"South Korea's Robot Industry Competitiveness 'Lowest'... Institutional Support Needed"

FKI, Global Robot Industry Status Survey
South Korea Tops Global Robot Demand...Ranks Last in Comprehensive Robot Competitiveness Among 6 Countries
High Dependence on Japan for Essential Parts...Policy Challenge to Establish Division of Labor Structure

Comprehensive Competitiveness of Major Countries' Robot Industries.
[Data provided by the Korea Institute for Industrial Economics and Trade]

[Asia Economy Reporter Han Ye-joo] A survey revealed that South Korea has the highest demand for robots worldwide, but its global competitiveness in the robot industry ranks among the lowest compared to major countries.

The Federation of Korean Industries (FKI) announced on the 15th the results of an investigation and analysis of the global robot industry status and South Korea's position.

According to the FKI, the global robot industry consists of the industrial (manufacturing) robot market, which performs automated tasks in manufacturing sites, and the service robot market, including medical (surgical robots), household (cleaning robots), and military (reconnaissance robots). As of 2020, the market size was $24.3 billion, with South Korea's robot market at $3 billion, accounting for only 12.3% of the global market. Notably, while the global market grows at an annual rate of 9%, South Korea's growth remains in the 2% range, indicating an industry in stagnation.

South Korea ranks first worldwide in robot density, which refers to the number of robots installed per 10,000 workers, showing the highest robot demand globally. While the global average robot density is 126 units, South Korea's robot density is 932 units, significantly higher than manufacturing competitors such as Japan (390 units), Germany (371 units), the United States (255 units), and China (246 units).

Despite the high robot demand, South Korea's competitiveness in the robot industry is lower compared to major countries. According to research data from the Korea Institute for Industrial Economics and Trade, South Korea's overall competitiveness in the robot industry ranked 6th out of six major countries, including the United States, Japan, China, Germany, and Switzerland, placing it at the bottom. Japan ranked first in overall competitiveness, Germany second, and the United States third, with South Korea trailing even behind China. China has accelerated overtaking South Korea through government-led intensive investment in the robot industry, such as subsidies and 100% tax deductions for research and development (R&D) expenses, as well as aggressive mergers and acquisitions (M&A) of global robot companies. South Korea is also being closely pursued by China in robot industry R&D competitiveness.

In terms of procurement, which refers to the capability to produce robot parts, South Korea is particularly vulnerable and relies on Japan for key component procurement. Japan ranks first globally with a near-perfect score of 9.8 out of 10 in parts procurement competitiveness, whereas South Korea scored 6.7 out of 10, ranking 6th among the six countries. Notably, South Korea's dependence on Japan for core parts is very high, with 61% for robot reducers and 65.1% for submotors. For other essential parts, the localization rate of drive components, which account for more than 35% of the robot price, is only 15%, and the localization rate of software, a chronic weakness in South Korea's advanced industries, remains at 24%.

Meanwhile, the area where South Korean robot companies face the greatest difficulty is 'inter-company collaboration.' According to the Korea Robot Industry Association, unlike competitors such as China, which specialize in specific areas per company and mutually divide labor, South Korean companies handle all stages of the value chain individually, leading to increased costs and decreased competitiveness. In particular, due to a shortage of software personnel, hardware experts must also take responsibility for software development, revealing issues in both the lack of a division of labor structure and workforce problems. In robot workforce competitiveness, South Korea lags behind the United States, Japan, and Germany, with a very high shortage rate of robot specialists at 35%.

Kim Bong-man, head of the FKI International Headquarters, stated, "The robot industry, a core field of the 4th Industrial Revolution, is one of the sectors that manufacturing competitors are strategically developing to lead future industries." He added, "South Korea faces challenges such as improving dependence on imported parts, fostering specialized personnel in each field, and revitalizing the division of labor structure within the industry." He emphasized, "As a new industry, proactive regulatory innovation and institutional support are necessary to prevent existing regulations, which are often unnoticed in daily life, from hindering service development."

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