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PARK Yong-Gyu

Escaping from the Big City

PARK Yong-Gyu

Aug. 21, 2012

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As Korea's baby-boom generation retires, they have increasingly come to embrace the idea of "returning to the countryside" and living in more pastoral surroundings. More Koreans now spend their weekdays in the city for work, and decamp to the countryside on weekends, while flexible polices at some workplaces allow a few to work entirely in the suburbs, and come to the city only for shopping and entertainment.

Korea's rapid growth in the 1960s brought in a continuous flood of people from the countryside into the cities to seek the opportunities newly available there. To incoming migrants, Korea's cities were the best option for education and employment, and Korea's major cities grew exponentially as a result.

Urbanization proceeded apace into the 1980s, when annual population growth in cities exceeded 5%. From the 2000s, however, growth rapidly declined below 1%. Since 2006, the rate of urbanization, which measures the share of the urban population out of the total for the nation, has stalled at 81%. This implies that Korea's urbanization has peaked, a fact evident in the country's changing migration patterns.

The first characteristic of this change is the "escape from the capital." In 2011, for the first time, more people moved out of the Seoul metropolitan area than moved in. Seoul itself, which has seen a net population outflow since 1990, is losing 100,000 people each year. While neighboring Gyeonggi Province has taken in many of these emigrants, it too saw its growth decline markedly from 2002. The majority of migrants escaping the capital are moving to South and North Chungcheong provinces, and Gangwon Province.
The second characteristic of Koreans' migration from the city is the "escape from regional cities." Busan began experiencing a net outflow of population in 1989, and Daegu followed suit in 1995. Starting from this year, even Daejeon, which enjoys strong locational advantages, has begun to suffer losses. As a result, Korea's index of "primacy," an index measuring the importance of a county's largest city, reached 2.89, higher than that of the US (2.16) and Japan (2.43), even as Seoul has itself lost population. This indicates that compared to other countries, even Korea's second largest city, Busan, is much less developed compared to Seoul.

The third characteristic is the "emergence of central Korea." Although the majority of provincial areas are experiencing an outflow of population, the central regions of Korea have been gaining population. South Chungcheong Province began experiencing a net gain in population from 2003, followed by North Chungcheong Province in 2006, and Gangwon province in 2008, and growth in these areas is accelerating. The majority of people migrating from the capital are concentrated in these three regions.

For Chungcheong Province, the main driver of growth is increased employment opportunities, due to investment in the region by automobile, semiconductor and LCD firms. Migrants to this region consist mostly of people in their 30s and 40s with children. Those moving to Gangwon province on the other hand, are mostly retirees in their 50s who want to live out the remainder of their lives in the countryside. Despite this, people in their 20s in these provinces continue to prefer to live elsewhere, resulting in a net outflow of young people.

Korea is experiencing a major demographic transition as more and more of its citizens depart from the city. Despite this shift, Korea's current land and regional policies date from the era of rapid urbanization, and are focused on controlling big cities. As Koreans increasingly pursue a less urban lifestyle, Korea needs new policies that can manage the transition, by preventing a decline in the competitiveness of its major cities, and maximizing the benefits of urban economies. The function of city centers must be restored via urban regeneration plans, along with the fostering of urban industries. In particular, policies to revitalize the fast-declining industries of provincial cities must be promoted so that they can spearhead regional development.

Companies must also explore the business opportunities that this new era presents. With urbanization slowing and the housing supply rate exceeding 100%, the market for conventional apartment blocks is already stretched thin. Opportunities instead lie in the niche markets created by diversifying housing demand, including renovations of existing housing, and the construction of town houses and tailored housing. It is also important to keep a close eye on relocation services that utilize the increasing number of vacant houses, and the rising cases of multi-habitation (separation of employment location and residence) arising from flexible workplace policies. Companies can create new business models and take advantage of business opportunities presented by the regeneration of city centers. This includes fostering smart city models that enhance the competitiveness of existing infrastructure, and constructing "compact cities" to restore the functions of the city center.

Korea's population has moved almost unilaterally to the cities since the 1960s. Recent changes, however, have resulted in a continuous ebb and flow of people between cities and provinces, preventing significant challenges for both. Big cities need to improve their environment for employment and education to prevent depopulation, and promote stable and sustainable regional development. For provinces, the top priority is creating favorable jobs in manufacturing to encourage the inflow of new residents, while improving the educational environment to prevent the outflow of young people.

This column originally appeared in Korea JoongAng Daily.
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