[Editorial] Learn from the Case of Hwaseong City to Ease Concentration in the Capital Region

South Korea is a republic of the capital region. 50.7% of the total population lives in the capital region, which accounts for only 12% of the national land area. The headquarters of 27 out of the top 30 companies are located in the capital region, and 58.5% of jobs and 52.5% of the total GDP are concentrated there. Even Gyeonggi Province, part of the capital region, is projected to have 30 out of 31 cities and counties, excluding Hwaseong City, become high-risk areas for population extinction by 2067.

What needs to be noted here is 'excluding Hwaseong City.' Why is 'Hwaseong City' an exception to the threat of regional extinction that has swept the nation? If there is a place to look at to ease the concentration in the capital region and find regional vitality, it is undoubtedly Hwaseong City.

Hwaseong City has grown not as a bedroom community of Seoul but with its own momentum. As of 2023, the population of Hwaseong City is 920,000, growing about fivefold from 180,000 in 2000. This is not just due to population influx but the result of the circulation and expansion of economy, infrastructure, and human capital. Since the 1990s, manufacturing industries have gathered around major companies like Samsung Electronics, Hyundai Motor, and Kia in Hwaseong City, with the number of manufacturing businesses growing from about 10,000 in 2010 to about 28,000 in 2022, and the baton of mass-created manufacturing jobs has been passed to service jobs.

As a result, as of the first half of 2024, the economically active population of Hwaseong City is about 563,000, with 547,000 employed, recording an employment rate of 97.2%. Meanwhile, the newly constructed Dongtan New Town has accelerated population influx by supplying large-scale new apartments favored by the younger generation. Like the theory of Karl Gunnar Myrdal, which led to the reversal of Sweden's birth rate, job growth has led to infrastructure development, which in turn has led to population growth, as demonstrated here.

The tip to be gained from Hwaseong City is clear. First, the key is to distribute quality jobs to non-capital regions. To achieve this, substantial support measures such as bold regulatory exemptions and tax and fiscal incentives must be backed to make companies want to relocate to these regions. To secure the workforce, the biggest concern for companies, a good living environment, including housing, hospitals, and schools, must be prioritized, and package incentives such as housing, child education, and transportation support should be provided to relocated workers. Especially since there are many regions without anchor companies like Hwaseong City, a mega sandbox that lifts regulations all at once in specific areas and tailored regional support measures such as attracting industrial clusters are needed.

Second, selection and concentration. Young people are not reluctant to move to the provinces if the conditions are met. According to a recent survey, 41.2% of young people in their 20s and 30s in the capital region said they would be willing to move to the provinces if living conditions equivalent to those in the capital region are provided.

However, it is difficult to provide balanced jobs and living conditions in all regions due to limited resources. Therefore, it is realistic to focus on nurturing one or two hub cities with established population and economic bases. By linking surrounding areas to hub cities to improve the quality of life for the entire region, the strategy is to succeed in a few strategic hubs first and then expand to other regions. Among the non-capital regions, areas like Daejeon and Busan, which have evenly well-established income levels, industrial bases, and living conditions, can be candidates.

Third, a consistent implementation system. To consistently promote the development of hub areas in the mid to long term, a systematic implementation base combining financial and administrative capabilities is needed. Establishing a dedicated public-private partnership organization involving the government, local governments, local companies, and universities can be a good option. In particular, drastically expanding investment in local hub universities to nurture local talent and develop them into hubs of innovation and entrepreneurship is necessary. By establishing a cooperative system between companies, universities, and local governments to nurture talent and link jobs in the region, the outflow of talent to the capital region can be prevented.

Hwaseong City has shown this empirically. The key lies in how to design a city where 'jobs and life can coexist.' We already have valuable empirical evidence. Now is the time to act.

Joo Hyeong-hwan, Deputy Chairman of the Low Birthrate and Aging Society Committee