"Need to Strengthen Supply Chains through Activation of Technology Transactions"

Hankyung Research Institute Advocates Establishment of Korea Industrial Technology Exchange

[Asia Economy Reporter Jin-ho Kim] Domestic companies have raised the claim that strengthening the domestic supply chain through 'activation of domestic technology transactions' is necessary to respond to the reorganization of the global supply chain and secure market competitiveness in the post-COVID-19 era.

The Korea Economic Research Institute stated this on the 28th through a report titled 'Measures to Strengthen the Domestic Supply Chain through Activation of Technology Transactions.'

The report pointed out that with the advent of the 4th Industrial Revolution era, major countries around the world are focusing on technological innovation and securing new technologies, intensifying competition among nations to seize future economic hegemony. It emphasized the need to proactively respond to the reorganization of the global supply chain to expand a stable supply chain and strengthen advanced technological capabilities essential for securing future competitiveness in semiconductors, batteries, pharmaceuticals, materials, parts, and equipment.

In Korea's case, although the scale of research and development expenditure is large and quantitative indicators are excellent, the number of excellent patents is small and technology transactions are sluggish, showing weakness in qualitative indicators. In 2020, Korea's research and development expenditure (R&D) as a percentage of gross domestic product (GDP) was 4.81%, ranking second among OECD countries worldwide, and the R&D expenditure was about 93 trillion won, ranking fifth globally.

However, between 2013 and 2017, the proportion of excellent patents registered with the Korean Intellectual Property Office through private R&D was only 7.9%, and excellent patents from national R&D accounted for only 5.4%. During the same period, the proportion of excellent patents registered with the United States Patent and Trademark Office was in the order of Germany (28.9%), Japan (21.8%), China (12.3%), U.S. federal R&D (11.2%), and Korean government R&D (8.9%).

The report explained that although research and development is encouraged for the innovative growth of technologically capable companies in the recent 4th Industrial Revolution era, technology transactions may shrink due to strengthened regulations focused on technology protection.

In particular, the report explained that even when domestic large companies try to purchase necessary technologies at a fair price, the emphasis on technology protection such as technology theft and punitive damages has led to a situation where attempts to conduct technology transactions domestically are not made. It also pointed out the phenomenon of purchasing technology in overseas markets.

Therefore, to activate domestic technology transactions, it argued that the currently scattered technology transaction institutions should be unified to establish the '(tentative name) Korea Industrial Technology Exchange.' It also emphasized the need to strengthen the domestic supply chain through the linkage of large and small and medium-sized enterprises.

Lee Gyu-seok, Associate Research Fellow at the Korea Economic Research Institute, explained, “To respond to the reorganization of the global supply chain, domestic companies need to activate technology transactions so that large and small and medium-sized enterprises can be linked through technology transactions.”

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