author : Hwiseok Kim (Research Center for Balanced National Developmet)


The gap between the metropolitan areas and local areas in terms of income and social infrastructure has been the major bottleneck that inhibits sociali ntegration and economic development. The majority of various resources, such as financial and human ones, have been concentrated on the metropolitan areas in the process of rapid economic growth in Korea. The metropolitan areas held 47 percent of total population, produced 47 percent of gross domestic products, had 57 percent of manufacturing firms, and earned 59 percent of local tax revenues in the year 2001.
The key to this imbalance seems to be the focused investment of limited national resources into a few chosen areas, mostly metropolitan areas, which have the potential to yield successful results within a short period of time. This efficiency-seeking behavior is a natural course of action, being found in several developing countries. What the previous governments have neglected is the gradual dispersion of productive resources into various regions as the economic size of the nation has expanded. The previous governments, of course, did try to diversify investment into several regions, but they failed. Why?
Among other reasons, they did not consider the absorptive capacity of the region when they invested financial resources within. Without building up an innovative milieu, simply pouring monetary resources into a certain region in itself does not produce fruitful results. Recognizing the importance of the innovative capacity of a region, the current Participative Administration focuses on the construction of regional innovation systems in formulating its policy for balanced national development. Thus, the core of the policy is to construct regional innovation systems as a key vehicle in promoting regionally specialized industries.