[Choi Jun-young's Urban Pilgrimage] The Strength and Challenges of Daegu

In 2020, Daegu instantly became a global city. As the spread of the novel coronavirus infection (COVID-19) centered around Daegu and the Gyeongbuk region progressed, the name 'Daegu' gained fame through worldwide media coverage. Although the frightening and fearful times are passing, contrary to everyone's expectations, Daegu is quietly and calmly enduring the difficult period and recovering from the shock. Even without coercive measures, people voluntarily refrained from movement to minimize the spread, and through voluntary support to help restaurants facing extreme difficulties due to decreased sales, Daegu has shown the image of a responsible community.

Continuous fearful times due to 'COVID-19'... Responsible community image
Minimizing shock through movement restrictions and voluntary sharing without coercive measures
Presence of four advanced hospitals in the city... Strong medical infrastructure plays a major role

Many people, upon seeing the news about Daegu related to COVID-19, newly recognized that Daegu is the third-largest city in South Korea. In fact, Daegu ranks fourth in population after Incheon. Since the mid-2000s, Daegu's population has slightly decreased from 2.5 million to about 2.43 million currently. Those who have visited Daegu know that it is a city located on a wide plain, with a well-organized road network, serving as an administrative center and home to many universities. Daegu has four advanced general hospitals, the most outside the metropolitan area, and this medical infrastructure has played a significant role in enduring the harsh trials.

Daegu has various images, but economically, it is often perceived as a 'region economically vulnerable.' There are several reasons, but the biggest factor is that the regional gross domestic product (GRDP) has been reported by the media as the lowest nationwide. It has ranked last for 26 consecutive years since 1992, and as of 2019, the per capita GRDP is 20.6 million KRW, about one-third of Ulsan's 64.41 million KRW, which ranks first. Judging by this alone, Daegu's economic situation would seem very poor, but in reality, per capita income ranks above the median among metropolitan municipalities, and household net assets are also high. These seemingly contradictory statistics explain Daegu's economic structure. Daegu's economy is structured such that residents earn income primarily outside the city rather than producing directly within it. From this perspective, the perception of Daegu as economically vulnerable can be seen as a misunderstanding due to not comprehensively considering the close relationship between Daegu and the neighboring Gyeongbuk region.

Choi Jun-young, Senior Advisor at Yulchon LLC

However, like many other large provincial cities in South Korea, the gap with the metropolitan area is widening, and especially the population is declining, which is a common problem. Daegu's population structure is increasingly concerning due to the continuous outflow of young people. The main cause of Daegu's population decline can be summed up as a lack of jobs. Without headquarters of large corporations or large-scale manufacturers, job seekers have no choice but to move to the metropolitan area or other regions.

Looking at Daegu's industrial structure, the service sector accounts for 71.5%, which is much higher than the national average of about 60%. Within the service sector, education, real estate leasing, public administration, and wholesale and retail trade have particularly high proportions. Until the 1970s, Daegu led South Korea's exports centered on the textile industry, but during the industrial restructuring process after the mid-1980s, it fell behind, and its role as an industrial hub rapidly diminished. The failure of the Milan Project, initiated in the late 1990s to modernize and advance the textile industry, was regrettable. Since then, Daegu's industrial structure has shifted toward automobile parts, machinery, and eyewear industries, but many evaluations suggest there are limits to creating quality jobs. What was the problem?

Data from the Bank of Korea Daegu-Gyeongbuk Headquarters in 2016 reveals the root cause. According to the report, Daegu's innovation capacity was 7.3, significantly lower than the national average of 8.9. This was mainly due to a smaller population involved in research and development and lower investment amounts compared to other regions. Additionally, the low linkage between manufacturing and service sectors hindered the advancement of manufacturing. Because industrial upgrading was not achieved, relatively low wages had to be paid, leading to the outflow of talent to other regions, which in turn reduced local research and development (R&D) and innovation capacity, creating a vicious cycle. In fact, this problem is common in all provincial areas outside the metropolitan area, but it was more pronounced in Daegu, which lacks large-scale business sites of major corporations.

Lowest regional gross product and job shortages... Young population outflow is a concern
Service sector accounts for 71%... Rapid decline in role as an industrial hub
Strengthening R&D and innovation capacity is a challenge... Need for transition to future-oriented industrial structure

As it became clear that strengthening innovation capacity and R&D was a challenge, not only Daegu City but also the central government have provided significant support and investment. The Korea Institute for Robot Industry Advancement, Korea Brain Research Institute, and Korea Agency for Digital Opportunity and Promotion have been established or relocated to Daegu. In addition to the establishment of Daegu Gyeongbuk Institute of Science and Technology, various research and educational institutions such as the Electronics and Telecommunications Research Institute Daegu-Gyeongbuk Research Center, Korea Institute of Industrial Technology Daegu Branch, National Daegu Science Museum, and Korea Institute of Machinery and Materials Daegu Convergence Technology Research Center have been established in the Daegu area.

The long-awaited national industrial complex project has also materialized through the Hyeonpung National Industrial Complex and Guji National Industrial Complex. Since the establishment of the Daegu-Gyeongbuk Free Economic Zone Authority, efforts have been made to create spaces where advanced industries and residential areas coexist through new town development projects such as Suseong Alpha City, Technopolis, and Isia Polis. Through these efforts, Daegu has partially achieved a transition to a future-oriented industrial structure such as robotics and electric vehicles, and exports increased from 6.9 billion USD in 2016 to 8.1 billion USD in 2018.

For Daegu's continuous growth, above all, efforts and a change in perception to secure and utilize excellent human resources are necessary. Although Daegu boasts the highest level of educational enthusiasm, most of these talents either enter medical schools within the region or move to Seoul. Although there are many well-educated and excellent female talents, their social advancement is more limited compared to other regions. A cultural change that recognizes challenge and innovation, as well as diversity and difference, is required. After overcoming the difficulties caused by COVID-19, Daegu faces the task of preparing for a full-scale transformation.

This content was produced with the assistance of AI translation services.