SME Research and Development Shows High Dependence on Military Service Special Cases

52% of Male Young Researchers with Master's and Doctorate Degrees Serve as Specialized Research Personnel

Proportion of Professional Researchers Among Male Young Researchers with Master's and Doctorate Degrees in Small and Medium Enterprises

[Asia Economy Reporter Kim Cheol-hyun] A study has found that small and medium-sized enterprises (SMEs) heavily rely on military service special cases when securing young researchers. According to the report "Analysis of the Effectiveness of the SME Specialized Research Personnel System and Policy Tasks" released on the 19th by Research Fellow Noh Min-seon of the Small and Medium Business Research Institute, 52% of young male researchers with master's or doctoral degrees working in SMEs serve as specialized research personnel. SME specialized research personnel are holders of master's or doctoral degrees in science and engineering who serve for three years as researchers at company-affiliated research institutes selected as military service designated companies, substituting their military service obligation.

The concentration of corporate research and development (R&D) investment in large corporations has increased from 72.0% in 2008 to 77.6% in 2018, and the top five companies invest more than twice the R&D expenditure compared to all SMEs combined, deepening the polarization of private R&D investment. In this situation, SMEs plan to significantly reduce activities such as R&D investment and new researcher recruitment due to the COVID-19 pandemic. The importance of specialized research personnel is expected to grow further.

According to the analysis, the utilization of specialized research personnel serving in SMEs is estimated to increase the sales revenue per SME by 1.77 billion KRW, assuming other conditions remain the same. Examining the economic ripple effects of SME specialized research personnel, the production inducement effect in 2019 was 3.884 trillion KRW, and the employment inducement effect was 15,011 people. The value-added inducement effect was 1.7624 trillion KRW, accounting for 0.092% of the nominal Gross Domestic Product (GDP) in 2019. By industry, the economic ripple effects in software development supply and industrial design, electrical and electronics, and life sciences were relatively larger compared to other sectors.

The proportion of SME researchers outside the Seoul metropolitan area is very low for specialized research personnel (11.5%) compared to general researchers (31.3%). In particular, the proportion of SME specialized research personnel outside the metropolitan area has decreased by 4.3 percentage points over the past five years. Additionally, more than half (50.4%) of SME specialized research personnel leave their positions on or before the expiration of their service period. Only 33.3% remain employed for more than one month after the service period ends.

Research Fellow Noh Min-seon emphasized, "Securing R&D innovation capabilities in SMEs is crucial to overcoming the COVID-19 economic crisis," and added, "It is necessary to explore policy measures to utilize outstanding talent in science and engineering fields as specialized research personnel in SMEs outside the metropolitan area." Research Fellow Noh also explained, "The fact that a significant number of specialized research personnel serving in SMEs leave on the day their service period expires reflects a perception similar to military discharge." He proposed as a priority task supporting doctoral program enrollment for specialized research personnel who continue working at the respective SME after their service period ends and establishing a new Tomorrow Savings Deduction product targeted at specialized research personnel.

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