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Korean Universities Earn Less Than One U.S. University by Technology Transfer
Few R&D Projects Are Commercialized
Korean Universities Earn Less Than One U.S. University by Technology Transfer
  • By Yoon Young-sil
  • March 26, 2019, 11:38
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Korean universities and government-funded research institutes earn little from technology transfer.

The earnings of Korean universities and government-funded research institutes from technology transfer turned out to be negative. 

According to the National Research Foundation (NRF) of Korea, which distributes research funds to universities, 418 domestic universities (including 148 community colleges) posted 77.4 billion won (US$68.37 million) in technology transfer income in 2017, up 57 percent from 2013 (49.3 billion won).

By individual school, Seoul National University topped with 4.2 billion won, followed by Korea University with 3.7 billion won and Sungkyunkwan University with 3.6 billion won. Surprisngly, the four state-funded science and technology universities failed to make the top of the list, with the Korea Advanced Institute of Science and Technology making 2.7 billion won, Gwangju Institute of Science and Technology 1.8 billion won, and Daegu Gyeongbuk Institute of Science and Technology 1.2 billion won. Ulsan Institute of Science and Technology was not even in the top 30. Postech also only made 1.3 billion won.

Moreover, considering that the researcher compensation amounted to 41.7 billion won (54 percent) and that the costs for patent application, maintenance and registration amounted to 65.1 billion won, the earnings were negative by about 30 billion won.

The number of technology transfer per full-time faculty member of the universities was a mere 0.088. But the figure represented a 60 percent increase from 0.055 in 2013. The number of startups set up by university faculty members reached 233, up nearly 20 percent from 195 in the previous year, but only a small number of them are in full operation.

The technology transfer income of Korean universities is disappointing, to say the least, in light of the government's massive financial support. The Korean government provided the universities with 5.29 trillion won in research and development (R&D) support in the science and technology field in 2017. The universities reported a project success rate of 98 percent to 99 percent.

Korea competes with Israel for the top spot among countries all over the world in terms of the ratio of government's R&D budget to gross domestic product (GDP). But the recovery ratio of the R&D investment is zero. 

"Korea ranked 12th out of the 126 countries in the world innovation index announced in 2017," said Roe Jung-hye, head of the National Research Foundation (NRF) of Korea. "We have achieved excellent results in patent applications, human resource and research, but industry-university research cooperation was somewhat insufficient. Korea placed 26th in this category."

Yoon Byung-dong, a professor of mechanical engineering at Seoul National University, said, "There are too many papers written for their own sake and patents made for their own sake at universities. Less than one out of 10 R&D projects is commercialized."

Meanwhile, sinlge U.S. universities surpassed the aggregate income of Korean universities put together. Princeton University earned US$142 million (about 161 billion won) and Stanford University US$94.22 million (about 106.6 billion won) in 2015 through technology transfers. Annual sales of startups established by Stanford graduates more than double Korea's GDP. The United States also operates a program called I-Corps that focuses on commercialization beyond academic research when the federal government gives R&D fund to universities and research institutes through the National Science Foundation (NSF). The program is followed by other supportive activities, including startup training, conferences, and introduction of business partners, alumni and investors.

The same goes for government-funded research institutes. According to the National Research Council of Science and Technology, which administers government-funded research institutes in the science and technology field, 25 government-funded research institutes recorded 95.7 billion won in technology transfer revenues last year, making about 96.0 billion won for the third consecutive year. However, like universities, the revenue comes to nothing after the researchers take their shares and  patent costs are paid. This is a poor result for an annual budget of 8 trillion won. A researcher of a government-funded research institute said, "There is a positive side to the project-based R&D support system, which forces a research institute to carry out several R&D projects to meet labor costs. It promotes competition. However, its proportion is about half of the total research budget, which means a research institute has to waste administrative power to obtain and perform projects.”

How about companies that receive an annual R&D budget of about 4 trillion won? Although companies' technology transfer revenues are difficult to calculate, corporate projects centered on application and development research tend to be shared by many participants. There is a number of consulting firms that receive a 10 percent fee in the middle to obtain a project for the company. A resercher who develops light emitting diodes (LEDs) and works in a system integrator (SI) office, said, "R&D projects are mainly for covering labor costs for researchers. The government seems to be more interested in retaining and creating jobs."