[Viewpoint] Cooperation vital for green economy

The global economic slowdown sparked by a financial crisis in the United States has put many companies inside and outside Korea in jeopardy. At times like this we need to concentrate on our merits and develop new growth engines in new industries. Korea is highly evaluated for its talented workers and potential research and development capacity, thanks to Koreans’ enthusiasm for education.

It is regrettable, however, that such remarkable research and development capacity does not always lead to improvements in daily life. For instance, for the past 30 years, Korean research teams have registered 937 patents in the field of anti-cancer medication, but most of them have not proceeded to the next pre-clinical phase. Only three of them ended up being developed into actual drugs sold on the market. That means the chance a Korean anti-cancer drug has to be developed into a marketable product is just 0.3 percent.

No matter how great our technology may be, if we cannot commercialize it its economic value is practically zero. The economic concept of “collabonomics” that has recently emerged as a new way to enhance companies’ competitiveness is worth examining. The word collabonomics is a combination of collaboration and economics. It refers to global companies collaborating to overcome difficulties, such as sharing costs for developing products, raising one another’s value in a partnership that benefits both parties.

Global companies are now trying to dominate markets through collabonomics. Attracting investment from such companies and conducting joint research with them can lead to vital turning points in overcoming the economic crisis, at least domestically.

If we combine our own distinctive research and development capacity with global companies’ high-tech capabilities, networks and marketing tools, we will benefit from the collaboration considerably in the future. The biopharmaceutical industry is one of the areas that can apply this strategy successfully.

Recently, global pharmaceutical companies signed partnerships with Korean public research institutes. These allowed our companies to overcome their limits, and they have started to make the health care industry a new growth engine for our country. Through the partnership between global pharmaceutical companies and domestic research institutes or companies, basic research and clinical experiments will develop.

The health care industry is rising in promise these days, and it is about more than building hospitals. It’s about equipping them with high-tech health care technology and entering the international market for these machines as a new frontier for our economy. According to a report by the Korean Health Industry Development Institute and the Korean Regional Science Association, the effect of investment in the pharmaceutical industry is 1.8 times higher than in the electronics industry, and more than two times higher than in the transportation equipment industry.

This year, the government designated green technology, including the biopharmaceutical industry and renewable energy, as new growth engines. Foreign companies’ investment in promising sectors has emerged as a new model for cooperation and survival.

Early this year, the Korea Trade-Investment Promotion Agency held an event to attract foreign investment to our country. It was a success, attended by around 300 people, including foreign investors from the United States and Hong Kong, among other places, and by Koreans from domestic companies in the biopharmaceutical and renewable energy industries.

To make contracts between domestic public corporations and multinational companies for investment and cooperation successful, it is important to monitor, supervise and evaluate the partnerships after contracts have been signed.

The perception that multinational companies’ investments are harmful to our industries and that they take away shares from domestic companies must be abandoned. We need to understand that global companies’ investment in domestic companies and their collaboration with domestic companies for research and development is not a matter of choice but more of necessity.

Particularly, global collaboration in new growth engines must be encouraged to overcome the economic crisis. It also must become the core of our economic system.

We must create a flexible environment for research and development of global, multinational companies. In doing so, we can overcome the economic crisis and we can develop along with the world, opening a second great chapter in the world’s economic development.

*The writer is the foreign investment ombudsman of the Korea Trade Investment Promotion Agency and Ph.D. in economics. Translation by the JoongAng Daily staff.

by Ahn Choong-yong