[EAI Governance Studies 4] Urban Competitiveness and Quality of Life in Pyeongtaek City

EAI Governance Studies Working Paper No. 4

Authors

Lee Gon-su (李坤洙) is a Senior Research Fellow at the Governance Research Team, East Asia Institute, and an Adjunct Professor in the Department of Public Administration at Daegu University.

Kim Byung-kyu (金炳圭) served as a Research Professor at Daegu University and is scheduled to be appointed as a full-time lecturer in the Department of Public Administration at Andong National University starting in the 2012 academic year.

I. Introduction

With the advancement of globalization, urban competitiveness has emerged as a key factor determining the success or failure of national competitiveness. Consequently, countries worldwide are making significant efforts to enhance the competitiveness of their cities amidst the trend of boundless globalization. Various strategies are being implemented not only for large cities with well-developed urban infrastructure and business environments, such as New York, Washington, Paris, Milan, and Barcelona, but also for small and medium-sized cities possessing unique strengths. Competition is intensifying not only between nations but also between cities and regions within a nation. In Korea, since the full implementation of local autonomy, all local governments have been striving to enhance the competitiveness of their respective regions. High urban competitiveness can lead to increased corporate investment, subsequent population influx, and revitalization of the local economy; however, cities lacking competitiveness will face decline. In this regard, strengthening urban competitiveness has become a matter of survival for cities (Choi Yu-jin and Hong Jun-hyun, 2007).

What, then, constitutes a competitive city, and what strategies should be employed to secure a competitive advantage? To answer these questions, it is fundamentally necessary to accurately assess the level of competitiveness possessed by a specific city. Only by thoroughly diagnosing the conditions of individual cities can effective urban development policies be formulated and implemented. In this context, research on urban competitiveness assessment has been actively conducted since the 1990s. These prior studies have generally focused on international city indicators related to the global competitive environment, comparing and evaluating the international competitiveness of major domestic and international cities (Kang Seung-ho, 2007; Kang Seung-ho and Kim Jung-yeop, 2009; Kim Won-bae et al., 2007; Kim Hyun-joo et al., 1997; Im Byung-ho, 2007), or have set spatial scopes targeting domestic cities and evaluated the competitiveness of individual cities or regions (Kwon Chang-ki et al., 2008; Kim Byung-soo and Yeo Hong-gu, 2010; Lee Sang-dae et al., 2008). However, a problem inherent in the analysis of competitiveness for single cities within a certain region or the evaluation of urban competitiveness at a national level is the comparison of cities of vastly different scales on the same footing. Unless the sole purpose is to rank cities, a simple comparison of cities at entirely different levels can lead to the underestimation of small and medium-sized city competitiveness or the overestimation of large city competitiveness. Furthermore, in our context, where unbalanced growth has occurred with a focus on large cities and the Seoul metropolitan area, diagnosing urban competitiveness without considering differences in scale can distort evaluation results. Therefore, how the reference group for comparison is established is crucial. To objectively measure competitiveness factors such as the strengths or comparative advantages of each city, it is necessary to evaluate them using cities of similar scale as reference targets.

With this problem in mind, this study aims to objectively evaluate the urban competitiveness of Pyeongtaek City as a case study and derive policy implications for enhancing competitiveness based on the results. Pyeongtaek City, located at the southernmost tip of Gyeonggi Province, is a city with a mixed urban-rural character, covering an area of 455,180,303㎡ and a population of 423,441 (as of June 2011). However, it exhibits the characteristics of an industrially growing city, with a Gross Regional Domestic Product (GRDP) of 14,240,505 million won and a per capita GRDP of 17,688 thousand won in 2008. With the decision in 2006 to relocate the U.S. military base in Korea to Pyeongtaek, large-scale regional development projects are underway. Recently, it has emerged as a hub for new growth advanced industries with investments from Samsung Electronics and LG Electronics, as well as the entry of Japanese companies. Furthermore, the Yellow Sea Free Economic Zone, centered around Pyeongtaek-Dangjin Port, which is growing as a hub for trade with China, is also under development. Amidst these circumstances, discussions regarding the role and value of Pyeongtaek City in enhancing national competitiveness and promoting balanced regional development are gaining prominence. For these discussions to be productive, an objective diagnosis of Pyeongtaek City's competitiveness must precede. Based on this recognition, this paper aims to construct evaluation indicators by reviewing prior research on urban competitiveness assessment, then compare and evaluate Pyeongtaek City's urban competitiveness using domestic intermediate-sized cities with populations between 300,000 and 1 million as the reference group, and finally discuss implications for urban development.

