OECD territorial reviews. Seoul, Korea.

173 Pages·2005·6.397 MB·English

by  OECD

«
OECD Territorial Reviews
Seoul, Korea
OECD
Territorial Reviews
For many cities in OECD countries, globalisation has opened larger access to new
markets, skilled human resources and advanced technology, while accelerating
international competition and industrial restructuring. This OECD Territorial Review
examines how Seoul – a city of 10.3 million people at the core of a capital region
of 22.5 million people – is striving to upgrade its positioning from a gigantic national Seoul, Korea
capital towards a “world city” and a business hub in Northeast Asia. This quest for
international competitiveness fits within a complex national agenda that gives
priority to balanced development across the country, notably via the central
government’s project to relocate administrative functions outside Seoul.
In order to maximise agglomeration economies while addressing congestion costs,
Seoul needs to: (i) better spread the innovation produced by its well-performing
education and research system into its economy; (ii) exploit its remarkable urban
renewal policy to build a territorial attractiveness strategy (including the flagship
project of Cheonggyecheon, which transformed over 6 km of elevated expressway
into a river within the city); and (iii) explore the ongoing decentralisation process and
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existing horizontal collaboration mechanisms to build a stronger capital region. E
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metropolitan regions undertaken by the OECD Territorial Development Policy rit
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ISBN 92-64-013008
January 2000
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OECD Territorial Reviews
Seoul, Korea
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
Caecilia_histo_gen_A_16x23.fm Page 2 Tuesday, August 30, 2005 5:23 PM
ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENT
The OECD is a unique forum where the governments of 30 democracies work
together to address the economic, social and environmental challenges of globalisation.
The OECD is also at the forefront of efforts to understand and to help governments
respond to new developments and concerns, such as corporate governance, the
information economy and the challenges of an ageing population. The Organisation
provides a setting where governments can compare policy experiences, seek answers to
common problems, identify good practice and work to co-ordinate domestic and
international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, the
Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand,
Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey,
the United Kingdom and the United States. The Commission of the European
Communities takes part in the work of the OECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics
gathering and research on economic, social and environmental issues, as well as the
conventions, guidelines and standards agreed by its members.
This work is published on the responsibility of the Secretary-General of
the OECD. The opinions expressed and arguments employed herein do not
necessarily reflect the official views of the Organisation or of the governments
of its member countries.
Publié en français sous le titre:
Examens territoriaux de l'OCDE
SÉOUL, CORÉE
© OECD 2005
No reproduction, copy, transmission or translation of this publication may be made without written permission.
Applications should be sent to OECD Publishing: [email protected] or by fax [phone]. Permission to photocopy a
portion of this work should be addressed to the Centre français d'exploitation du droit de copie, 20, rue des
Grands-Augustins, 75006 Paris, France ([email protected]).
Also available in the series of Territorial Reviews on urban and
metropolitan regions:

