ICT Sector Leads R&D Investment
Korean ICT companies' R&D investment in 2018 amounted to 40.22 trillion won, exceeding 40 trillion won for the first time. The figure represented 58.4 percent of the aggregate R&D investment in all industrial sectors, which amounted to 68.83 trillion won.
According to data released by the Ministry of Science and ICT, the ICT sector’s R&D investment in 2018 increased 11.9 percent from 35.948.8 billion won in 2017. ICT companies’ R&D investment increased by nearly 10 trillion won in just two years after surpassing 30 trillion won in 2016. The number of ICT R&D personnel touched 169,281, an increase of 7 percent from 158,197 in 2019.
The Ministry of Science and ICT derived the data based on responses from a 2018 R&D activity survey data conducted by the Korea Institute of Science & Technology Evaluation and Planning (KISTEP) on companies with R&D organizations. A total of 13,024 ICT were polled by the survey.
By company type, R&D investment by venture companies increased by 19.7 percent on year to 3.3 trillion won, the largest increase, followed by medium-sized companies (14.5 percent), large companies (11.4 percent) and small companies (5.0 percent).
Total R&D investment amounts were 32.854.0 trillion won for large companies, 2,114.1 trillion won for mid-sized companies, and 1.910.8 trillion won for SMEs.
R&D concentrations calculated by R&D investment compared to sales were 8.5 percent for large companies and 7.2 percent for venture companies while mid-sized companies and small companies recorded only 2.8 percent and 4.2 percent, respectively. The R&D concentration of the entire ICT industry reached 7.4 percent.
By sector, ICT and broadcasting equipment companies, including producers of semiconductors and smartphones, accounted for 92.6 percent of the total R&D investment and 73.8 percent of the R&D workforce. Among ICT and broadcasting equipment companies, the electronic components industry including semiconductors invested 9,244.3 billion won and communication and broadcast equipment companies including smartphone makers 19,337.8 billion won. The combined amount of the two industries’ R&D investments amounted to 28,582.1 billion won, accounting for approximately 71 percent of the total R&D investment. In particular, the survey found that ICT and broadcasting equipment companies accounted for 32,340.7 billion won of the 32,854.0 billion won R&D investment by large companies. ICT and broadcasting equipment companies took the lion’s share of the investments by medium-sized companies, small companies and venture companies, even though their share was relatively small.
Private funds used for investments amounted to 37,647.6 billion won (93.6 percent of the total). Government funds amounted to 1.52 trillion won, and financial resources in the public sector reached 5.5 billion won. The share of investments by the SW and digital content development and production business among ICT R&D personnel has steadily increased from 19.5 percent in 2015 to 20.8 percent in 2016, 21.7 percent in 2017, and 23.1 percent in 2018.