Evaluation of the Policies and Programs for Regional Industrial Clusters

Published on Nov. 14, 2024
Published by Social Administrative Program Evaluation Division, Budget Analysis Department

   The government is promoting various policies and programs to support and develop regional industrial clusters. As of September 2024, 52 types and 2,330 regional industrial clusters have been designated and are operational. Over the past five years (2021-2025), the total budget allocated to these clusters has reached 6.5 trillion won. However, there has been insufficient comprehensive review of the policies and programs. Against this backdrop, this report derives directions for improvement, focusing on the appropriateness of the designation and location of regional industrial clusters, the performance of related policies and programs, and the operation and management systems. The main findings are as follows.
   First, measures need to be reviewed to address the problem of excessive and similar designations of regional industrial clusters and to enhance the linkage between policy target industries outlined in major plans. Specifically, there have been instances where the alignment between the industrial themes of each city and province in the “Fourth Five-Year Balanced National Development Plan” (2018–2022) and the key industries identified in the “Regional Industry Promotion Plans” was insufficient. Additionally, many cities and provinces selected similar national strategic technologies as policy fostering targets in relation to the 12 major national strategic technologies.
   Second, improving the performance of regional industrial cluster policies and programs is essential. For example, policy efforts should be made to address the decline in SCI papers, patent applications, and new employment per 1 billion won of national budgets in the Regional Innovation Clusters, which are key types of regional industrial clusters. Additionally, it is important to manage the requirements for establishing and maintaining research-based spin-off companies in the Special Research and Development Zones. Further, efforts should be made to activate foreign investment companies and encourage foreign direct investment (FDI) in the Free Economic Zones.
   Third, a pan-ministerial survey on the status of regional industrial clusters should be promoted, along with the development and implementation of a comprehensive management system. The definition and scope of regional industrial clusters vary or are unclear across different laws and policies, with each agency presenting the clusters differently, resulting in insufficient comprehensive data accumulation. Therefore, there is a need for an integrated, regular survey on the status of regional industrial clusters at the pan-ministerial level. Additionally, the fragmented governance structure related to regional industrial clusters, coupled with the absence of a unified management system, can lead to similar and overlapping designations of regional industrial clusters, ultimately weakening the effectiveness of related policies and programs. To address this, it is crucial to review the establishment and operation of a pan-ministerial comprehensive management system for regional industrial clusters.