Jeong Byeong-seon Vice Minister: "We Will Prevent R&D Restructuring Due to COVID-19 Impact"

[Asia Economy Reporter Junho Hwang] "The government will support corporate R&D activities to prevent restructuring of research and development (R&D) personnel caused by the COVID-19 crisis."

Jeong Byeong-seon, the 1st Vice Minister of the Ministry of Science and ICT, stated this during an online meeting with three corporate R&D support organizations and over 20 technology-based growth companies, saying, "Due to the economic crisis caused by COVID-19, a reduction in corporate hiring is expected."

Urgent Need for 'Corporate R&D Support Measures' Amid COVID-19 Impact

At the meeting, Vice Minister Jeong shared the results of the "Survey on Corporate R&D Status Due to COVID-19" and listened to the voices of companies. R&D companies, including general companies (corporate research institutes), R&D service companies, and research institute companies, expressed difficulties and suggestions caused by COVID-19, and Vice Minister Jeong pledged to seek customized support measures for each company.

During the session, companies requested government support measures for national R&D projects. They asked for easing of cash burden rates, temporary extension of project periods, early commencement of government R&D projects, permission for changes in research plans, and extension of technology fee payment periods. The Korea Research and Development Service Association responded that expanded tax support for R&D service companies and increased recognition rates for indirect costs are necessary. The Research and Development Special Zone Promotion Foundation proposed support for commercialization of invested and transferred technologies, as well as domestic and international marketing and networking support.

80% of Companies Reduce R&D

According to the corporate R&D activity survey, 80% of companies reported negative impacts on their R&D activities due to COVID-19. By company type, 87.7% of R&D service companies, 79.8% of corporate research institutes, and 73.6% of research institute companies evaluated the impact as negative.

Corporate R&D investment plans are generally expected to shrink. It is projected that 85% of R&D service companies, 68% of research institute companies, and 48% of corporate research institutes will reduce their investments.

Regarding corporate research personnel hiring plans, 71% of research institute companies, 63% of R&D service companies, and 41% of corporate research institutes said they would reduce hiring. A survey on employment retention subsidies was also conducted exclusively for financially strained R&D service companies; among the 171 respondents, 49% were aware of the support system, and four companies had applied for it.

Vice Minister Jeong stated, "We will continuously maintain close communication with corporate research sites to steadily discover and improve customized support measures for companies."

This content was produced with the assistance of AI translation services.