A mini-miracle in Gumi
Gumi is an inland city of North Gyeongsang. Apart from its fame as the birthplace of former President Park Chung Hee, it is geographically isolated and underdeveloped. There is no port or international airport nearby. It received a major setback in 2005 when the region’s major employer, LG Display, moved its assembly lines for large liquid crystal displays to Paju in Gyeonggi after the government eased regulations on industrial facilities around the capital.
The city feared the collapse of its economy following the exodus of its high-technology workforce. But the city has recovered its vitality. Its population is expected to reach 500,000, with 11,000 added last year. The city has helped to increase the population of North Gyeongsang, which has been shrinking for the last 13 years.
Gumi’s power comes from its citizens. Its people united to turn the crisis into an opportunity. To support the LCD assembly lines left in Gumi, citizens started a campaign to buy LG shares. As a result, they hold a total of 207,747 shares in LG LCD worth 6.6 billion won ($5.9 million). The global market trend was also in the city’s favor. Sales of large displays slumped due to sluggish global demand, while demand for small LCDs jumped due to the popularity of mobile digital gadgets. The windfall came from demand for displays for notebooks and smartphones.
LG repaid Gumi’s citizens by investing 1.3 trillion won to build a sixth-generation LCD line in the city. The city also drew capital investment from Japan’s Toray Industries to build a carbon fiber production line. Woongjin Chemical is basing the country’s first reverse osmosis membrane production line in the city.
The city has not offered extravagant benefits to lure capital investment. It was the heart and sincerity of the people that moved corporate investors. Gumi citizens voluntarily send thank-you notes to companies based in their hometown. The city administration selects the best enterprise every month and invites the manager and union head of the workplace to City Hall to encourage and congratulate them. Small efforts have added up to make great difference.
These days, local governments vie fiercely to entice corporate investment and lawmakers fret losing their constituencies due to shrinking populations. Many industrial complexes are empty. Other local governments should learn a lesson from the Gumi mini-miracle. Capital investment and jobs can be created with the united efforts of a local administration and residents.