'Top 1000 Revenue Companies' in Busan, Ulsan, and Gyeongnam Region Only 84... 24% Decrease Over 10 Years

Chamber of Commerce Holds 1st Regional Economic Forum
Urgent Policies Needed for Regional Specialized Industries and Megacity Promotion

Comparison of 'Growth Potential Index' by Region... Southeast Region Ranking Continues to Decline
4th in 2010 → 5th in 2015 → 6th in 2020
'Top 1000 Revenue Companies' in Southeast Region
Decreased 24% from 110 to 84 over the Past Decade

[Image source=Yonhap News]

[Asia Economy Reporter Donghoon Jeong] It has been analyzed that the growth potential of the Busan, Ulsan, and Gyeongnam regions has significantly declined over the past decade. During this period, the growth potential of the Seoul metropolitan area has rather increased, raising concerns that regional imbalance has deepened further.

The Korea Chamber of Commerce and Industry (KCCI) held the '1st Regional Economic Forum' targeting the Busan, Ulsan, and Gyeongnam regions on the 4th. According to the growth potential index of six regions nationwide announced at the forum, the index of the Seoul metropolitan area rose to first place over the past ten years, while non-metropolitan areas relatively declined, raising concerns that the economic gap between the metropolitan and non-metropolitan areas will widen further in the future.

Busan-Ulsan-Gyeongnam Losing Core Companies

The growth potential index measures the capacity of a region to contribute to current or future growth numerically. The growth potential ranking of the Southeast region, which was 4th in 2010, dropped to 6th in 2020.

Kim Youngsoo, Senior Research Fellow at the Korea Institute for Industrial Economics and Trade, who jointly calculated the regional growth potential index with KCCI, mentioned at the forum, "The transition of existing key manufacturing industries such as shipbuilding, steel, and petrochemicals to knowledge-based manufacturing has been delayed, and the decline in the number of professionals and young population has deteriorated human capital capacity, causing the regional economy to lose its growth momentum."

Data provided by the Korea Chamber of Commerce and Industry

According to Statistics Korea, the net migration of young people from the Southeast region to the Seoul metropolitan area increased more than threefold in about five years, from approximately 8,400 in 2015 to about 27,000 in 2020.

The number of core companies that practically lead the regional industry has also significantly decreased. Analyzing the status of the top 1,000 companies by sales obtained from Korea Enterprise Data, a corporate information analysis agency, the number of top 1,000 companies located in the Seoul metropolitan area increased from 711 in 2010 to 752 in 2020, whereas those in the Southeast region decreased by 24%, from 110 to 84.

Senior Research Fellow Kim said, "The growth potential index reflects not only the economic level of each region but also its future growth potential," adding, "Therefore, without groundbreaking measures for innovative investment in regional industries and fostering new industries, the gap in growth potential between regions will inevitably widen."

Stagnation in Key Industries like Shipbuilding and Machinery... Need for Ultra-Wide Area Collaboration

The forum also discussed ways to enhance the industrial competitiveness of the Southeast region amid industrial structural transformation.

Choi Yoonchan, Senior Research Fellow at the Busan Development Institute, pointed out in his presentation on 'Current Status and Development Strategy of Specialized Industries in the Southeast Region' that "Key industries such as shipbuilding and machinery in the Southeast region have recently faced growth stagnation and recession, and new growth momentum to replace them has yet to be found." He also noted, "If industrial structural transformation accelerates further, the industries in the Southeast region are likely to shrink even more."

Busan, Ulsan, and Gyeongnam have led Korea's industrialization as production bases for key industries such as shipbuilding, automobiles, and machinery. However, as the industrial structure rapidly changes to semiconductors, batteries, and bio industries, the share of Busan, Ulsan, and Gyeongnam in the regional gross domestic product (GRDP) has decreased from 16.4% to 14.1% over the past decade.

Alternatives for the economic development of the Southeast region were also proposed. The core is to create a virtuous cycle of regional development by upgrading regional industries, discovering new industries to enhance industrial competitiveness, and fostering the Busan, Ulsan, and Gyeongnam area into a mega-city comparable to the Seoul metropolitan area.

Senior Research Fellow Choi emphasized, "The top priority is to strengthen the competitiveness of existing industries such as shipbuilding, machinery, and automobiles, and to foster new industries such as hydrogen and offshore wind power that respond to the digital and eco-friendly era." He also advised, "To sustain regional competitiveness, it is necessary to create a region where companies and talent come together by improving living and logistics infrastructure as well as establishing research and development (R&D) and startup ecosystems."

Data provided by the Korea Chamber of Commerce and Industry

Concerns and advice from the regional business community and experts regarding regional imbalance issues were also expressed. Lee Younghwal, Executive Vice President of Busan Chamber of Commerce and Industry, representing the Busan business community, said, "While it is a priority for the region to discover and nurture new growth industries on its own, it is also true that there are limits to the region's power alone," adding, "Since the Southeast region is also striving to establish a Northeast Asia logistics hub and create the Busan-Ulsan-Gyeongnam mega-city, the newly formed government should take an interest in the regional economy and prepare drastic measures."

Professor Jang Seokin of Korea Polytechnic University urged organic cooperation among the government, local governments, and public and private sectors during this period of economic and social transformation. Professor Jang said, "For the ultra-wide area strategic industries that Busan, Ulsan, and Gyeongnam plan and promote to succeed, it is necessary to carefully review whether the specific direction is correct, how to secure the necessary resources, and what support the government should provide," adding, "A cooperative network that can create synergy among the needs of the regional industry, the capabilities of local governments, and the central government's support policies must be established."

Woo Taehee, Executive Vice President of KCCI, also stated, "At a time when local extinction is becoming a reality, regions need to pursue new economies of scale through the reallocation of resources within the region to gain competitiveness," and expressed hope that "the Busan-Ulsan-Gyeongnam mega-city project will be successfully promoted, contributing to national-level regional balanced development and becoming a model case for other regions."

Attendees at the forum included Woo Taehee, Executive Vice President of KCCI; Park Jongwon, Director of Regional Economic Policy Bureau at the Ministry of Trade, Industry and Energy; Kim Yunil, Vice Mayor for Economic Affairs of Busan City; Lee Younghwal, Executive Vice President of Busan Chamber of Commerce and Industry; Lee Nyunho, Vice President of Changwon Chamber of Commerce and Industry; Lee Donghwi, Executive Vice President of Korea Hydrogen Industry Association; Park Seonggil, Head of Gyeongnam Regional Headquarters of Korea Industrial Complex Corporation; Kim Hyungkyun, Director of Busan Technopark; and Kim Howon, Director of Blockchain Platform Research Center.

Following this 1st Regional Economic Forum, the 2nd forum is scheduled to be held at the end of this month in the Gwangju, Jeonnam, and Jeonbuk regions.

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