Samsung Electronics' R&D Investment Accounts for Half of South Korean Companies' Total Investment

Korean Companies' R&D Investment Concentrated Among Top Firms
R&D Investment Growth Level Also Lagging Behind Major Countries

Samsung Electronics' research and development (R&D) investment accounts for nearly half of South Korean companies' total R&D investment, according to a recent study.

The Federation of Korean Industries (FKI) announced on the 24th the results of an analysis of the status of the top 2,500 global companies by R&D investment as of the end of December 2021, broken down by country.

The survey revealed that the concentration of R&D investment among South Korean companies is higher compared to the G5 countries and China, indicating a strong "concentration phenomenon" on the top company. Samsung Electronics' R&D investment accounted for 49.1% of the total R&D investment by South Korean companies. When considering the top five companies?Samsung Electronics, SK Hynix, LG Electronics, Hyundai Motor Company, and LG Chem?the R&D investment scale reached 75.5% of the total for South Korean companies, showing a heavy reliance on these leading firms.

In the United States, the concentration ratio of the top company was only 6.3%, while China recorded 10.0%, Germany 17.1%, Japan 7.6%, the United Kingdom 21.7%, and France 19.8%. The dependence on the top five companies was 23.7% in the U.S., 22.2% in China, and 26.1% in Japan.

[Provided by Federation of Korean Industries]

The growth level of R&D investment by South Korean companies also lagged behind major countries.

Compared to 2013, the total R&D investment by South Korean companies increased from $21.8 billion (2013) to $37.7 billion (2021), approximately a 1.7-fold increase. In contrast, Chinese companies' total R&D investment rose from $22.4 billion (2013) to $215.5 billion (2021), a 9.6-fold increase, while U.S. companies increased from $212.9 billion (2013) to $483.7 billion (2021), a 2.3-fold increase.

Analyzing the ratio of R&D investment to GDP among major countries, South Korea's R&D investment as a percentage of gross domestic product stood at 2.1% at the end of 2021, marking a 0.5 percentage point increase compared to the end of 2013. In contrast, China’s R&D investment to GDP ratio increased by 1.2 percentage points during the same period, while the U.S. and Germany each saw increases of 0.8 percentage points, and Japan experienced a 0.7 percentage point rise.

Choo Kwang-ho, head of the Economic and Industrial Headquarters at the FKI, stated, "Major countries are strengthening R&D investment incentives by raising tax credit rates and expanding credit limits." He added, "To revitalize R&D investment across industries and alleviate the concentration phenomenon on the top company, it is necessary to actively create an R&D investment environment through government-level incentive expansion policies."

Meanwhile, among the top 2,500 companies by R&D investment, U.S. companies numbered 822 (32.9%), the largest share, followed by Chinese companies with 678 (27.1%), together forming a solid duopoly accounting for 50.0% of the total. South Korean companies numbered 53, representing 2.1% of the total and ranking 9th among 41 countries.

At the end of 2021, the total R&D investment of the top 2,500 global companies reached approximately $1.2032 trillion (about 1,546 trillion KRW), a 16.9% increase compared to the end of 2020. Among these top companies, U.S. firms accounted for the largest share with about $483.7 billion (approximately 621.6 trillion KRW), representing 40.2%. South Korean companies' R&D investment totaled about $37.7 billion (approximately 48.5 trillion KRW), accounting for 3.1% of the total and ranking 6th among 41 countries.

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