[Heart of Innovation, Corporate Research Institutes ⑦] Korea's R&D Overconcentration in the Capital Region... Urgent Need for Win-Win Solutions to Prevent Regional Decline

"An Industry-Academia-Research Collaboration Ecosystem
Must Be Established in Local Areas,
Modeled After Germany's Fraunhofer Institutes"

Ku Jakyun, Chairman of the Korea Industrial Technology Association, emphasized in an interview with Asia Economy that it is urgent to establish an industry-academia-research (R&D) ecosystem modeled after Germany's Fraunhofer Institutes in order to expand local corporate research centers.

The Fraunhofer model, which is considered the world's most successful industry-academia-research cooperation framework, supports technology development by collaborating with small and medium-sized enterprises in each region through its 76 local institutes.

The capabilities of South Korea's industrial R&D remain excessively concentrated in the Seoul metropolitan area. Pangyo is a prime example. With top talent and infrastructure clustered in the capital region, corporate research centers naturally gravitate there as well, creating a vicious cycle that further weakens the R&D base in other regions.

Chairman Ku pointed out that this imbalance "results in inefficient utilization of talent nationwide and intensifies the vicious cycle of young people in regional areas moving to the metropolitan area."

He stressed, "Korea must also establish a platform like Fraunhofer through public-private cooperation." He explained that if local universities and research institutions focus on basic research and talent development, and corporate research centers connect these efforts to application and commercialization through an organic collaboration system, regions outside the capital can also achieve globally competitive research outcomes.

Such a collaborative ecosystem not only contributes to balanced regional development, but is also essential for the survival of South Korea as a whole in a rapidly changing industrial environment. Chairman Ku argued that "trade disputes, the climate crisis, and the emergence of innovative technologies like AI are too large in scale for individual companies to address alone," emphasizing that both large corporations and small and medium-sized enterprises within the value chain must adapt together.

To this end, he proposed that comprehensive government-level policies are needed, such as reducing information asymmetry between large corporations and small and medium-sized enterprises, and supporting joint R&D projects involving all companies across the supply chain. He attributed the recognition of LS Electric’s technological prowess, the company he leads, to its consistent investment of more than 5% of annual sales into R&D. He firmly believes that, even in the face of a deteriorating business environment, only continued large-scale investment in R&D can provide a solution in this era of uncertainty.

The Korea Industrial Technology Association, led by Chairman Ku, has also prioritized "collaborative technological innovation" as its core value, expanding the foundation for inter-company cooperation through initiatives such as the "DT Council" to support digital transformation and the "Carbon Neutral K-Tech Forum" to seek solutions for carbon neutrality.

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