Korean
companies’ R&D outlays are surging, and the portion of the top 1,000 Korean companies’ R&D outlays versus sales has turned out to be closer to the levels of the top 1,000 global companies.
The Ministry of Trade, Industry and Energy (MOTIE) said on Feb. 12 the top 1,000 companies’ combined R&D outlays amounted to 39.3 trillion won in 2013, a 10.5 percent increase over the previous year.
The figure accounted for 84.5 percent of the private sector’s total R&D investments.
For the same period, the government’s R&D investments increased 6.8 percent.
The percentage of the top 1,000 Korean companies’ R&D outlays versus sales stood at 3.16 percent, closer to the average level of 3.2 percent for the top 1,000 global leaders, based on EU stats.
Deputy Minister Hwang Kyu-yeon of the Office of Industrial Creativity and Innovation at the MOTIE presided over a meeting on the trends of the private sector’s R&D investments on Feb. 12. The participating government ministries and organizations included the Ministry of Science, ICT and Future Planning (MSIP), the Small and Medium Business Administration (SMBA), Korea Industrial Technology Association, the Bank of Korea, Hyundai Economic Research Institute, Korea Small Business Institute, and research institutes. The participants released trends on R&D investments and how to facilitate private sector R&D investment.
The number of companies which made it to the list of the top 1,000 Korean companies in terms of R&D investments and sales stood at 327.
These companies pulled in better performances in terms of sales and operating profit than other companies. Companies which were put on the list of the top Korean 1,000 for sales, but invested nothing, numbered as many as 406. In particular, companies which did not made it to the list of the top 1,000 Korean companies in terms of R&D investments, but made it to list of sales, saw their operating profits decline 16.8 percent, whereas those which made it to the lists for both R&D outlays and sales saw their operating profits jump 7.6 percent. This shows higher investment efficiency in the case market forecasts are fully considered at the time of designing of R&D outlays.
By company, conglomerates and by industry, the manufacturing sector made more investment concentration in R&D outlays with a focus on advanced technologies. Companies with more than 1,000 employees topped the list of R&D outlays with 33.9 trillion won, followed by companies with between 300 and 999 employees (2.7 trillion won) and companies with fewer than 99 employees (700 billion won).
Among manufacturing segments, electronic parts, computer, and video/sound were the most invested segments with 23.3 trillion won, followed with the automobile/trailer segment with 5.3 trillion won, the chemical segment with 1.2 trillion won and other machinery segment with 1.1 trillion won. According to the top 12 industry classifications, electronics topped the list of R&D outlays with 19.2 trillion won, followed by automobiles with 5.3 trillion won and displays with 3 trillion won.
Deputy Minister Hwang said, “The private sector’s investments grow at steeper rate than the government sector’, so there should be both sides’ ways of promoting complementing each other.”
Given the fact R&D investments influenced corporate business environment, he added that the government will consider ways of facilitating investments on the part of companies vulnerable to R&D outlays.
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