A dramatic turnaround begins with infrastructure

Kim Sung-jae

The author is a business administration professor at Furman University and the author of “The Story of Tariffs” (2025). 

The election of Abraham Lincoln, the Republican candidate who campaigned on abolishing slavery, in November 1860 amounted to a death sentence for the economy of the U.S. South, which depended on slave labor and agricultural exports.

Eleven Southern states opposed Lincoln's policies and withdrew from the Union within a month. The ensuing American Civil War (1861-65) ended in victory for the North. During the conflict, Union forces burned Southern industrial centers and destroyed railroads.

Economic leadership subsequently shifted to the North, where a solid industrial base supported manufacturing growth, while the South fell into a prolonged period of economic stagnation. In 1938, President Franklin D. Roosevelt described the South's dire economic condition as “the nation's No. 1 economic problem.”

Although the region possessed abundant natural resources and considerable growth potential, inadequate infrastructure kept it trapped in poverty. Roosevelt responded by establishing the Tennessee Valley Authority, or TVA, which launched a sweeping national development project centered on more than 20 dams near the Appalachian Mountains. Through hydropower generation and environmental restoration, the TVA laid the foundation for industrialization. Nuclear power plants built in later decades further strengthened the South's energy base.

The interstate highway system constructed during the 1950s also transformed the region. Interstate 85 became a major north-south corridor linking the logistics hubs of Charlotte and Atlanta while improving access to the ports of Charleston and Savannah.

As energy and transportation infrastructure improved, companies burdened by rising costs relocated to the South. Traditional manufacturers were joined by aerospace and automobile companies. Foreign firms investing in the United States also established production bases there, attracted by state tax incentives and flexible labor relations.

In the 21st century, the South has emerged as one of America's fastest-growing regions, with clusters spanning EVs, batteries, aerospace, defense, biotechnology, information technology, semiconductors and AI. It has also become the country's fastest-growing destination for new residents.

The South's remarkable transformation offers lessons for Korea, which now faces persistent regional imbalance and slowing growth. The government is pursuing megaprojects worth hundreds of trillions of won in the relatively less-developed southwestern region. The vision is to capitalize on abundant nuclear-generated electricity to build world-class semiconductor and AI infrastructure, reshaping the national economy into an advanced industrial value chain, much as the TVA reshaped the American South.

The remaining challenge is logistics, education and financial infrastructure. The American South attracted investment through extensive highways, leading universities, sophisticated financial systems and competitive tax incentives. For southwestern Korea's development strategy to succeed, comprehensive infrastructure must be built quickly. Geography is not destiny. With the right infrastructure, even a lagging region can become a dynamic one.