Localizing the Digital Revolution: Strategies for Regional Growth in South Korea

Jinwon Bae () and Dongkyu Lee ()
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Jinwon Bae: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr/en
Dongkyu Lee: Korea Institute for Industrial Economics and Trade, Postal: Sejong National Research Complex, Korea Institute for Industrial Economics and Trade, 370 Sicheong Dae-ro C-dong 8-12F 30147, Republic of Korea, http://www.kiet.re.kr/en

No 25-1, Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: In South Korea, a growing chorus of experts sees the digital divide between the Seoul Capital Area (SCA) -- which includes the capital Seoul, the nearby metropolis of Incheon, and the surrounding province of Gyeonggi -- and everywhere else in the country as having seriously adverse effects on both national economic and industrial competitiveness and regional development. Research has shown that this gap hinders regional economic growth and stifles innovation, which in turn perpetuates and deepens social inequality (Ko et al., 2022). Up to now, the Korean government’s digital transformation (DX) policies have focused on supporting the development of digital technology and leveraging digital technologies to increase efficiency and productivity. In this paper, we set out to demonstrate the importance of facilitating DX at the local level and analyzing the relationship between digital activity and regional innovative growth. Based on the results of our analysis, we identify the implications for policies capable of bridging the digital divide and promoting balanced development across South Korea.

Keywords: digitalization; digital transformation; regional economics; regional development; regional disparities; regional inequality; Seoul Capital Area; SCA; digital divide; population decline; demographic decline; population aging; innovative growth; regional innovation; South Korea; Korea Institute for Industrial Economics and Trade; KIET (search for similar items in EconPapers)
JEL-codes: R10 R11 R12 R38 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2025-02-28
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