Helsinki, Finland (2003)
Öresund Copenhagen/Malmö, Denmark/Sweden (2003)
Vienna/Bratislava, Austria/Czech Republic (2003)
Melbourne, Australia (2003)
Athens, Greece (2004)
Montreal, Canada (2004)
Mexico City, Mexico (2004)
Busan, Korea (2005)
OECD TERRITORIAL REVIEW OF SEOUL, KOREA– ISBN-92-64-01300-8 © OECD 2005 3
FOREWORD
Across the OECD, globalisation increasingly tests the ability of regional
economies to adapt and exploit their competitive edge, as it also offers new
opportunities for regional development. This is leading public authorities to
rethink their strategies. Moreover, as a result of decentralisation, central
governments are no longer the sole provider of development policies. Effective
and efficient relations between different levels of government are required in
order to improve public service delivery.
The objective of pursuing regional competitiveness and governance is
particularly relevant in metropolitan regions. Despite producing the bulk of
national wealth, metropolitan areas are often characterised by unexploited
opportunities for growth as well as unemployment and distressed areas.
Effective policies to enhance their competitiveness need to address their
functional region as a whole and thus call for metropolitan governance.
Responding to a need to study and spread innovative territorial
development strategies and governance in a more systematic way, the OECD
created in 1999 the Territorial Development Policy Committee (TDPC) and its
Working Party on Urban Areas (WPUA) as a unique forum for international
exchange and debate. The TDPC has developed a number of activities, among
which a series of specific case studies on metropolitan regions. These studies
follow a standard methodology and a common conceptual framework, allowing
countries to share their experiences. This series is intended to produce a
synthesis that will formulate and diffuse horizontal policy recommendations.
4 OECD TERRITORIAL REVIEW OF SEOUL, KOREA– ISBN-92-64-01300-8 © OECD 2005
ACKNOWLEDGEMENTS
The Directorate of Public Governance and Territorial Development of the
OECD would like to thank Seoul Metropolitan Government and the Korean
government for their co-operation and support during the process of this
Review.
A team of international experts participated to the process: Professor
Andrew Ryder (Portsmouth University, UK), Mr. Greg Clark (Office of the
Deputy Prime Minister, London Development Agency, UK), Mr. Adam Ostry
(Infrastructure and Communities, Canada), Professor Rosemary Scanlon (New
York University, US), and Professor Andrew DeWit (Rikkyo University,
Japan).
This Review was co-ordinated and drafted by Ms. Soo-Jin Kim, supervised
by Ms. Lamia Kamal-Chaoui and directed by Mr. Mario Pezzini, Head of the
OECD Regional Competitiveness and Governance Division. Individual
contributions were provided by Ms. Brunella Boselli and Mr. Guang Yang. Ms.
Sehee Hwang provided assistance to the reviewing process. Ms. Liliana Salazar,
Ms. Suzanna Grant and Ms. Erin Haddock prepared the Review for publication.
OECD TERRITORIAL REVIEW OF SEOUL, KOREA– ISBN-92-64-01300-8 © OECD 2005 5

TABLE OF CONTENTS
FOREWORD..................................................................................................4
ASSESSMENT AND RECOMMENDATIONS..........................................11
CHAPTER 1. SEOUL: FROM A MEGA-CITY TOWARDS A GLOBAL
CITY.............................................................................................................23
1.1. Main trends of Seoul...........................................................................23
What is Seoul?.......................................................................................23
Seoul’s contribution to national growth.................................................26
Assessing Seoul's competitiveness.........................................................30
1.2. Building on comparative advantages and removing obstacles to
growth to face globalisation challenges.....................................................37
Promising clusters..................................................................................38
Strong human capital and R&D capacity...............................................46
Labour market efficiency.......................................................................50
Internationalisation of Seoul’s economy................................................52
Metropolitan integration and social cohesion........................................63
1.3. Seoul versus balanced regional development?...................................65
CHAPTER 2. STRATEGIC POLICIES FOR REGIONAL AND
INTERNATIONAL COMPETITIVENESS OF SEOUL.............................73
Seoul in Korea’s regional development policies.......................................73
2.1. Shaping Seoul’s knowledge competitiveness.....................................75
Developing knowledge-intensive activities...........................................77
Building an innovation-inducive business environment through clusters
animation................................................................................................83
Attracting and embedding FDI..............................................................94
2.2. Towards better urban quality..............................................................99
An innovative example of urban renewal policy: Cheonggyecheon
Restoration project...............................................................................100
Reducing congestion costs...................................................................107
2.3. A step forward: territorial branding policies.....................................110
Exploiting new-generation tourism......................................................110
Spreading Seoul’s city brand...............................................................114
OECD TERRITORIAL REVIEW OF SEOUL, KOREA– ISBN-92-64-01300-8 © OECD 2005 7
CHAPTER 3. WIN-WIN GOVERNANCE FOR SEOUL.........................121
3.1. Governance of Seoul as a global city...............................................121
Institutional challenges........................................................................122
High fiscal autonomy… and high debt................................................126
Improving public management............................................................134
Local democracy and community engagement....................................140
3.2. Seoul and the nation: decentralisation and regional development....143
Exploring decentralisation opportunities.............................................144
Is Seoul financing regional development?...........................................149
3.3. Governance for regional coherence: horizontal collaboration..........152
Horizontal planning and co-operation..................................................153
From neighbours to partners................................................................155
Conclusion: The changing role of a modern capital city.........................157
REFERENCES............................................................................................163

