Korea ramps up efforts to build global biotech cluster

President Yoon Suk Yeol looks through a microscope in Seoul on June 1. [Photo by Lee Seung-hwan]

The South Korean government plans to add core technologies related to biopharmaceuticals, such as animal cell culture and purification technologies, to the list of national strategic technologies subject to state support in the second half of the year, in a move to encourage the bio-health industry to develop more high value-added new drugs and revive domestic investment in the fields.

The government Thursday unveiled measures to foster a high-tech global cluster during an export strategy meeting presided over by President Yoon Suk Yeol.

Under the measures, the tax credit rate for facility investments in national strategic technology sectors has become higher at 15 percent for large and mid-size companies and 25 percent for small and mid-size companies. An additional 10 percent credit is applied temporarily for the increased average amount of investments made over the previous three years.

If a company invests in biopharmaceutical technology this year after making no investment in the field for the past three years, it can receive a tax credit of up to 35 percent. For investments in national strategic technology research and development (R&D), large companies are eligible for tax credits of between 30 percent and 40 percent and small and mid-size companies between 40 percent and 50 percent.

Focus is on what technology will be further added to the list of national strategic technologies in addition to the animal cell culture and purification technology.

The government plans to finalize the scope of technology for state support in the second half of the year after collecting opinions from relevant industries.

The government’s ultimate objective is to foster a local version of the biotech cluster in Boston, U.S., by offering unprecedented tax benefits for biopharmaceutical technology. The Boston cluster is a bio-industrial complex where research institutes, hospitals, and more than 1,000 companies are based around prestigious universities such as the Massachusetts Institute of Technology (MIT) and Harvard University.

During the meeting, President Yoon emphasized the need to create an ecosystem where top professionals can cooperate, while touching on the successful case of the Boston cluster he visited in April.

[Photo by MK DB]

“The Boston cluster was able to grow not only with the engineering foundation of the MIT but also by promoting a fair market order and compensation system, bringing together top talents in engineering, medicine, law and finance,” Yoon said. “National security and high-tech industries are directly connected. The government should invest heavily in a cooperative system with international research institutes. Instead of a partnership, we now have to go with the concept of an alliance,” Yoon stressed.

In Korea, 70 types of clusters are currently in operation or in the process of creation, including industrial complexes and special R&D zones. There are 1,800 to 1,900 clusters but none of them is comparable to the one in Boston.

The government plans to focus on fostering innovation clusters based on high-tech industries such as bio-tech, semiconductors, and batteries by improving related systems.

The government also announced plans to ease regulations on companies located in such clusters and allow business support service companies such as law, accounting, accelerator (AC), and venture capital (VC) firms to move in the clusters.

The government also plans to advance the digital healthcare industry by making healthcare data more accessible to the private sector.

In order to increase the accessibility of public health and medical data, the government will promote the National Project of Bio Big Data aimed at collecting bio big data from 1 million people, including clinical and genetic information and personal health information.

Through a pilot project, the government will first open the data of 25,000 people in the second half of this year and then sequentially open the entire integrated data of 1 million people between 2030 and 2032.

The government, however, is considering limiting the use of genetic information to research purposes only, according to an official from the Ministry of Health and Welfare.

The right to request third-party transmission of “Medical MyData,” a government-led service that allows medical institutions to transmit medical and health information to third parties such as care service providers or private companies upon consent of persons concerned, will be introduced in phases starting this year.