2019 Domestic ICT Companies' R&D Investment Reaches 41.4 Trillion KRW, Up 3% YoY

[Asia Economy Reporter Eunmo Koo] Despite a global decline in trade volume in 2019 leading to decreases in both production and exports of domestic information and communication technology (ICT) companies, research and development (R&D) investment increased.

The Ministry of Science and ICT announced on the 1st that an analysis of R&D activities of domestic ICT companies in 2019 showed that R&D expenditure reached 41.4 trillion KRW, a 3% (1.2 trillion KRW) increase from 40.2 trillion KRW in 2018, and R&D personnel rose by 6.1% (11,000 people) to 180,000 from 169,000 the previous year.

The Ministry explained that these results demonstrate that "in an environment where global trade volume, as well as production and exports of Korean ICT companies, all declined in 2019, our companies actively pursued technology development in materials, parts, and equipment, and made efforts to enhance technological competitiveness in core areas such as 5G and artificial intelligence (AI)."

Looking at R&D investment by company size, among the 41.4 trillion KRW spent on R&D by ICT companies in 2019, large enterprises invested the most with 33.5 trillion KRW (80.9%), followed by venture companies with 3.6 trillion KRW (8.8%), mid-sized companies with 2.2 trillion KRW (5.3%), and small and medium enterprises with 2.1 trillion KRW (5.0%).

By industry, research and development investment was highest in information and communication broadcasting equipment companies such as semiconductors and smartphones, with 38.1 trillion KRW (91.9%). Utilizing mainly private funds (39 trillion KRW, 94.2%), the focus was on the development stage (28.6 trillion KRW, 69.1%), primarily for product commercialization.

Among the total 180,000 R&D personnel in ICT companies, researchers directly conducting research numbered 161,000 (89.5%), an increase of 11,000 from 2018. Research assistants (16,000, 8.9%) and administrative support staff (3,000, 1.6%) maintained their previous year’s levels.

Lee Seung-won, Director of the Information and Communication Industry Policy Bureau at the Ministry of Science and ICT, stated, "Although still in the survey phase, it is expected that ICT companies continued their R&D investments not only in 2019 but also last year, which faced the COVID-19 crisis. The government will strengthen its role as a catalyst for R&D that companies find difficult to initiate immediately, and will make various efforts to boost investment vitality by removing obstacles to R&D, such as expanding regulatory sandboxes."

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