Yoon Administration's R&D Budget Cuts Spark Backlash: "Sunk Cost Reaches 70.3 Billion Won"

Over 200 Research Projects Halted, Shaking Technological Competitiveness
Kim Won: "Taxpayer Money Wasted... Next Year's Budget to Be Greatly Expanded"

Won Kim, member of the Democratic Party of Korea.

The aftermath of the Yoon Suk-yeol administration's cuts to the research and development (R&D) budget has dealt a direct blow to the R&D sector for small and medium-sized enterprises (SMEs) through June of this year, resulting in the loss of 70.3 billion won in taxpayer money. In particular, not only have more than 200 SME R&D projects been halted, but there is also growing criticism that misguided policy decisions have significantly weakened the innovation momentum of these companies.

According to audit materials submitted by Assemblyman Won Kim of the Democratic Party of Korea (Mokpo, South Jeolla Province) to the National Assembly on the 24th, a total of 903 SME R&D support projects overseen by the Ministry of SMEs and Startups were discontinued between 2020 and June of this year.

What stands out is that, whereas the number of discontinued projects due to typical business management difficulties was usually around 100 to 180 per year, the number surged to 295 last year-nearly triple the usual figure. This spike was directly caused by budget cuts under the Yoon Suk-yeol administration, resulting in 152 projects being abandoned last year and 48 more through June this year, for a total of 200 projects prematurely terminated.

The sunk cost of public funds due to project discontinuations from budget cuts amounted to 52.5 billion won last year, with an additional 17.8 billion won through June this year, bringing the total to 70.3 billion won.

After former President Yoon Suk-yeol remarked at the National Fiscal Strategy Meeting in June 2023 that "R&D projects that simply divide up the budget should be reviewed from scratch," the government made drastic cuts to the R&D budget. Critics argue that this snap policy decision, which overlooked the need for continuity in R&D projects that span several years, has led to wasteful government spending and a decline in technological competitiveness.

Assemblyman Kim emphasized, "A single misguided policy decision triggered by a comment from former President Yoon Suk-yeol has wasted hundreds of billions of won in taxpayer money, with the burden falling squarely on SMEs. Since SMEs are the backbone of the real economy, the Lee Jae-myung administration will significantly increase the budget to strengthen technological capabilities."

Meanwhile, the Lee Jae-myung administration has allocated a record 2.1955 trillion won for the Ministry of SMEs and Startups' R&D budget for next year.

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