author:Jin-ki Hong, Jun-Ho Jeong (Research Center for Balanced National Development)

1. Introduction
Korea has achieved spectacular economic growth based on unbalanced growth strategy, which followed the stronghold method of development. However, it came to face new issues in the process such as excessive industrial and population concentration in the Seoul Metropolitan Area (SMA), and diminishing vitality in the other provincial areas outside the SMA. Furthermore, as the industries in the provincial areas have been developed in the form of branch plants specializing in production functions under large companies, they are poorly equipped to deal with the drastically changing economic environment.
The new government that started its term in 2003 came to recognize the seriousness of this problem, and it designated balanced national development as one of the nation`s top priority tasks. Since then, it has made efforts to help the provincial areas gain economic autonomy by establishing the regional innovation system. The success of the plan to create more dynamic regions may depend on how greatly innovation can be encouraged through joint learning and efficient information exchanges based on close relationships among companies, universities and business support institutions within each region...