[Viewpoint] Rush to escape the Big Smoke

As Korean baby boomers retire, 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, 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.

The country’s rapid growth in the 1960s brought a continuous flood of people from the countryside to the cities to seek new opportunities there. The cities offered the best education and employment prospects, and they grew exponentially as a result of the sudden influx of job-seekers.

The pace of urbanization accelerated into the 1980s, when annual population growth in cities exceeded 5 percent. From the 2000s, however, growth rapidly dropped below 1 percent. Since 2006, the share of the population living in cities has stalled at 81 percent. This implies that Korea’s urbanization has peaked, as suggested by the country’s changing migration patterns.

The first characteristic of this change is the recent rush to escape the capital. In 2011, for the first time, more people moved out of the Seoul metropolitan area than relocated there from other areas. Seoul itself, which has seen a net population outflow since 1990, is losing 100,000 people each year. While neighboring Gyeonggi has in the past taken in most of these people, the majority are now moving to South and North Chungcheong, and Gangwon.

Others are leaving regional cities in droves. 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 logistical advantages, has begun to suffer losses. As a result, Korea’s primacy index, which measures the importance of a county’s largest city, reached 2.89, higher than that of the U.S. (2.16) and Japan (2.43). This indicates that, compared to other countries, even Korea’s second-largest city of Busan is much less populated, and less preeminent, than Seoul.

The third characteristic is the firming up of Korea’s central regions. Although the majority of provincial areas are experiencing an outflow of people, the nation’s central regions have been gaining in terms of population.

South Chungcheong began experiencing a net gain in population from 2003, followed by North Chungcheong in 2006, and Gangwon 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, the main driver of growth has been increased employment opportunities due to investment in the region by companies that make automobiles, semiconductors and LCDs. Migrants to this region consist mostly of parents in their 30s and 40s.

Those moving to Gangwon, on the other hand, are mostly retirees in their 50s who want to live out the remainder of their lives in the countryside.

But these provinces are less attractive for people in their 20s who live there, resulting in a net outflow of young people.

Korea is experiencing a major demographic transition. Despite this shift, current land and regional policies date from the era of rapid urbanization, and are focused on keeping a lid on the size of big cities.

As Koreans increasingly seek a less urban lifestyle, the country 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 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 percent, the market for conventional apartment blocks is already stretched.

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 - where people live and work in two totally different areas - arising from flexible workplace policies.

Companies can create new business models and take advantage of 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 been shifting toward 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 employment conditions and education systems 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.

*The author is a research fellow at Samsung Economic Research Institute.
By Park Yong-kyu