Joint R&D a key to breaking import barrier
Due to slowdown of the Chinese economy and decreasing export price, Korea’s trade size went below $1 trillion last year, for the first time in four years. As there are no signs of improvement in export, Korean businessmen are discouraged psychologically. But it is the time to focus on building fundamental strength of the economy. We need to create new growth engines and upgrade key industries to improve the constitution of industrial structure and enhance export competitiveness.
Competition among companies have intensified beyond borders and industrial fields, and the cycle of technology development is becoming shorter. It is increasingly getting harder to have unrivaled technological competitiveness and maintain market share with independent capability of individual company.
At this juncture, international cooperation in research and development can be an appropriate solution for Korean companies seeking overseas expansion and export. When Korean companies work together with foreign industrial, academic or research partners on joint project to share technology and create products that meet the demand of the local market, they will be able to pioneer overseas market more easily.
In fact, international joint research and development projects have increasing contribution on corporate exports. Last year, exports of international joint R&D projects were 15.4 billion won ($12.5 million), more than double of 7.7 billion won in the previous year.
The Korea Institute for Advancement of Technology, or KIAT, plans to introduce so-called “global business coordinator” this year. In addition to providing R&D related funds, KIAT will assign a designated coordinator to provide necessary business advice and connect to the network needed for overseas expansion and export.
Last year, free trade agreements with China and Vietnam took effect. China is Korea’s biggest export partner, and trade with Vietnam is expanding. Developing technologies and products reflecting local demands through joint researches with FTA partners would help companies maximize the effects of FTA, such as duty-free exports.
Now, Korean companies need to seek ways to attain the goals by working with partners and learn their know-how to enhance competitiveness.
by Chung Jae-hoon, President of Korea Institute for Advancement of Technology