Korea: Daegu Initiative Self-Assessment Report (2010)
Checklist Items for Area A: Developing Human Resources and Technology through Linkage between Industry and Educational and Research Institutions
Element / Checklist Item / Evaluation Criteria / Comments1. Joint research and development among university-industry-institutes / A-1 Are there any targeted research collaboration programs that involve SMEs as designated participants of research projects? / 4 / Korea encourages SMEs with weak R&D capacity to form partnerships with universities and research institutes in order to develop new technologies through the Korea Small and Medium Business Administration (SMBA)’s “SME Joint Business-Academic Collaborative Research Encouragement Program.”
The program encourages collaborative research between SMEs and university or research institutions by providing government matching funds to cover costs of the collaborative technology research.
Also, the program encourages SMEs to establish and operate subsidiary research centers in conjunction with universities and research institutes in order to raise the capacity of R&D in SMEs and foster good research personnel.
Furthermore, the government supports projects for developing new goods and technologies by encouraging public research institutes to participate in SME’s research projects, and allowing the SME access to advanced equipment owned and operated by the public research institutes.
See <Appendix A-1> for more details.
A-2Basic statistics on R&D investment flows:1) The level of R&D investment performed by university that is financed by industry; 2) The level of R&D investment performed by university that is financed by government; 3) The level of R&D investment performed by government research institutes that is financed by industry; 4) The level of R&D investment performed by industry that is financed by government / OECD member countries are exempted from providing these data, since it is accessible from the OECD.
2. Patent or Technology transfer / A-3What proportion of issued patents is owned by SMEs (the patents issued in each member state’s patent office)? / Between 2000-2008, Korean businesses applied for 636,992 patents. Of these, large businesses accounted for 451,570 (71.7%), and SMEs accounted for 180,422 (28.3%). Data from Korea Trends in Patents 2009 published by the Korean Intellectual Property Office, Oct. 8, 2009.
A-4Does the government provide special incentives or institutional supports to SMEs for patent application? / 4 / The Korean government, through the Korea Intellectual Property Office (KIPO), provides consulting services for intellectual property management such as strategic support for R&D and intellectual property handling for state-of-the-art parts and material industries; fostering specialists in intellectual property for SMEs,; and provision of information on patents for SMEs who may become involved in international IPR disputes. See <Appendix A-2>.
A-5Are there mechanisms to promote technology transfer from public research organizations to SMEs? Is there any incentive given to public organizations for licensing publicly own patents?What proportion of public/university patents are licensed to SMEs? / 4 / Korea encourages technology transfer to SMEs through “SME Technology Transfer Program” managed by SMBA and Korea Technologyand Information Promotion Agency for Small & Medium Enterprises (TIPA).
In order to more fully utilize the advanced R&D infrastructure and technology transfer capacity of the public research institutions, and to raise the commercial possibilities of technologies transferred to SMEs, for public research institutions, from 2010, only those technologies which were developed as response to surveys on technology demand will be eligible for government R&D funds and support. Further, the participation of the public research institutions which have developed the new technology will be mandatory. Thus, the role of public researchinstitutionsis expected to increase. These measures are expected to make technology transfer to SMEs more efficient. More information can be found through the SME Comprehensive Project Management System ( (in Korean) and <Appendix A-3>.
