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A Study on the Location Policy for the Knowledge-Based Industries
지식기반산업 입지정책 연구(RR 2003-12) Young-Chul Park, Sang-Wook Kim, Kwang-Ik Kim,
Cheol-Soon Jang, and Se-Hoon Park December 2003․210 pages․Korean
Knowledge-based industry now plays a critical role in national and regional economic development. In order to strengthen the competitiveness of knowledge-based industry, there are needs to establish and operate significant policies for the industry. This study aims at examining the existing industrial location policy and to providing the policy alternatives to foster knowledge-based industry in Korea.
This report is organized with seven chapters. Chapter 1 is the introduction section. It contains goals, methodologies and ranges of the research. Chapter 2 reviews relevant theories and characteristics on knowledge-based industry. Knowledge-based industry could be defined as an industry that creative knowledge takes more pivotal role in a production process than traditional production factors, such as land, labor or capital, and so on.
Knowledge-based industry has several locational characteristics different from traditional industries. First, it tends to have a strong agglomerative pattern. Secondly, it can grow where industries have not been developed until now. Thirdly, it also tends to concentrate in large cities, especially in the capital region, including Seoul.
Chapter 3 deals with an analysis on location policies and institutions for knowledge-based industry in Korea. The location policy for knowledge-based industry has been established by various ministries, such as MOCT (Ministry of Construction &
Transportation), MOCIE (Ministry of Commerce, Industry and Energy), and MOIC (Ministry of Information and Communication) etc. Among the various policies, some of them are effective, and others are not realistic, and even more other policies have not been activated. And as those policies have been enacted separately, there has existed a
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Location policies for knowledge-based industry in foreign countries are reviewed in Chapter 4. Major findings are as follows. First, many countries have fostered knowledge-based industry within regional innovation systems (RISs) and regional clusters. Secondly, the development of an agglomeration site has tended to fail due to the lack of regional base. Thirdly, an agglomeration site for knowledge-based industry has been developed with a small size and by a gradual manner.
Chapter 5 covers empirical studies. For evaluating the existing policies and searching for new policy alternatives, empirical studies are carried out by both survey and in-depth interview. The studies are focused on the IT, BT, CT, and ET industries. The surveys and interviews include not only operating companies but also closed companies.
Major findings are as follows. First, most of companies in knowledge-based industry are small and medium sized. Second, in terms of locational characteristics, concentration on Seoul and Gyeonggi-do are very high. It means that knowledge-based industry tends to locate around large cities. Third, as for locational patterns, the numbers of business buildings, industrial parks and APT-typed factories have increased. Fourth, as for the effects of locational policies, the policies by the Office of Small and Medium Sized Firms or local governments have relatively been effective. Fifth, among the policy tools, business incubators (BI) have been most useful, followed by software centers, venture towns, national industrial parks, and APT-typed factories. Sixth, knowledge-based industry needs technological expert, administrative streamlization and easy establishment of companies.
The implications from the empirical studies are as follows. First, it is necessary to introduce an effective public supporting system. Second, it is important to enhance a linkage system between a commencement stage and a maturing stage. Third, it is necessary to construct policies for developing agglomerating sites. Fourth, it is necessary to develop policies for accepting location demand in the capital region effectively and fostering the locational demand in large cities within the non-capital regions. Fifth, in order to upbring knowledge-based industry, it is necessary to develop a comprehensive system that includes not only hard but also soft location factors.
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Chapter 6 suggests policy alternatives. For better directions of locational policies for knowledge-based industry, it is necessary to develop, so called, "thirdware" policies.
Second, a coordinating system for various locational policies should be introduced.
Specifically, policies should be consolidated by growth stage and by industry. Third, it is necessary to introduce demand-oriented location policies.
Chapter 7 has conclusions and policy recommendations. Seven policies are suggested as follows. First, locational policies should be restructured by the ways of fostering knowledge-based industry. Second, the effective linkage system among ministries in the central government is necessary. Third, a role assignment system between the central government and local governments should be rationalized. Fourth, the settling system of knowledge-based industry in local region is important. Fifth, all policies for knowledge-based industry should put top priority on meeting the needs of the industry.
Sixth, the policies that meet locational demand in large cities of the non-capital regions are necessary. Containing capacity for the knowledge-based industry within large cities should be enhanced. Seventh, urban high-technology industrial parks should be fostered and industrial park system has to be restructured for knowledge-based industry.
Next research issues are as follows. First, next research considers the life cycles of knowledge-based companies. Second, the research is necessary to foster knowledge-based industry in large cities. Third, the research on searching for the realistic policy tools is also needed. Fourth, the research that synthesizes various location policies is needed.
Fifth, the research that can find the ways to lead traditional industries to be knowledge-based is also needed.
