Balanced Growth of Regional Economies in the Knowledge-based Economy: Why and How

摘要

This paper discusses the issue of balanced regional development both in terms of knowledge-based or digital economy and national competitiveness. First, we look at the possible relationship between the balanced regional development and national competitiveness. We want to know how they are related each other. The understanding so far is that the latter may be affected negatively by the former or is not related with it. This paper shows that balanced regional economic development improves the efficiency of national economy, the degree of which may be measured by the distribution of the marginal productivity of capital of regional economies. That is, the balanced development of regional economies is a necessary condition to maximize national competitiveness. And the fact that the current economy is knowledge-based has interesting policy implications on this issue.While the result of this paper could be applied to any countries experiencing unbalanced growth, we apply it to Korean economy. Korean government has been trying to fix the problem of unbalanced development among regional economies in Korea. There are, however, no rigorous discussions about what balanced development means, its benefit and costs, basically why it is necessary and how it can be achieved. Without answering them, the policy effort of balanced regional economic development may cause time and resource-consuming conflicts among selfish regional economies. In the hope that Korean government and people may choose the correct policies for balancing regional economies, this research paper aims to answer these questions.