3. Utilization of human resources and research facilities in universities and institutes / A-6 Are there policies that enable SMEs to consult scientists and engineers in public institutes? (including. universities)? / 4 / Korea’s Electronics and Telecommunications Research Institute (ETRI) offers one-on-one consultations or on-site consultations on wide range of areas with ETRI’s specialists and SMEs through its Technology Escort Program. For those SMEs which want to utilize technology owned or developed by ETRI,ETRI will assign its specialists to the SME for one to six months through the SME On-Site Specialist Program, to help SMEs understand and utilize the technology, maximize the success of the SME endeavor, and raise the competitiveness and quality of the goods being produced by the SME.. For the services of these specialists, the SME pays 1 million won (about USD 870,000) per month per specialist. See Korean)
A-7Are there policies that stimulate public research institutes (including universities) that open research facilities to private sector? Does government provide additional incentives if the users are SMEs? / 4 / SMBA operates a “R&D Sharing Support Program” which allows sharing of advanced equipment owned by universities and research institutions with SMEs to more efficiently use public R&D resources and increase SME technological capacity. A total of 12.6 billion won (approximately USD 11 million) has been allocated for the project, and the fund can reimburse up to 60% of the cost of using the R&D equipment owned by universities or research institutions (up to 50 million won – approximately USD 45,000). The project allows the government to provide up to 60% of the cost of using R&D equipment, while the SMEs are responsible for up to 40% of the cost. Firms in manufacturing or knowledge service industries which want to use the equipment owned by universities or research institutions for technological development are eligible for support, while universities research institutes and non-profit research institutions which have more than 20 pieces of equipment worth at least 10 million won each and which can be used by SMEs for technology development purposes are eligible to participate in the support program. More details can be found through the “SME Industrial Cooperation Support Comprehensive Management System” accessible through (in Korean)
4. Incentives to attract young talents to SMEs / A-8 Are there policies to promote and teach students entrepreneurial spirits and awards young entrepreneurs? / In order to foster entrepreneurial spirit in young people and establish more SMEs, SMBA operates a diverse range of educational programs as medium-term projects. These programs include:
- Characteristics of Entrepreneurs –university visiting lectures taught by venture businessmen (held 650 times to total of 90,000 students)
- On-line entrepreneurship game designed for elementary and middle school students (as of 2009 operating in 20 schools)
- Bizcool Porgram – next-generation management experience program to teach entrepreneurship and desirable business skillsto high school students (as of 2009, operating in 115 schools)
- Classes and seminars on entrepreneurship in universities and graduate schools – designed for classrooms, entrepreneurship and business clubs in universities, entrepreneurial camps and conferences. Combined curriculums (business and engineering schools) have been established, and school credit for establishing businesses is available.
More information is available from Business Creation Net at (in Korean)
A-9 Are there policies that stimulate SME to hire postgraduate science/engineering degree holders to increase technological competence of SMEs? / 4 / SMBA operates a “SME On-Site Experience Education Program for College Students” which seeks to raise college students’ awareness of business ethics and entrepreneurship, as well as to improve their views on SMEs so that they will be encouraged to seek jobs in SMEs. 50 universities are participating in this project in 2010, and is expected to attract 10,000 students. More information is available from (in Korean)
5. Supply of human resources that meet the needs of SMEs / A-10Are there dedicated education programs customizedto SME requests? Is the program operated at the level of a separate department or at the level of additional courses? Does government play roles in the modification of curriculum? / 4 / SMBA’s labor force support department operates “Industry-Academia Customized Labor Development Program.” This program links businesses and universities or vocational high schools so that new entrants to the labor force can be custom molded to the demands of businesses, and reduce the labor shortages faced by SMEs. Between 2005 to 2008 the program helped 4996 students of vocational high schools to get customized education and get hired by SMEs. Approximately 94.9% of students enrolled in the program completed it, and the employment rate for these students was 90.1%. Considering that the employment rate for students in vocational schools for 2008 was only 18.98%, the program has to be considered a large success. Further, 72% of students expressed satisfaction with the program, and 75% of the participants felt that they received their training in a shorter period of time than other SME employees. Further information is available from Customized Labor Development Program Homepage at (in Korean)
A-11Are there government sponsored training programs that train employees to upgrade skills? (If so, are they targeted for SMEs?) / 4 / Korea’s Small and Medium Business Corporation (SBC) provides a wide variety of training programs on technology needed by SMEs such as machinery, electronics, plastic molding, metalwork and surface processing. SMEs can receive support for 30-50% of their training costs through the government’s unemployment insurance rebate program. Furthermore, for small businesses (For manufacturing, mining, construction and transportation industries, firms with less than 50 workers, and for firms in other industries, less than 10 full-time workers), SBC offers discounts on their training costs of 20-50%. More information is available at (in Korean)
<Note> Korean won is usually converted into US dollars at 1150 won per dollar. However, for amounts in the past, that year’s exchange rate is used for the conversion.
<Note> n.a. = not applicable.
<Appendix A-1> SME Joint Business-Academic Collaborative Research Encouragement Program.
Korea encourages collaborative research between SMEs and academic organizations. Under this program, three types of support are given. The first is the Joint Business-Academic Collaborative Technology Development Support. This support is designed to between SMEs which lack R&D capacity and academic organizations. Assistance is given through matching funds by central and provisional government. For a national or international project, the government will cover 75% of the cost, while businesses are expected to cover 25% of the cost. For regional projects, central government will cover 40%, regional government will cover 35% and business is expected to cover 25% of the cost. The government has allocated 71.7 billion won (approximately USD 62 million) for this support.
