Outcomes and Implications of the First Phase of the Public Institution Relocation Program

 

Published on April 29, 2026
Published by Public Institution Evaluation Division



 

   The Korean government implemented the first phase of the public institution relocation program to mitigate population concentration in the Seoul Metropolitan Area, a phenomenon caused by uneven regional development during the country's economic growth, and foster self-sustaining regional development. The government aimed to relocate specific institutions in the metropolitan area designated by Presidential Decree in multiple phases, implementing policies to relocate them to regional areas and promote the development of so-called 'innovation cities'. The first phase of the relocation program was completed in 2019. Against the backdrop of these policy developments, this report examines the relocation program's actual performance and outcomes compared to its initial plans.
   First, as of December 2019, 105 public institutions were relocated to innovation cities (77 institutions), Sejong City (19 institutions), and other regional areas (9 institutions). A total of KRW 9.155 trillion was incurred in relocation costs. Compared to the initial plan, the relocation period was delayed by 28.6 months and incurred an additional KRW 645.6 billion in costs. This calls for more careful review of relocation plans in future implementation.
   Second, as of the end of 2025, the number of people who migrated to innovation cities increased by 234,684 while the number of migrated individuals in relation to relocation rose by approximately 48,000. However, population growth was below expectations in some innovation cities, with several indicators falling short of targets (for example, the relocation rate for accompanying family members was 71%, satisfaction with settlement conditions 69.4 points, the supply rate of multi-family housing 94.3%, and the sales and occupancy rates of industry-academia-research clusters 81.8% and 56.6%, respectively). Gross regional domestic product (GRDP) increased overall, although the growth in a few areas (including Daegu and Jinju in South Gyeongsang) fell below the national average (33.5% from 2015 to 2022). Between 2016 and 2024, a cumulative KRW 2.507 trillion was collected in local tax revenues, contributing to regional finances.
   Third, the heads of 46 public institutions maintained the same residential addresses after relocation, and a total of KRW 199 billion was incurred for operating shuttle buses to the Seoul metropolitan area (by 60 public institutions from 2010 to 2025). Public institutions in South Gyeongsang spent the largest amount on shuttle bus operation (KRW 35.6 billion), followed by Gwangju and South Jeolla (KRW 34.5 billion), and Gangwon (KRW 28.7 billion). All 8 institutions that relocated to North Chungcheong operated shuttle bus programs. Meanwhile, the employee attrition rate rose from 2.66% prior to relocation to 3.11% after relocation, indicating the need for measures to manage voluntary resignations and job transfers at institutions that have relocated. For instance, the attrition rate at the Korea Securities Depository increased from 1.32% to 7.72%, and that at the Korea Land & Housing Corporation (LH) rose from 1.56% to 2.9%.
   Fourth, low execution rates of certain program budgets, including those for local industry development (80.7% in 2024) and support for local residents (69.9% in 2024), show the need for efforts to achieve mutual growth with local communities. Specifically, 24 institutions including KEPCO (74.3% in 2023, 77.7% in 2024) exhibited low execution rates in programs for preferential purchases of local products; 16 institutions including KEPCO (61.1% in 2023, 48.8% in 2024) also recorded low execution rates in regional talent development programs, and another 16 institutions including LH (35.9% in 2023, 24.8% in 2024) underperformed in local resident support programs. Nine institutions including the Korea National Oil Corporation (2.1% in 2023, 88.3% in 2024) showed low execution rates in the local industry development programs, and seven institutions including the Korea Tourism Organization (72.1% in 2023, 37.8% in 2024) recorded low budget execution in inter-agency cooperation programs, signifying the need for future improvements.
   Fifth, institutions that completed relocation may revise their relocation plans through deliberation by the Committee for Decentralization and Balanced Development, including plans for retaining personnel and facilities in the metropolitan area. In some cases, a large number of personnel are retained unapproved, awaiting the Committee's deliberation, which requires prompt decision making by the Committee. Relocated institutions should reevaluate their human resource management plans to ensure that unapproved personnel are relocated in principle and retention in the metropolitan area requires the Committee's approval.
   Sixth, as the current law does not specify any post-relocation management procedures and methods for relocated institutions, the law should be revised to incorporate post-management measures. Considering that additional institutions are to be relocated to regional areas in the future, the government should distinguish between institutions that have already completed relocation and those scheduled to relocate within the legal framework.
   To sum up, it is important to establish detailed relocation plans to prevent additional costs, such as those incurred from delays in the sale of previously owned real estate, and enhance the effectiveness of public institution relocation. It is also necessary to prepare measures to better manage voluntary resignations and job transfers within relocated institutions, and to address challenges in the current system where recruitment of regional talent is concentrated on graduates of a small number of universities. In regards to relocated institutions that failed to meet budget execution targets under the 2023-2024 regional development plans, efforts need to be made to meet the targets and achieve mutual growth with their local communities. Lastly, given the lack of legal provisions on post-relocation management, the Special Act on the Construction and Development of Innovation Cities must be revised to articulate post-management procedures and methods for relocated institutions.