II. Theoretical Background of Urban Competitiveness Assessment

Unlike national competitiveness, which has primarily been discussed in economic terms, urban competitiveness has been addressed from a more diverse range of perspectives. Fundamentally, urban competitiveness involves assessing comparative advantages in competition among various cities. Therefore, defining the power that allows a city to gain an edge over others is paramount. Lever (1993) argued that in the context of inter-city competition for attracting corporate investment, international financial institutions, international organizations, and events as multinational corporations seek new factory and office locations across borders, urban competitiveness, defined as the "power to attract investment and population," includes not only the economic characteristics of a city but also the quality of services such as culture and entertainment facilities, environment, housing, education, and healthcare. Domestic studies also view urban competitiveness from perspectives ranging from "the degree to which a city has a comparative advantage in improving its economic conditions, continuously enhancing the lives of its residents, and linking to human development" (Kim Hyun-joo et al., 1997) to "the total potential of a city, including its industrial competitiveness and the human resources and integration within the urban society, as factors created individually or collectively by local government, corporations, and urban residents based on the human and material resources possessed and mobilized by a region" (Choi Yu-jin et al., 2007), or further expanding to the comprehensive concept of "the totality of a city's social, cultural, economic, and physical foundations accumulated within its natural and artificial environment, and the capacity of its citizens, corporations, and city government, as the subjects of urban activities, to create future value upon these foundations" (Kang Seung-ho, 2008).

While various definitions have been proposed, the core of the concept of urban competitiveness can be understood as "comparative advantage and attractiveness for attracting population and capital," which can be compared across diverse aspects such as economy, finance, culture, and quality of life. The goal of a city is not merely to strengthen industrial competitiveness but to achieve ultimate values such as quality of life and sustainable development. Therefore, urban development should be understood not only as economic growth but also as the maintenance and development of residents' quality of life and the functional characteristics of the city (Kim Won-bae et al., 1997). Ultimately, the outcomes related to production and quality of life generated by a city determine its competitiveness, and a city's competitiveness can be secured only when systems in politics, economy, society, and culture are appropriately established (Kim Jung-pyo, 2009). However, how to define and operationalize the sources of urban competitiveness remains a difficult issue. For this reason, Choi Yu-jin et al. (2007) approach the measurement of urban competitiveness with a narrower definition: "a state where a city's internal efficiency and external capacity are superior to other cities." Kim Jeong-ho (2008) expands this further, advocating for an approach based on five aspects: citizens, economy and industry, urban infrastructure, environment, and governance. Empirical studies on regional competitiveness assessment often understand urban competitiveness by applying the conceptual framework of 'sustainability' or 'quality of life,' and tend to evaluate urban competitiveness using various social, economic, cultural, and urban infrastructure indicators for cities of a certain scale.

For example, Yoo Jae-yoon and Cho Pan-ki (1996) posited that urban competitiveness originates from the natural environmental conditions, the accumulated urban infrastructure from the past, and the capabilities of urban actors such as citizens, corporations, and government in developing and utilizing them. They classified urban infrastructure into social/cultural, economic, and physical foundations, and added urban actor capabilities and natural environment, selecting 15 indicators across 5 domains. The Korea Management Association (1999) utilized 46 indicators across 3 assessment domains—urban management resources and infrastructure, urban internal management activities, and urban management performance—to evaluate the competitiveness of domestic small and medium-sized cities. The Korean Planners Association (2001) used 45 indicators across 4 domains: living space, workspace, leisure space, and breathing space. The Daejeon Development Institute (2007) utilized 27 measurement indicators across 10 domains: population, urban economic power, R&D capacity, education, culture and leisure, urban infrastructure, social welfare, environmental safety, internationalization, and civic consciousness. Im Byung-ho and Lee Jae-woo (2008) expanded the specific measurement indicators for these 10 domains to 71. Lee Sang-dae et al. (2008) used 48 indicators across 6 domains: productivity, economic growth, employment, land resources, market size, and knowledge level. Kwon Chang-ki et al. (2008) utilized 31 indicators across 3 domains: physical, economic, and socio-cultural indicators. Kim Jung-pyo (2009) measured urban competitiveness by selecting 49 indicators across 6 domains: education and welfare, culture and tourism, economy, physical infrastructure, urban actor capabilities, and natural environment. In contrast, Kim Won-bae et al. (2007), who attempted qualitative analysis, used only 8 detailed indicators across 4 domains: human knowledge resources, economic structure, spatial infrastructure resources, and socio-cultural resources.

