Rep. Lee Jin-bok of the ruling Saenuri Party.

Rep. Lee Jin-bok of the ruling Saenuri Party has proposed the need to develope a model of evaluating the intellectual property rights trade balance to get rid of the yoke of the perennial intellectual property rights trade deficit. He made the proposal while auditing the Korea Intellectual Property Office (KIMPO) last year, saying that “Korea is an intellectual property rights importing country.” 

The following are excerpts of an interview between NewsWorld and Rep. Lee, a ruling party leader of the National Assembly Trade, Industry and Energy Committee, in which he spoke of the government’s scheme to nurture 19 top future growth engines and other policies. 

Question: Will you tell our readers about the current status and prospects of a scheme to nurture Korea’s future growth engine industries?

Answer: Korea’s mainstay industries, including semiconductor, automobile and shipbuilding, have so far suffered a setback due to a glut in the global market and the weakening of competitiveness, so the need for cultivating future breadwinner industries has already become a much talked-about topic. Early this year, the government decided to expand and nurture 19 future growth engines by consolidating existing future growth engines and “industry engine” projects. The revision calls for investing 5.6 trillion won by 2020 with the goal of fostering new industries whose exports will stand at $100 billion by 2024. 

Korea expects to seize global markets in advance of other rivals in the top 19 future growth engine arenas, including intelligent robots, smart automobiles, deep-sea marine plant engineering and intelligent semiconductors, in which advanced technologies are converged in a multidisciplinary fashion at a fast pace. 

Q: Will you elaborate on the outlook of future automobiles, depending on electricity or hydrogen, to cope with environment issues in the wake of the Volkswagen scandal of cheating car emissions?

A: Diesel cars produced by Volkswagen are programmed to keep exhaust emission reduction devices in operation only when they are tested by the U.S. Environmental Protection Agency to determine whether they meet emission standards. The usual operation of the exhaust emission reduction devices means a drop in efficiency, losing the strength of diesel cars, and in a worse position to compete with electric vehicles or hydrogen cars. EVs or hydrogen cars have a more competitive edge in the wake of the scandal. The bottom line is that given global trends of more stringent environmental restrictions, electric vehicles and hydrogen cars will be developed. If the higher costs of EVs or hydrogen cars are fixed, the industries will make strides exponentially. 

Q: Will you comment on the 7th basic plan for power supply and demand, which calls for ramping up low-carbon power mix in connection with Korea’s Post-2020 climate change mitigation commitments?

A: Many controversies brewed over the recent disclosure of Kori Nuclear Power Unit 1 and the construction of new nuclear power units, but they are still under way. 

But the reality is that for Korea, nuclear power’s role in ensuring a stable supply of electricity is important, and it cannot be overemphasized that it’s a way of mitigating climate change, since power generation utilizing new and renewable energies is insufficient. 

For Japan, the public has misgivings in the wake of the Fukushima nuclear power accident. We have to make the most of nuclear power with a focus on ensuring safety until new models of generating electricity other than nuclear power are explored. 

Q: Did you touch on the need for relaxing the limited supply of LPG vehicles in consideration of Korea’s entry into the global LPG vehicle market?

A: Currently, the use of LPG vehicles is limited to the handicapped, persons who have contributed to national development (of national merit), taxis and rental cars. Behind the limited use of LPG cars was an unstable supply of LPG. The handicapped and persons of national merit have been allowed to benefit from reasonable LPG prices. 

But things have now changed: There is a stable supply of LPG. Given the surging LPG supply, the subsidiary outcome of the development of shale gas, LPG prices are forecast to drop. In consideration of LPG oversupply and LPG’s eco-friendliness, the supply of LPG cars needs to be expanded. 

True to a global trend of developing and spreading eco-friendly LPG cars, Korea, one of the countries with LPG car production technology, needs to expand the market by expanding the use of LPG cars. 

Q: What about strategies to nurture electric/electronics industries with ICT convergence technologies?

