Chairman Ryu Jin's Decision on "Poongsan Headquarters Relocation": Will It Spur Other Major Corporations to Move Their Headquarters?

As Poongsan Group considers relocating its Seoul headquarters to a provincial area, the movement for balanced development within Korea's business community is entering a new phase. Ryu Jin, Chairman of Poongsan Group and President of the Korea Economic Association, has directly mentioned the relocation plan, raising the possibility of changes in the long-stagnant discussions around large corporations moving their headquarters outside the capital region.

On April 30, when Poongsan announced its intention to review the headquarters relocation, industry observers noted that major corporations are now engaging more concretely in discussions about balanced regional development and expanding youth employment in local areas.

Ryu Jin, President of the Korea Economic Association (left), gave a greeting at the '2026 Korea Win-Win Employment Fair' held on the 29th at the Yangjae aT Center. This event is participated by more than 700 companies through online and offline channels, providing "everything about youth employment in Korea," from recruitment consultations to on-site interviews and competency development. Korea Economic Association

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This move by Poongsan is closely tied to the rapid decline of regional economies due to the concentration of businesses in the Seoul metropolitan area. According to the Busan Chamber of Commerce and Industry, as of 2024, 750 out of Korea’s 1,000 largest companies by revenue are concentrated in the Seoul, Incheon, and Gyeonggi metropolitan region. The overconcentration of high-quality jobs in the capital has accelerated youth outflow from the provinces, fueling a vicious cycle of local labor shortages and declining industrial competitiveness.

In Busan, for example, the annual economic growth rate was only 0.5% last year, marking the lowest figure since 2020, when the local economy was hit hard by COVID-19. The steady stream of young people leaving for jobs in the metropolitan area has quickly sapped the vitality of the regional economy, according to analysts.

Against this backdrop, calls are growing to disperse companies concentrated in the capital region, create youth jobs in the provinces, and revitalize local economies. An official from the Korea Economic Association emphasized, “We are striving not to forget about the employment challenges faced by young people in the provinces and those from vulnerable backgrounds, so that everyone can prosper together.”

Industry insiders believe that Poongsan’s decision will have a significant ripple effect on other large companies considering relocation. While the direct economic impact of moving a corporate headquarters may not be explosive, the symbolism of potentially reviving the regional economy carries substantial weight. Observers also suggest this could bolster government policies aimed at expanding local job opportunities and youth education.

Lee Jae-myung, leader of the Democratic Party of Korea, and Lee Jae-yong, chairman of Samsung Electronics, are conversing warmly ahead of the 'Youth Employment Support On-site Meeting' held on March 20 last year at Samsung Youth Software Academy (SSAFY) in Gangnam-gu, Seoul. Photo by Kim Hyun-min

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An industry official commented, “It is encouraging that the creation of high-quality jobs through headquarters relocation has been raised as a key solution to address depopulation, youth brain drain, and economic stagnation in the regions.”

However, there is also considerable caution regarding whether Poongsan’s relocation will immediately trigger similar moves by other companies. Given that most major business networks are concentrated in the capital region, relocating outside Seoul entails considerable risks, such as losing existing talent. This is why many argue there are insufficient incentives for companies to make such a decision.

Experts further point out that, given Poongsan’s focus on manufacturing, the effect on local job creation may be limited. Kim Seongbong, a professor of economics at Hansung University, explained, “When a company’s headquarters relocates, the increase in resident staff can boost local housing and consumption, leading to regional economic revitalization. However, since manufacturing is not an industry that directly engages in sales activities, its job creation effect may be relatively limited compared to sectors like finance, which require active local hiring.”

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