Relief for Large Corporations' R&D Burden... Additional 200 Billion KRW Support After VC Verification

by Moon Chaeseok

Published 15 Sep.2020 11:00(KST)

Ministry of Industry Announces '7th Technology Transfer and Commercialization Promotion Plan'
Critical Focus on Commercializing Excellent Technologies... "Bridging the Gap Between Technology and Market"
Joint Establishment of Technology Holding Companies by 4 Ministries... Creation of 1.55 Trillion Won Fund

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy visited the College of Engineering at Seoul National University in Gwanak-gu, Seoul, on July 22 to observe the progress of the "Alchemist Project." The Alchemist Project is a research and development program that supports challenging and innovative technologies with disruptive potential. On the 15th, the Ministry of Trade, Industry and Energy announced the "7th Technology Transfer and Commercialization Promotion Plan" to connect excellent ideas and technologies to concrete commercialization and profits. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The government announced that when large corporations participate in government research and development (R&D) projects, their matching contribution rate will be eased to 33%, the level applied to small and medium-sized enterprises (SMEs). Projects verified through venture capital (VC) for R&D outcomes will receive an additional 192.5 billion KRW in support over eight years.

On the 15th, the Ministry of Trade, Industry and Energy held an online meeting of the 'Pan-Ministerial Technology Transfer and Commercialization Policy Council' and announced the '7th Technology Transfer and Commercialization Promotion Plan' through 2022.

The plan was established by integrating the technology transfer and commercialization policy directions of 15 ministries and agencies, including the Ministry of Science and ICT, Ministry of Education, Ministry of SMEs and Startups, Ministry of Land, Infrastructure and Transport, and the Korean Intellectual Property Office.

◆Creating Outcomes by Considering Commercialization from the Planning Stage

Source: Ministry of Trade, Industry and Energy

This plan presents concrete strategies and methods to 'commercialize' excellent technologies. To promote market-demand-driven technology commercialization, three major strategies were established.

The three strategies are 'Smart Up' (considering commercialization from the planning stage and creating excellent R&D outcomes centered on demand), 'Speed Up' (rapid matching between technology suppliers and demanders), and 'Scale Up' (expanding investment, supporting regulation and certification, and increasing utilization of public funds).

◆Encouraging Large Corporations to Participate in Government R&D... Additional Support after Private Verification

Source: Ministry of Trade, Industry and Energy

The core is to ease the burden on large corporations and establish a system where projects with high success potential are pre-verified in the private market.

This year, more than 60% of the Ministry of Trade, Industry and Energy's materials, parts, and equipment R&D projects are being promoted as demand-driven projects, and when large corporations participate, the matching contribution rate is reduced to 33%, the level for SMEs.

One-year commercialization consulting is provided to support private VC pre-investment. For projects that actually receive VC investment, an additional 192.5 billion KRW will be supported over eight years starting next year.

To help domestic companies enter the global value chain (GVC), the support fund for joint R&D projects with overseas institutions will increase from 1 billion KRW this year to 5 billion KRW next year.

◆Easing Technology Transfer Regulations... Establishing a 1.55 Trillion KRW Technology Commercialization Fund

Source: Ministry of Trade, Industry and Energy

The enforcement decree of the Technology Transfer Act will be revised to reduce the current one-year waiting period. The introduction of a public competitive system for exclusive licensing applications is under consideration to promote rapid public technology commercialization.

Additionally, 11.6 billion KRW will be invested next year in the 'Inter-Ministerial Relay R&D' project, which takes responsibility for commercializing excellent technologies. The Tech Bridge-utilized commercialization technology development project will receive 252.5 billion KRW in support from this year through 2027.

Furthermore, a fund of 1.55 trillion KRW will be established to support technology commercialization companies through external technology acquisition, establishment of technology holding companies, university startups, and technology evaluation.

Kang Kyung-sung, Director of Industrial Policy at the Ministry of Trade, Industry and Energy, explained, "Technology transfer and commercialization is the process of utilizing R&D outcomes to produce products and services and pioneer markets. It is a key means to stimulate corporate vitality and enable industrial structural transformation."

Director Kang added, "We will continue efforts to enhance our companies' commercialization capabilities through market-centered R&D outcome creation, establishing an efficient technology transfer foundation, and expanding investment."