Strategic Placement Key to Success of Second Public Institution Relocation

The government is set to announce its second public institution relocation plan in the second half of the year, with increasing calls for strategic placement to promote regional balanced development. Analysts suggest that the success of this second relocation will depend on how effectively it can create synergies by linking industries with public institutions, rather than merely moving agencies to rural areas.

According to relevant ministries, up to 350 public institutions, including those remaining in the metropolitan area and government-funded organizations, are being considered for the second relocation. The government plans to begin the relocation process next year, focusing on leading institutions after announcing the plan in the latter half of this year.

This second relocation is likely to adopt a 'cluster-based approach,' concentrating institutions in specific hubs based on their functions and industrial connectivity. The aim is to enhance synergies by grouping related agencies around key regional industries such as marine, finance, and energy. For instance, energy public enterprises and related institutions may be concentrated in the Honam region, while financial and marine agencies could be placed in Busan.

The government is considering this approach to avoid repeating the limitations of the first public institution relocation. While the first relocation, which focused on equitable distribution among regions, contributed to some degree of fairness, it fell short in fostering industrial connections and creating a self-sustaining growth foundation. Hong Jun-hyun, a professor at Chung-Ang University, stated, "The excessive dispersion of institutions across regions during the first relocation hindered both the expected clustering effects and regional balanced development outcomes."

Experts express concern that the relocation of public institutions may be influenced by political considerations. Kang In-soo, a professor of economics at Sookmyung Women's University, warned, "As political considerations increase, existing principles may be compromised, weakening the clustering effect and potentially leading to poor site selection decisions." Lee Hyang-soo, president of the Korean Association for Local Government Studies and a professor at Konkuk University, added, "During the first relocation, political interests often took precedence over regional characteristics, making it difficult to achieve the original goal of national balanced development."

Improving living conditions is also identified as a key challenge. During the first relocation, insufficient educational, healthcare, and cultural facilities led to unmet expectations for family relocations, and some innovation cities experienced a 'weekend hollowing out' phenomenon, where residents worked during the week but returned to the metropolitan area on weekends. Lee emphasized, "Some innovation cities still lack essential living infrastructure," suggesting that relocating public institutions responsible for education, healthcare, and cultural facilities should also be considered.

There is also a call to strengthen connections with local communities. When public institutions relocate, they should establish talent development systems in collaboration with local universities, such as operating contract programs or recruitment linkage initiatives. Ma Gang-rae, a professor in urban planning and real estate at Chung-Ang University, stated, "We need to create a structure where local universities and communities grow together, and municipalities with such plans should be prioritized as relocation sites. Simply focusing on expanding tax revenue will not lead to success."

Minimizing relocation costs is another challenge. Ma noted, "The first relocation process incurred significant costs for developing new sites to create innovation cities," suggesting that it is essential to actively utilize existing vacant urban areas and public facilities rather than developing new farmland.

Some experts argue that fostering hubs around metropolitan areas is more efficient than creating new innovation cities. Professor Hong stated, "It would be preferable to first place public enterprises and institutions in metropolitan areas and then expand to regional central cities, as this would allow for the utilization of existing infrastructure, reducing costs and maximizing industrial clustering effects."