Due to the comprehensive nature of the concept of urban competitiveness, the components and measurement indicators of urban competitiveness vary depending on the researcher's perspective or emphasis. However, most quantitative research, excluding qualitative studies, follows a similar pattern in terms of measurement methods. That is, most studies attempt a comprehensive evaluation by calculating factor scores using standardized scores for measurement indicators or factor analysis, and then assigning weights to each factor to measure the final urban competitiveness score. The sensitive issue here is how to set the weights. In fact, even when evaluating using the same urban competitiveness indicators, the evaluation results can differ depending on how weights are assigned to each indicator. Prior studies have mostly used either statistical methods or expert surveys to set weights. The statistical method using factor analysis sets weights based on the attributes of the data itself, while the AHP analysis based on expert surveys has its own advantages and disadvantages due to its subjective approach (Im Byung-ho and Lee Jae-woo, 2008).

[Table 1] Measurement Indicators and Methods for Urban Competitiveness Assessment

Ultimately, it can be understood that selecting evaluation indicators and setting weights are of utmost importance for appropriately assessing urban competitiveness. Even when evaluating the same cities, the competitiveness ranking of cities can change depending on which evaluation indicators are used for measurement, and since the assignment of weights to evaluation indicators is highly controversial, objectivity must be maintained to the greatest extent possible. In this regard, the composition of the evaluation model needs to consider representativeness, data availability, comparative objectivity, reproducibility, and simplicity (Daejeon Development Institute, 2007; Korea Management Association, 1999). Representativeness refers to selecting evaluation indicators that can specifically represent the areas of interest in each domain. Data availability means that indicators must be technically measurable and practically easy to obtain data for. Comparative objectivity means selecting items that allow for inter-city comparison and maintain uniformity. Reproducibility means selecting reliable items that are independent of temporal changes or biased regional application. Simplicity means that the meaning of the indicator items should be conveyed as concisely and accurately as possible.

III. Methodology

1. Urban Competitiveness Evaluation Model and Data Collection

This study constructed an evaluation model based on indicators verified in previous studies, while adhering to criteria for indicator selection that align with the research objectives. The indicator system for urban competitiveness assessment consists of three domains: physical infrastructure indicators, economic indicators, and social/cultural indicators, with detailed indicators specified. The criteria for selection were: first, the indicators must be able to accurately measure urban competitiveness in terms of validity and reliability and yield the same measurement results under any circumstances; second, in terms of accuracy and objectivity, they must be free from bias or stereotypes and be universally comprehensible; third, in terms of clarity, indicators should be selected based on those that are clear and understandable; and finally, they must be practically easy to apply in evaluations and capable of providing feedback for urban competitiveness enhancement.

Detailed examination of the selected measurement indicators reveals that physical infrastructure indicators included transportation, energy, water and sewage treatment facilities, number of public officials, and number of government offices. For transportation, road paving rates and parking space areas, which represent convenience, were considered. Regarding energy and water and sewage treatment, water supply rates, sewage supply rates, waste treatment volume, energy consumption, and gas supply volume were considered. Furthermore, the number of public officials, who are the subjects of administrative service delivery, and the number of government offices, an indicator of administrative accessibility, were considered in measuring the administrative service infrastructure.

Economic infrastructure indicators reviewed included those related to city size, key economic indicators, industrial structure, and productivity indicators. To measure city size, population growth rate, housing supply rate, and building permit area were considered. Key economic indicators included per capita local tax and per capita GRDP as indicators related to income, and job security rate in relation to employment. As indicators of industrial productivity, per capita GRDP by employed person was considered. For industrial structure indicators, the proportion of the tertiary industry, business establishment growth rate, and number of environmental pollution discharge facilities were considered. Additionally, the number of financial institutions per capita was included as other economic indicators.

Social and cultural infrastructure indicators reviewed included those related to education, culture, medical care/health/welfare, public safety, and internationalization. For education indicators, the number of students per class in elementary, middle, and high schools, and the number of teachers per 1,000 elementary, middle, and high school students were considered as indicators of public education. In addition, the number of private academy classrooms and the childcare facility provision rate were considered as indicators of private education. Regarding cultural indicators, the public performance facility provision rate and the number of books in public libraries were considered. For medical care/health/welfare indicators, the number of medical personnel per capita, the number of hygiene-related establishments per capita, the number of residents in social welfare facilities per 1,000 population, and the social welfare facility provision rate were considered. Furthermore, the crime occurrence rate was considered as a public safety indicator, and cultural and ethnic diversity was included as an internationalization indicator... (continued)