Why South Korea cannot rebalance growth without stronger regional clusters



Analysis Why South Korea cannot rebalance growth without stronger regional clusters Lee’s 5+3 strategy aims to build regional scale, but past relocation policies show how difficult durable clusters are John LeeSeptember 18, 2026 SHARE COPY LINK FACEBOOK X LINKEDIN MASTODON Seoul and the surrounding capital region seen from the International Space Station, April 24, 2025 \| Image: NASA South Korea’s various regional development initiatives have struggled to build regional hubs with enough productivity and economic density to counter the capital region’s self-reinforcing advantages. That helps explain why decades of relocation and redistribution have produced limited gains, and why the Lee Jae Myung administration’s “five mega-regions and three special regions” (5+3) growth strategy will depend on whether regional growth engines can become sufficiently concentrated to sustain themselves. The imbalance has proved durable. More than half of South Koreans now live in the capital region, which covers about 12% of the country’s territory, while the flow toward Seoul, © Korea Risk Group. All rights reserved. No part of this content may be reproduced, distributed, or used for commercial purposes without prior written permission from Korea Risk Group. LATEST ANALYSIS 01Samsung, SK Hynix rejection exposes South Korea’s chip-grid financing problem 02Trump’s Cheongung social media post tests Seoul’s refusal to arm to Ukraine 03Lee Jae Myung risks public trust as South Korea rewires its justice system 04South Korea turns to Central Asia as Iran war tests its energy resilience 05Houthi seizure of Mokha sharpens South Korea’s Hormuz deployment dilemma 06Japan’s stronger yen may cut Korea’s import bill while raising funding costs 07South Korea leans on Europe as Hormuz deployment choices grow narrower 08Hanwha’s Austal bid shows where South Korea’s MASGA plan may be heading

Analysis

Why South Korea cannot rebalance growth without stronger regional clusters

Lee’s 5+3 strategy aims to build regional scale, but past relocation policies show how difficult durable clusters are

John LeeSeptember 18, 2026

Why South Korea cannot rebalance growth without stronger regional clusters

Seoul and the surrounding capital region seen from the International Space Station, April 24, 2025 | Image: NASA

South Korea’s various regional development initiatives have struggled to build regional hubs with enough productivity and economic density to counter the capital region’s self-reinforcing advantages.

That helps explain why decades of relocation and redistribution have produced limited gains, and why the Lee Jae Myung administration’s “five mega-regions and three special regions” (5+3) growth strategy will depend on whether regional growth engines can become sufficiently concentrated to sustain themselves.

The imbalance has proved durable. More than half of South Koreans now live in the capital region, which covers about 12% of the country’s territory, while the flow toward Seoul,

Why South Korea cannot rebalance growth without stronger regional clusters

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John Lee