More than 70% of local governments outside the Seoul metropolitan area currently perceive population decline and the risk of local extinction as serious issues, and over half hold a negative outlook for the future, according to a recent survey.
The Korea Economic Association (hereinafter referred to as KEA) announced on the 19th the results of a survey on the current status and challenges of population decline and local extinction, conducted with 100 local governments in non-metropolitan areas. This survey was carried out as part of the Baby Boomer Regional Economy Boom Up project, which aims to address the decline in the working-age population and resolve regional labor shortages.
According to the survey results, 77.0% of responding local governments stated that the current level of risk regarding population decline and local extinction is high. By region, Gangwon Province recorded the highest at 85.7%, followed by Gyeongsang Province at 85.3%, Jeolla Province at 78.6%, and Chungcheong Province at 58.3%.
The main cause of population decline, as cited by local governments, was a lack of industry and job opportunities (44.2%). This was followed by housing and residential environment (21.4%), and medical, health, and care services (17.5%). In the regional infrastructure assessment, the industry and job opportunities category received the lowest score of 2.1 out of 5, highlighting the severe weakness in economic foundations.
While the vast majority of local governments outside the metropolitan area-97.0%-are implementing response policies, only 38.1% reported that these policies have been effective. Meanwhile, 54.6% of respondents evaluated the policy effects as average.
The outlook for the future was also found to be negative. 64.0% of local governments, or 6 out of 10, predicted that the risk of local extinction would be even higher in five years. As the most urgent task to overcome this crisis, 37.5% selected attracting companies, indicating a recognition that job creation is the key solution to population issues.
Meanwhile, KEA proposed a three-party alliance model as an alternative, in which retired baby boomers from the metropolitan area relocate to non-metropolitan regions and are re-employed by local small and medium-sized enterprises (SMEs).
The survey revealed that 55.0% of local governments outside the metropolitan area expect this model to help address local extinction. The main anticipated effects included population inflow and revitalization of local communities (26.0%), as well as increased regional consumption (23.0%).
For the success of this model, the most necessary policy tasks were identified as the establishment of a return-to-rural job-matching platform (25.0%) and the provision of stable housing facilities (20.5%).
Lee Sangho, Head of the Economic and Industrial Division at KEA, stated, "The gap in industry and job opportunities between the metropolitan and non-metropolitan areas is intensifying the crisis of local extinction," emphasizing, "If we expand industrial infrastructure within the regions and encourage re-employment of the retired generation, it will greatly contribute to revitalizing the local economy."
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