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Global IT Giants Break Promises to Build R&D Centers in Korea
Empty Promises
Global IT Giants Break Promises to Build R&D Centers in Korea
  • By matthew
  • November 14, 2014, 09:35
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For many years, global IT companies like Intel, IBM, Ericsson, and Google haven't kept their promises to establish and run research and development (R&D) centers in Korea. Hence, there is growing criticism that foreign companies only make empty promises.

According to industry sources on Nov. 13, most foreign firms have failed to fulfill their promises to set up R&D centers and make investments in the country. Even if R&D centers were created, they did not play a significant role, ultimately leading to shutdowns after only a few years. Or, they have been merely used as a place to test products.

Moreover, Huawei's recent announcement to set up an R&D center in the nation has raised suspicions once again. “We are working to establish an R&D center in Korea,” said Kevin Ho, president of Huawei's handset product line at a press conference. He added, “We have assets, hardware, and software, but we haven't decided about the location of the center, or the scale of our workforce.”

Industry analysts are saying that Huawei's announcement can be interpreted as a conciliatory gesture to the Korean government to target the local market, following its recent entry. In the end, the announcement turned out to be merely a possibility that the Chinese Android device maker will consider building an R&D center with the Korean government's support.

Huawei's move can be ascribed to the fact that the government has always provided support for global IT companies to set up R&D centers in the country. However, those facilities have rarely been successful.

In 2004, the Ministry of Information and Communication succeeded in encouraging Intel to build an R&D center near Seoul for the first time, which generated growing anticipation that it will increase the level of the local IT industry. Nonetheless, the server giant closed the facility in 2007, as part of corporate restructuring stemming from the global financial crisis.

As a result, the home network project between Intel's R&D center and the Electronics and Telecommunications Research Institute suffered a major setback after its start in 2004. The same is true with IBM. IBM Korea opened the IBM Ubiquitous Computing Laboratory, but it merged with other organizations.

There is also increasing criticism of Google, which created an R&D center in 2007 with a promise by the Korean government to provide full support. Google Korea was funded by the government to dispatch its workforce to its headquarters, which did not produce results. Ericsson, on the other hand, promised to make a 1 trillion won (US$909 million) investment and establish an R&D center during President Lee Myung-bak's visit to Sweden in 2009. But the company later said that they did not finalize their investment plan. After all, the Swedish company hasn't made any kind of investment in the country.