[Editorial] A Bold Incentive Package to Spur More Corporate Investment in Regional Areas

Corporate investment appetite is expected to rise, helped by an upward trend in economic growth and the launch of three major megaprojects. In particular, the growing interest in investment outside the Seoul metropolitan area is highly encouraging. In fact, a survey of the top 500 companies by sales conducted by the Federation of Korean Industries found that 27.4% of respondents, or one in four, are considering expanding investment in non-capital regions within the next three years.
Efforts to steer corporate investment toward regional areas have been pursued countless times, but the results have been limited. Even when companies that had moved overseas returned to Korea, generous tax breaks and subsidies failed to produce much of an effect. The approach was to offer substantial tax incentives if they relocated to regional areas.
As this shows, it is difficult to achieve real results not only by trying to attract investment back into the country, but also by simply asking companies to move to regional areas. The government is emphasizing domestic investment because countries around the world are strengthening policies centered on national interests and want production facilities built at home. Beyond that, if Korea is to ease the concentration of its economy in the capital region, regional investment is essential. If companies invest in regional areas, they can strengthen national competitiveness while also promoting balanced development across the country. That would be an ideal outcome.
In that sense, the recent improvement in companies' willingness to invest in regional areas is a welcome sign. The question is whether that intent will turn into actual investment. Complex reasons that prevent companies from deciding on and carrying out regional investment must be addressed. The biggest factor in prompting new investment outside the capital region is financial support such as tax incentives and subsidies. The next priority for companies is whether the industrial ecosystem and infrastructure are well in place. That means support for supplier networks, logistics and transportation systems, and infrastructure such as power and water supply must also follow.
All of the measures used to encourage corporate investment in regional areas ultimately depend on financial support. When companies show a willingness to move south or outward on their own, the government should provide enough of an initial push to help them make the decision. If necessary, it would be worth actively considering using excess tax revenue within permissible limits. If the money companies earn and pay in taxes is then used again to stimulate their investment in regional areas, what could be a more rational virtuous cycle than that?
The government is seeking to revitalize regional economies through administrative reforms such as the '5 megaregions and 3 special zones' plan. In particular, it aims to encourage decentralized investment in advanced industries such as artificial intelligence and semiconductors, creating new growth engines for lagging regional economies. For these blueprints to generate synergy, the path must be widened so that other companies can invest in regional areas more smoothly.
Korea must seize this opportunity to counter regional decline and strengthen national competitiveness. If the country misses this moment, when one in four companies is weighing a move to regional areas, it will be difficult to secure such a chance again. Now is the time for the government to boldly open the way so that investment in new industries can move forward without delay.