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Title STEPI INSIGHT, No. 209 Published
Date 2017.03.20 Hit 147

STEPI INSIGHT, No. 209 Published
"2017 Prospects for R&D investment in the private sector"

 

□ The Science and Technology Policy Institute (STEPI, President Jong-guk Song) has published STEPI Insight No. 209, entitled “2017 Prospects for R&D Investment in the private sector: Despite of dim prospects for R&D investment in the private sector, Enterprises have intention to invest..” This report presents the prospects for R&D investment in the private sector and the policy tasks to enhance R&D efficiency based on a Delphi survey with major Korean business corporations.


  ○ Despite the government’s 2017 budget of KRW 1.4 trillion for R&D, a 1.8 percent increase in comparison to 2016 budget (KRW 19.1 billion), anticipated low economic growth is expected to have a negative effect on R&D investment. As a result, 2017 decreased R&D investment for private enterprises is expected.


 □  This report has studied the status of private enterprises’ R&D investment in 2017, along with their projections for five years later (in 2022), in order to understand highlighted significances.


  ○ The study has been conducted with a total of 337 major Korean businesses with affiliated research institutes over two Delphi surveys: 337 firms for the first survey and 209 firms for the second.


 □ The findings indicate a continued decrease in R&D investment growth. In terms of total private R&D, a 1.5% increase is expected in comparison to 2016, which showed the lowest growth rate so far, disregarding 2016, for which no data has been confirmed.


 ○ Responding firms anticipated that the whole nation’s private R&D investment growth would remain low, while their own R&D investment would increase to a level higher than the total private R&D investment growth rate.


 ○ As for the R&D investment growth rate for 2017 and 2022, small and medium-sized enterprises (SMEs) are expected to show increases of 2.0% and 11.5%, respectively, while larger enterprises show decreases of 0.6% and 9.5%, respectively. This signifies that SMEs are in a more positive position than larger enterprises in terms of R&D investment prospects and rank higher in terms of will for investment.


 ○ In terms of business types, the construction industry took a rather positive outlook on R&D investment compared to other industries. By contrast, the service industry was analyzed to show a lower R&D investment growth rate than other industries.


 □ For these findings, the report presents solutions to activate private R&D investment:
 - the government’s elevation of R&D support efficiency and activation of private R&D investment;
 - activation of R&D investment by large businesses and continued support for SMEs;

     - and reinforcement of service R&D support.


 □ Dr. Seog-won Hwang, author of this report emphasizes, “Considering the undesirable prospects in R&D investment on both government and private sectors, it is urgent to elevate R&D investment efficiency with the given budget, and to innovate the R&D business structure and budget system to drive more economic and social influence.”

 

※ Published on March 1, 2017, this report was released to the public on March 13, 2017. Copies can be downloaded from the publications section of the STEPI website: www.stepi.re.kr.