Tables
Table 1.1. Labour productivity growth in Korea and the capital region....32
Table 1.2. Share of knowledge-based industries in Seoul, 1996-2002......32
Table 1.3. Sectoral specialisation in Seoul and selected OECD
metropolitan regions, 2000.......................................................33
Table 1.4. Employment by area and sector, 1995-2002............................33
Table 1.5. Number of firms by area and sector, 1995-2002......................34
Table 1.6. Comparison of R&D intensity, 1995-2002...............................49
Table 1.7. Intellectual property rights trends by major region,
1996 and 2002..........................................................................50
Table 1.8. Share of Seoul in national total exports....................................52
Table 1.9. Breakdown of Seoul exports.....................................................54
Table 1.10. FDI in Seoul by industry, 2001-2003.....................................56
Table 1.11. Breakdown of FDI in Seoul by country of provenance,
2001-2003.................................................................................58
Table 2.2. Estimated cost of Cheonggyecheon Restoration project........105
Table 3.1.Total budget of the central and local governments (net),
FY 2004..................................................................................127
Table 3.2. Trends in fiscal independence index (FII), 1996-2004...........129
Table 3.3. Comparing expenditures of Seoul Metropolitan Government
and its 25 gu, 2004..................................................................132
Table 3.4. Comparing expenditures in Seoul and other metropolitan cities,
2004........................................................................................134
Table 3.5. Examples of shared functions with financial support.............147

8 OECD TERRITORIAL REVIEW OF SEOUL, KOREA– ISBN-92-64-01300-8 © OECD 2005
Figures
Figure 1.1. Population and GDP concentration in Korea..........................24
Figure 1.2. Population growth in Seoul, 1970-2003..................................25
Figure 1.3. Commuting flows in Seoul......................................................27
Figure 1.4. Share of Seoul and capital region in national GDP, 1986-2002
...................................................................................................................28
Figure 1.5. GDP growth rate in Seoul, capital region and Korea,
1986-2002...............................................................................29
Figure 1.6. GDP per capita by region, 2003..............................................31
Figure 1.7. Breakdown of service sector in Seoul, 2002...........................35
Figure 1.8. Labour productivity growth in OECD member
countries, 1993-2002..............................................................36
Figure 1.9. Location of fashion clusters in Seoul......................................39
Figure 1.10. Location of printing and publishing cluster in Seoul............40
Figure 1.11. Location of financial industry cluster....................................41
Figure 1.12. Stock market capitalisation...................................................42
Figure 1.13. Number of foreign financial institutions...............................43
Figure 1.14. Location of business services cluster....................................44
Figure 1.15. Location of IT cluster............................................................45
Figure 1.16. Location of digital content cluster.........................................46
Figure 1.17. Comparison of R&D expenditures in 2003...........................48
Figure 1.18. R&D expenditures in Seoul and selected Asian cities, 200149
Figure 1.19. Comparison of tenure status..................................................51
Figure 1.20. Share of capital region in Korea’s exports, March 2004.......53
Figure 1.21. Share of Seoul in national total of FDI..................................55
Figure 1.22. Trends in FDI inflows to Seoul, 1998-2003..........................57
Figure 1.23. Comparison of GDP for selected cities in East Asia.............60
Figure 1.24. Number of hotels...................................................................63
Figure 1.25. Comparison of housing penetration ratio..............................65
Figure 2.1. Number of conventions by hosting city in
Northeast Asia, 1997-2001...................................................112
Figure 3.1. Korean territorial framework.................................................123
Figure 3.2. Map of Seoul Metropolitan Government’s 25
autonomous gu......................................................................125
Figure 3.3. Share of dependent and independent revenues in
total budget of local governments and Seoul, FY 2004........129
Figure 3.4. SMG debt finance, 1996-2004..............................................133
Figure 3.5. Breakdown of Seoul Metropolitan Government’s functions.146

Boxes
Box 2.1. Monitoring the growth of capital regions in OECD countries....75
Box 2.2. Seoul’s vision to become a world city........................................76
OECD TERRITORIAL REVIEW OF SEOUL, KOREA– ISBN-92-64-01300-8 © OECD 2005 9