This research aims to find out the outcomes of government’s local industrial development policy using a case study of Ulsan metropolitan area, which we consider a growth pole of South East Korea. Analyzing a survey research on every local firm which...
This research aims to find out the outcomes of government’s local industrial development policy using a case study of Ulsan metropolitan area, which we consider a growth pole of South East Korea. Analyzing a survey research on every local firm which participated in the government programs during the period, between 2008 and 2010, we could find that government’s policy produced some positive outcomes in areas of research activities of the firms, such as more active R&D investments, building new R&D facilities, hiring more R&D workforce, more commercialization research of technology, etc. This means that government’s subsidy for local firms worked effectively as a catalyst for innovation of the firms. Nevertheless, these growing research activities induced by government subsidy have yet resulted in the firm’s increase in sales and labor forces. Our correlation analysis shows that government policy has little impact on employment growth of the firms. In other words, government’s local industrial development policy has yet impacted on job creation, in spite of their positive impacts on R&D activities of the firms. In order to increase their impact on productivity and employment, our research suggests three implications: improving a delivery system of government subsidy for target firms, such as proper services at proper places; providing more services in areas of firm location and expansion; providing more services for workforce development so that the growth in firm’s sales result in job creation.