Over the Past Decade, Approximately 40% of Chungnam's Expanded Industrial Site Area Comprised Non-Planned Sites... 'Customized Matching' Needed Between Businesses and Industrial Complexes

Chungnam's industrial site policy must shift away from corporate recruitment centered on subsidies and tax benefits toward connecting businesses and industrial complexes based on an "industrial ecosystem" that encompasses supply chains, technology, and human resources, according to a recent research report.

On the 2nd, Kim Yang-jung, Senior Research Fellow at the Chungnam Institute, published a report titled 「Strategies for Guiding Non-Planned Site Businesses into Industrial Complexes Based on Chungnam's Industrial Ecosystem」 (Chungnam Report No. 408). The report analyzes the industrial structure of businesses located on non-planned sites and their linkage with existing industrial complexes, presenting differentiated planned site guidance strategies across five major regions in Chungnam.

According to the report, over the 10-year period from 2015 to 2024, Chungnam's industrial site area expanded by approximately 15.41 million square meters. Among this increase, planned sites accounted for about 9.28 million square meters, while non-planned sites accounted for about 6.12 million square meters—meaning non-planned sites represented approximately 40% of the total expansion area.

While non-planned sites offer the advantage of allowing companies to locate in their preferred regions quickly and autonomously, the spatial dispersion of businesses can weaken inter-industrial linkages and agglomeration effects. This dispersion can also lead to issues such as duplicate provisioning of infrastructure (roads, water supply, power), increased environmental management costs, urban sprawl, and land-use conflicts with surrounding areas, the report noted.

The research team diagnosed that existing policies encouraging companies to move into industrial complexes have relied relatively heavily on economic incentives such as relocation subsidies, tax reductions, and discounted sale prices.

While such approaches help lower relocation costs for businesses, they can intensify competition for corporate recruitment among local governments and cause businesses to choose locations based on the scale of financial support rather than industrial connectivity and agglomeration effects, the report stated.

Senior Research Fellow Kim emphasized, "When companies actually decide on a location, they comprehensively consider not just costs, but also the procurement of raw materials and parts, accessibility to major customers, securing professional talent, R&D and technological collaboration, logistics infrastructure, and the use of communal facilities. Therefore, the core incentive of Chungnam's industrial site policy must transition from 'incentives' to the 'industrial ecosystem'."

In particular, this study evaluated Chungnam's five major industrial regions based on two criteria: similarity to existing planned industries and the likelihood of occupancy in industrial complexes, thereby refining region-specific strategies.

The analysis revealed that the Chungnam Innovation City Region scored 60% in industrial similarity and 80% in industrial complex occupancy potential, indicating a relatively high possibility of integration with the existing industrial ecosystem among the five regions. The report suggests actively identifying and "intensively guiding" non-planned businesses—particularly in automobiles and electronic components—that have high transaction and supply chain connectivity with companies in existing industrial complexes.

The Northern Smart Industry Region and the National Defense Wellbeing Industry Region each scored 50% in industrial similarity and 80% in occupancy potential. For these two regions, rather than prompting a blanket relocation of non-planned businesses, a "selective guidance" strategy was proposed, focusing on companies with high connectivity to existing core industries and supply chains.

Conversely, the Marine New Industry Region scored 30% in industrial similarity and 60% in occupancy potential, while the K-Bio Industry Region scored 40% and 60%, respectively. This indicates a need for a "specialized management" strategy that builds industrial ecosystems centering on regional specialization sectors such as marine/fishery equipment, bio, food, and fine chemicals.

As a core policy, the research team proposed establishing a "Business-Industrial Complex Matching System"—a method that builds a database on the sectors, products, supply chains, transaction relationships, and business scales of companies currently occupying industrial complexes, and links this data with information on non-planned site businesses.

The researchers stated that instead of merely supporting the relocation of businesses already located on non-planned sites, Chungnam Province and its municipal governments should provide industrial ecosystem information and guide companies toward suitable industrial complexes from the initial stage of searching for new factory sites, thereby preemptively reducing dispersed corporate locations.

Senior Research Fellow Kim stressed, "Future corporate attraction will no longer depend on which region offers larger subsidies, but rather on which industrial complex can provide an industrial ecosystem more suitable for corporate growth. Chungnam Province needs to move beyond a policy that simply places companies inside industrial complexes and transition toward a policy where businesses themselves choose industrial complexes upon seeing the benefits of the industrial ecosystem."

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