapore and Tallinn, Estonia. This system achieves a 45% reduction in operating costs compared to existing public transportation while achieving a 92% passenger satisfaction rate, competing with the practicality of technologies from Waymo (California) or Baidu Apollo (Beijing).
From an investment perspective, the financial performance of South Korean smart city companies is also impressive. Samsung SDS recorded a 38% year-on-year increase in smart city division sales in the third quarter of 2025, reaching 1.24 trillion won, with an improvement in operating profit margin from 12.8% to 15.4%. LG CNS also sees its overseas smart city projects accounting for 34% of total sales, raising its overall sales target for 2025 by 15% compared to the original plan. For SK Telecom, revenue from 5G-based B2B solutions increased by 52% year-on-year, securing growth momentum in new business areas beyond telecommunications services.
However, challenges also exist for South Korean smart city companies. The adaptation costs due to differences in local regulations and standards in global projects are increasing. Due to the EU’s GDPR (General Data Protection Regulation) and the strengthening of cybersecurity regulations in the US, the localization costs of data processing systems account for 15-20% of the total project cost. Additionally, South Korean companies face pressure to continuously develop differentiated value propositions amidst the low-cost competition from Chinese companies and the technology standard leadership competition from US companies.
Concerns about cybersecurity and data privacy also pose potential risk factors for the expansion of South Korean smart city technology. With the increase in cyberattacks targeting smart city infrastructure in recent years, governments worldwide are strengthening security requirements for critical infrastructure. While South Korean companies are enhancing their cybersecurity capabilities in response, additional investment and partnership building are needed to compete with specialized security companies like Check Point (Tel Aviv) or CrowdStrike (Texas) in the global market.
Securing technology standardization and interoperability is also emerging as an important challenge. As smart city projects in different countries adopt different technology standards, this could act as a constraint on the global expansion of solutions developed by South Korean companies. In response, the South Korean government and companies are strengthening their activities in international standardization organizations such as ISO (International Organization for Standardization) and ITU (International Telecommunication Union), particularly striving to play a leading role in establishing 5G-based smart city standards.
The acquisition of talent and the sustainability of technological innovation also impact the long-term competitiveness of the South Korean smart city industry. Due to a shortage of experts in AI, IoT, and big data fields, major companies are actively pursuing salary increases and recruiting overseas talent. Samsung SDS has increased its hiring of AI experts by 80% compared to last year, and LG CNS is establishing R&D centers in India and Vietnam to leverage local talent.
Looking ahead, the global expansion of South Korean smart city technology is expected to enter a new phase through the application of metaverse and digital twin technologies to urban infrastructure. The urban metaverse platforms being developed by Naver and Kakao (South Korea) are anticipated to advance the existing smart city concept by providing an environment where citizens can access administrative services and participate in urban planning within a virtual space. Based on such technological innovations, the South Korean smart city market is projected to grow at an average annual rate of 18% until 2030, potentially expanding its global market share to 25%. For investors, leading companies in this field offer attractive investment opportunities with long-term stable growth and profitability.
*This content is intended for informational purposes only and is not a solicitation for investment. Investment decisions should be made based on individual judgment and responsibility.*
