Samsung Group, the country’s largest conglomerate, opened a new research and development complex for electronics-related materials Tuesday on the outskirts of Seoul. The R&D center, which was completed 22 months after it broke ground in January 2012, is different from the group’s existing research facilities in that it is designed to develop new materials, not parts and finished products.
The spacious complex, set to hire about 3,000 researchers, mirrors the conglomerate’s long-term strategy to keep ahead of competitors in the global IT market by boosting R&D expenditure. It is also a case that illustrates Korea’s efforts to expand R&D spending to sharpen the competitive edge of its industries.
According to a report released last month, the country ranked second among the 34 member states of the Organization for Economic Cooperation and Development in terms of the ratio of R&D spending to gross domestic product. The figure stood at 4.03 percent, behind Israel’s 4.38 percent. Finland and Japan came in third and fourth with 3.78 percent and 3.39 percent, respectively. R&D investments by Korean companies accounted for 3.09 percent of the nation’s GDP, also the second-largest portion after the figure for Israeli firms at 3.51 percent, according to the OECD Science, Technology and Industry Scoreboard 2013.
Korea is still in no position to be complacent with the efforts it has made so far. To maintain and boost its global competitiveness, R&D spending should continue to increase in the right direction and manner.
It is presumed that private enterprises try to make the most reasonable and necessary expenditures possible, on which their continuous growth or even existence depends. They should wholly assume the consequences of their spending decisions.
What must come under intense focus is the inefficiency and irresponsibility of government agencies in managing state-funded R&D investments. The Rural Development Administration, which is affiliated with the Agriculture Ministry, was recently found to have spent 31 billion won ($29 million) to finance 247 research projects allotted to 99 former employees since 2000. This wasteful practice seems to have permeated other government institutions with R&D budgets.
Administrative compartmentalization and overregulation has hampered the effective implementation of state-funded projects. All government ministries involved in R&D spending have their own supervisory and assessment organizations, which have a total of 111 regulatory rules.
Under these circumstances, it is hard for researchers to raise questions about government-set guidelines. They are compelled to spend more time drawing up reports for supervisory agencies than actually doing research.
Government officials are right to encourage experimental and challenging projects, saying they will acknowledge the value of failure following serious efforts. More state funds need to be used to finance basic or high-risk research shunned by profit-seeking private corporations.
In reality, however, it still seems that the focus is put on short-term tangible results, as shown in a system under which government agencies take back part of their contributions to R&D projects with private enterprises. This scheme should be abolished to prevent companies from opting for easy research tasks to avoid disadvantages resulting from failure.
To maximize the effect of R&D spending, it is also necessary to tear down compartments between government ministries and simplify their complex set of regulatory codes. The merger of regulatory bodies based on simplified rules would facilitate sophisticated and connected R&D projects on a long-term basis, which are most needed to boost the country’s competitiveness.