A: The competitiveness of the future electric/electronics industries hinges on the way they can be handled at ease. For instance, such convergence technologies combining ICT and electric/electronics industries as the one of storing and retrieving electricity whenever necessary are core parts of smart grids. Korea, a late-comer, has lots to do for the development of the energy storage systems (ESS) and new and renewable energy sectors than advanced countries. It costs a massive amount of money, so the private sector cannot handle all things on its own. But the government-invested projects have both sides of the coin. For instance, the government has introduced the renewable portfolio standard (RPS), a system to nurture the new and renewable energy industry, but many power companies are saddled with an additional burden of shouldering hefty penalty charges standing at millions of won. This situation is the side effects of the government’s one-sided policies, so the government needs to establish policies after considering the private sector’s views fully. 

Q: What are your views on the current status and prospects of nurturing the aviation industry in connection with the United States’s refusal of transferring technology in the relation of the development of KF-X, a project to develop an advanced multipurpose fighter?

A: I’ve heard that the Defense Acquisition Program Administration (DAPA) and Lockheed Martin are holding working-level talks on the issue of the United States’ not allowing the transfer of core technologies in the project. I expect better outcomes from the talks. 

The Korean aviation industry is now poised to enter the growth stage by exporting homegrown T-50 and KT-1. Now is the time when the industry is aggressively stepping on the gas to make inroads into foreign markets. The industry aims to chalk up $20 billion in production and $10 billion in exports in 2020, with the goal of rising to a global top-seven aviation nation. It has a target of 300 aviation firms and employing 70,000 people.

The industry is grappling with such woes as limited growth related to companies’ securing of R&D and production funds, and the easing of an industrial structure, dominated by large-sized companies. Those have emerged as policy tasks. 

Q: Will you explain projects to provide support to SMEs developing technologies and exploring overseas markets?

A: The government has set aside 957.4 billion won for the 2015 project to provide financial support to SMEs in the development of technologies. The project is designed to offer a helping hand to startups and SMEs, which try to commercialize technologies in a short period of time, raising their technological competitiveness. In particular, the provision of R&D funds is made according to growth stages — startups, SMEs and mid-size superstars/global companies. The project will provide less than 75 percent of all costs related to technology development in a two-year period. 

The project for providing support to SME’s exploring of overseas markets calls for financing 143.5 billion won to SME exporters, which have insufficient overseas marketing capabilities and specialized exporting manpower, or those which have come upon hard times in exploring overseas markets. 

Q: Is the government’s appropriating of R&D budgets the right thing to do? What steps are in place to support technology commercialization?

A: The government budget for supporting SMEs’ R&D activities was 2.545 trillion won, accounting for a 14.4 percent share of the government’s total R&D budget of 17.7 trillion won. Figures released by the Small and Medium Business Administration (SMBA) showed that SMEs’ R&D success rate stood at 95.6 percent, but the figure dropped to 50 percent for commercialization, a task that is undergoing a complete overhaul. The parliamentary audits of the government have revealed such problems as the misappropriation of R&D funds and overlapping R&D tasks. 

The government should take steps to strengthen surveillance against companies suspected of misappropriating R&D funds or funneling R&D money into so-called zombie companies.

Q: What steps does the government implement to ramp up competiveness for gaining patents?

A: Korea is an intellectual property rights importing country, as the nation suffers a trade deficit in terms of intellectual property rights every year. The problem plaguing the nation is that Korea has no model of evaluating a trade balance in terms of intellectual property rights. 

While speaking at a parliamentary audit into the Korea Intellectual Property Office (KIMPO) last year, I suggested the need for the development of a model to evaluate the actual intellectual property rights trade balance. The goal would be to get rid of the yoke of perennial intellectual property rights trade deficits. 

SMEs have insufficient awareness of intellectual property rights, and they tend to have fears of disclosing their technologies when they gain patents. The KIPO commissioner will have to educate SMEs toward awareness toward intellectual property rights and overhaul a public patent attorney system to save costs related to SMEs’ patent rights in order to ramp up competitiveness in the intellectual property rights sector.

Rep. Lee Jin-bok of the ruling Saenuri Party touches on the government’s plan to nurture 19 top growth engines. (Photos:Rep. Lee Jin-bok's office)