The Distribution and Characteristics of Regional Innovation Growth Capacity in Korea

This study explores regional innovation capacity in South Korea, which is currently grappling with a demographic time-bomb, a slowing economy, and worsening inequality between the country’s provincial regions and the Seoul Capital Area (SCA). The concentration of high-value industries in the SCA exacerbates regional disparities as young workers migrate from the provinces in droves, accelerating the graying of regional populations and forcing many provincial localities to confront the reality of local extinction. For this work, I examine the critical role played by innovation as the fuel of a virtuous economic cycle and key driver of regional economic growth and job creation. The analysis produces evidence of significant disparities in regional innovation growth capacity, especially between the SCA and Daejeon - Korea’s two innovation capitals - and the rest of the country. The study carries the following implications for policy. First, the government should work with Korea’s provincial regions to build an economic environment conducive to innovation, beginning with supporting good educational opportunities for local youth. Second, Korea needs to facilitiate technology transfers and knowledge sharing to support startups. It should also work to establish innovation hubs that can help bridge the gap between R&D and bringing products to market. Finally, investing in education, R&D infrastructure, and entrepreneurship policies is essential to stimulating local economic growth.