The Geographic Concentration and Locations of Korean Knowledge-Intensive Business Service Industries

Manufacturing companies have recently been seeking differentiation and profit enhancement through the servitization of products. The service economy, with the increase in its proportion of service sector in the total employment and values added, is also accelerating in the developed countries. According to these phenomena, knowledge intensive business services (KIBS), used in the production process of other companies as intermediate inputs, has played a significant role in not only strengthening global competitiveness and obtaining high value added for manufacturing industries but also economic growth and job creation for the national economy. However, the current quantity and quality of the Korean KIBS is still insufficient compared to the other developed countries, and thus the industry promotion policy is required for upgrading manufacturing industries and improving its own global competitivenessAgainst this background, this study analyzes the location pattern of the Korean KIBS industries in order to provide basic information and policy implications for developing the KIBS-based clusters. In more concrete terms, after KIBS industries are classified according to the knowledge characteristics, their spatial distribution and changes are analyzed in terms of geographic concentration by using the Ellison-Glaeser index. In addition, by performing the cluster mapping at the lower level of local autonomy, Si (cities), Gun (counties) and Gu (districts), this study identifies the specific industrial agglomerations that have potential to become a cluster in the future