The government has unveiled its plans for a second round of relocating public agencies out of the capital region, along with a broader overhaul of their functions. The idea is to minimize the number of agencies remaining in the Seoul area and cluster them around existing innovation cities, while linking regional industries, talent and living conditions to growth engines organized under a framework of "five hubs and three special zones" — the capital region, the southeastern region, the Daegu-North Gyeongsang region, the central region and the Honam region, plus the special self-governing provinces of Gangwon, Jeonbuk and Jeju. Yet it is questionable whether this will overcome the limits of the first round, or simply become "Innovation City version 2" in name only.
According to the Ministry of Data and Statistics, net migration into the capital region remained positive through 2010 during the 2005-2019 period when the first round of relocations was carried out, then turned negative for the first time in 2011. From 2017 it reverted to net inflows, which have continued to this day. Among young adults aged 19 to 34 in particular, there has not been a single year of net outflow over the past two decades. Regardless of age group, more than 60% of those moving to the capital region cited jobs and family as their reasons — an overwhelming share. In a sense this was inevitable: when a public agency sold its former headquarters in the capital region, it effectively meant that another facility, institution or housing development moved into that building or site.
It is not only population inflows that are at issue, but also the quality of employment. Data from the Korea Employment Information Service show that the share of workers in "good jobs" — those in the top 20% of wages by occupation — rose in the capital region while falling outside it. The gap has widened further over the past decade. Media reports on labor conditions found that 46.8% of the nationwide increase in employment between 2013 and 2023 was concentrated in the capital region. This suggests the polarization of jobs has not improved. As a result, there is considerable room to dispute the government's claim that relocating public agencies has increased businesses and employment around innovation cities and established linked industries as core regional industries. It may be more accurate to say the effect has been limited to some areas, and one has to wonder whether the government's assessment is overly optimistic.
If the second round is not to repeat the same path, the goals and outcomes of relocating public agencies must be defined not by superficial figures such as the number of agencies moved or the number remaining in the capital region, but by the substantive concept of how an agency's location contributes to regional and national growth. It is also important to reexamine the siting strategy, to guard against repeating the mistake of building agency offices, apartment complexes and commercial buildings full of vacancies in areas cut off from existing downtowns under the "innovation city" label — an approach that, far from reviving declining older city centers, could end up choking off what life they have left. What this requires is fundamental deliberation on optimal placement: not "how many agencies should be moved," but "where should they be located to deliver the greatest results for the country and the region."
Financial functions are the clearest example. Finance is not an industry that belongs to or matches any particular region; it is common infrastructure that supports all of them. Trade insurance provided by the Korea Trade Insurance Corporation, for instance, works by channeling funds from domestic and overseas private financial institutions into exports and overseas project contracts. Without direct lending, it converts private money into large-scale, long-term policy finance through insurance and guarantees. Because winning strategic projects in defense, nuclear power and plant construction — sectors emerging as core industries for Korea — requires financing on a large scale, the contracting, financing negotiation and review stages all entail continuous working ties with domestic and foreign banks, foreign embassies and overseas project owners, and legal and accounting advisers. Since such policy finance is a foundational instrument both from the perspective of the national economy and for the balanced development of each region's growth engines, the direction chosen should maximize its effectiveness. The conditions needed for these functions to work effectively, such as the financial market ecosystem, also deserve scrutiny. Serious thought is needed as to whether emphasizing departure from Seoul and dispersal to the regions unconditionally, while disregarding these characteristics, risks extinguishing the country's momentum to grow as a global financial hub.
Relocating public agencies should not be a policy of changing addresses, but a policy of optimally placing a range of functions with regional and national growth in mind. Before discussing settlement support or compensation premised on relocation, the government should first actively establish how each agency actually contributes to the national economy and to markets. In some cases relocation may be the answer; for some agencies, strengthening their role and competitiveness under current conditions may be more effective. Such a broader approach is not a retreat from balanced development but an essential precondition for securing outcomes that match the policy's purpose, based on the experience of the first round.
