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Innovation-driven Regional Growth Strategy through Decentralization and Innovation to Overcome Low Growth Era

Author Lee Doohee et al. Date 2018.12.07 Page

Korea, which has entered the age of low growth, faces another crisis and opportunity in the industrial economy, facing the ‘Fourth Industrial Revolution’. However, this revolution could become a crisis rather than an opportunity in Korea’s regions due to the vulnerable structure of regional industries and economic systems in Korea. The central government has been driving innovation and growth strategies and seeking alternatives for more efficient use of assets and resources for the national growth. Of course, the role of regions and regional governments, where assets and resources are still untapped, are becoming more important. The question is how can regional governments be able to use their unused assets effectively, and one answer can be found in ‘decentralization’. However, research on decentralization, especially the innovation- driven growth strategy, which will utilize various regional assets as much as possible to lead economic growth, has not yet been conducted. 


 Thus, with this in mind, the purpose of this study is to suggest innovation-led regional growth strategies and policies based of the analysis of the determinants of decentralization and innovation activities at the regional level. To achieve this goal, in Chapter 2, we establish a research analysis framework through a theoretical review and case studies on decentralization, innovation activities and innovation-driven regional growth.   


In Chapter 3, armed with this analysis framework, we analyzed the domestic situation and issues related to decentralization and innovation-driven regional growth and overseas cases as well. Through a specialist survey on decentralization, innovation, and innovationdriven growth, we derive the realities and a set of policy implications of decentralization and innovation-driven regional growth.  


In Chapter 4, for the empirical analysis related to innovation-led regional growth, firstly, we use the generalized negative binomial regression model(GNBRRM) to analyze the determinants of innovation activity and decentralization and regional innovation system variables according to the research framework and draw policy implications. In addition, determinants were derived through an empirical analysis of innovation-driven regional growth and related variables by running a generalized least square (GLS) regression models. Finally, we surveyed regional experts to determine the actual conditions and policy demand for regional decentralization and innovation-driven regional growth, deriving additional policy implications. One of the key findings is that the determinant of innovation activity and innovation driven regional growth is decentralization.  


We conclude in Chapter 5 by raising three key policy issues based on the implications of our case studies, empirical analysis and survey, case analysis and survey, and presenting core strategies and policies for innovation-led regional growth. We expect that the analysis we present in this study of the decentralization and innovation-driven regional growth strategies and policies will contribute to the development of regional industrial economies in facing of the industrial crisis in Korean regions.