Korea to reorganize R&D projects, revitalize economy

[Photo by Yonhap]

The South Korean government will reorganize research projects in the industrial and energy sectors as it restructures its research and development (R&D) budget, focusing on large-scale projects worth more than 10 billion won ($7.46 million).

“R&D projects play a key role in revitalizing the growth potential and securing economic security,” Industry Minister Ahn Duk-geun said during his visit to Samsung Electronics Co.’s research center in southern Seoul on Thursday, where he announced the government’s ‘Industrial and Energy R&D Investment Strategy and System Innovation Plan’ for R&D structural reform in the industry and energy sectors.

“Industrial and energy R&D, which accounts for about 20 percent of government R&D investment, urgently needs a major transformation in its investment strategy and project structure to break away from past practices and create impactful market results,” he said.

The core of the R&D innovation plan is to maximize efficiency and focus on select areas, which involves transforming numerous small R&D projects into larger-scale ones. The number of large projects with budgets over 10 billion won will increase significantly from 57 last year to 160 this year, according to the government plan.

“We will shift from the existing small-scale, component technology development approach to a goal-oriented, large-scale project model that encompasses the entire value chain,” Ahn said.

To encourage small and medium-sized enterprises (SMEs) to participate in R&D alongside large corporations, the government plans to reduce their cash cost burden by over 70 percent. The cash burden for corporate-funded research is currently 60 percent for large corporations, 50 percent for medium-sized enterprises, and 40 percent for SMEs. The high cash burden ratio reportedly led to lower participation levels from large corporations in the industry ministry’s R&D projects.

“We will reduce the cash burden for large corporations to 15 percent and also lower it for medium-sized and small enterprises to 13 percent and 10 percent, respectively,” Lee Minwoo, director general of the ministry’s Industrial Technology Convergence Policy Bureau, said.

The budget will be concentrated on ultra-high-difficulty and cutting-edge technologies, with a total budget of 1.4 trillion won to be allocated to developing advanced packaging under 1nm, liquid hydrogen carriers, and next-generation nuclear reactors in 2024. The amount increases to 2 trillion won when private R&D investment is included.

A preliminary feasibility study worth about 1 trillion won will also be conducted in 2024 to develop 10 game-changing technologies that can take the lead in the global market, even though commercialization will take a long time, and the probability of failure is high. Around 1.2 trillion won, or 10 percent of the new project budget, will also be invested in ultra-high difficulty projects to solve industry-specific challenges annually.

According to the industry ministry, ultra-high difficulty projects may include developing ultra-low power, ultra-fine and superconducting semiconductors, as well as next-generation lithium-oxygen batteries.

“We are concerned that we are not seeing R&D results such as code-division multiple access (CDMA) and 4-megabit DRAM as in the past,” Lee said. He emphasized that the ministry intends to reorganize into a clear mission-oriented, large-scale, and long-term investment system that leads to significant outcomes, as opposed to fragmented small-scale component technology projects.”