Two years ago, Naver, often referred to as the Google of South Korea, announced a plan to construct a massive data center in Yongin, Gyeonggi Province, just south of Seoul.
Last week it withdrew the project worth 540 billion won ($455 million).
Some of the residents living near the site of the center opposed the plan vehemently. They argued a high-voltage transmission line would generate a harmful amount of electromagnetic waves. Some of them were concerned that cooling water would contaminate the environment.
Naver tried to persuade residents with scientific data to show the safety of the data center. It planned to bury the transmission line and vowed to take antipollution measures. But the persuasion efforts failed.
The government of Yongin looked on, letting Naver and the residents try to settle their differences on their own. Eventually, Naver gave up on the plan.
Residents are within their rights to raise issue with plans to build new facilities nearby. They also have rights to a clean environment.
But whether the data center will harm the health of residents as seriously as they feared is disputable.
A data center is a high-tech facility where information technology equipment such as computers and servers are centered. According to measurements by a research institute in December, electromagnetic fields just outside a data center were lower than those measured inside a house. Experts also say concerns about cooling water polluting the environment are invalid.
Nevertheless, scary stories based on the flimsiest of evidence prevailed. This was probably because residents were leery of the center without valid grounds.
Their vague unease could be dispelled if local authorities mediated conflicts and sought to persuade them. But the city government failed to do so.
The former Yongin mayor belonging to the opposition Liberty Korea Party induced Naver to submit a plan to build a data center in the city. Then the attitude of city authorities changed after a new mayor affiliated with the ruling Democratic Party of Korea was elected. They became indifferent to the project.
Some councilors of the ruling party reportedly joined protests against the project.
With Naver withdrawing the investment plan, the city blew a chance to secure tens of billions of won in tax revenue. However, the losses are not limited to the city.
A data center is a core facility needed to power the “fourth industrial revolution” currently led by artificial intelligence, big data, 5G mobile communication, self-driving vehicles and the like.
Global IT giants including Amazon, Google and Microsoft have set up data centers around the world, including in Korea. They have dominated the domestic cloud computing market.
Naver intended to set up the data center to counter the competition. Now the plan has gone adrift, setting back related industries.
The portal said it would search for a new site for the data center, but scary stories will likely resurface at a new site.
The important aspect to note is the government’s attitude.
Naver is not the first case of an important industrial project hobbled by the passive and vague attitude of authorities.
The new mobility business propelled by ride-hailing services is mired in conflicts with taxi drivers. However, authorities stand awkwardly by, effectively conceding the role as mediator or arbiter.
Prompted by an environmental group’s complaints, several provincial governments recently ordered steelmakers to suspend their furnaces over pollution issues related to safety valves.
Criticism mounted that the orders ignored the reality of the industry. Then, the Ministry of Environment vowed to consult with provincial governments and experts to reconsider the issue. Steelmakers are now puzzled over whether to suspend their furnaces or not.
Mediating conflicts in the private sector and setting fair and clear guidelines is among the basic roles of government. It must not neglect the functions to win the favor of voters or certain support groups.
Global competition for technological hegemony is accelerating. Once Korea falls behind, it will be almost impossible to catch up.
The government must not stand idle letting rumors drive out investments in the future.