The second type of support is support for businesses establishing research subsidiaries. Under this support, businesses are encouraged to establish research subsidiaries with universities or public research institutions. For establishing new research subsidiaries, the central government will cover 40%, and the regional government will cover 35% of the cost. Businesses are expected to cover 25% of the costs. For upgrading existing research subsidiaries, the central government will cover 75% of the cost, and businesses are expected to cover 25% of the cost. 38 billion won (USD 33 million) has been allocated for this support.
The third type of support is support for using state-of-the-art research equipment for technology development. Under this support, the government will partially cover the cost of using technology, labor and equipment (including supercomputers) owned by public research institutions when SMEs are conducting collaborative R&D with academic organizations. A total of 20 billion won (USD 17 million) has been allocated for this support.
<Appendix A-2> SME Support by KIPO
Four types of support for SMEs are offered by KIPO. The first is IPR Consulting for SMEs. SMEs with high innovation potential can apply for consulting services through 16 regional IPR centers or IPR web portal ( Currently, 100 SMEs are eligible for this support. Under this support, KIPO representative will visit the firm, explain the IPR system, and help apply and register for IPR. Also, the representative will give comprehensive IPR consulting service, including advice on how to respond to IPR disputes, how to utilize IPR related information, and how to commercialize IPR.
The second type of support is support for state-of-the-art parts industry IP and R&D. Two types of firms (including SMEs) are eligible for this support. The first is research subsidiaries of firms which are working in state-of-the-art parts industry, and have been certified by industrial technology associations. The second is SMEs who satisfy the requirements in the Special Act to Develop Specialized Firms in Parts Industry Article 2.1.
The third type of support is support to foster IPR administrative specialists in SMEs. SMEs which wish to train its personnel in IPR (patents, trademarks, design) are eligible for support. Firms which have applied for patents in the last three years, Inno-biz firms, venture firms, and women-owned firms have priority for support.
The fourth type of support is support to prepare for international patent disputes. SMEs, venture firms, large businesses, universities and research institutions are eligible for support. Eligible organizations can receive patent dispute information at no cost by registering at the website
<Appendix A-3> SME Technology Transfer Program
Under this program, SMEs may receive financial support for development costs related to adopting technology developed by public research institutions. This program aims to commercialize technologies developed by public research institutions, and increase technology competitiveness of SMEs. Under this program, government provides up to 75% of the development costs (up to 500 million won – approximately USD 435,000) for two years. SMEs are expected to cover at least 25% of the cost, and 20% of the cost must be covered in cash. The public research institution is not responsible for any cost related to transferring its technology to SMEs. The amount of funds allocated to this program in 2010 is 9.8 billion won (approximately USD 8.5 million).
Checklist for Area B: Access to Specialist Assistance and Advice
Element / Checklist Item / Evaluation Criteria / Comments1. Assessing technical challenges facing SMEs / B-1. Does your government regularly meet with representatives from innovative SMEs, and discuss their needs? / 4 / Korea, as part of a program to foster innovative SMEs, operate a certification system for management-innovation SMEs, technology-innovation SMEs, and venture firms. These innovation-oriented SMEs have established business associations such as Venture Business Association, and Innobiz which survey and gather suggestions of firms and discusses them with the Korea Small and Medium Business Administration(SMBA) and other appropriate government agencies through regularly held meetings. The government agencies examine these suggestions and actively adopt them when appropriate.
2. Consulting SMEs digitalization / B-2. Does your economy have broadband connections widely available to your businesses? If not, is there a plan on introducing more broadband connections to businesses? / 4 / Korea has established high-speed internet service in 1998, and as of the end of 2008, has 15.48 million subscribers. The size of electronic commerce in Korea, as of the end of 2008, is estimated to be 629.97 trillion won (approximately 572.7 billion USD), rising by 22% over the previous year, and electronic commerce between firms were estimated to be 560.14 trillion won (approximately 509.2 billion USD). Manufacturing accounted for 64%, Wholesale and retail distribution accounted for 17%, and construction accounted for 11% of this total. <Source: 2009 Informatization White Paper
B-3 Does your economy’s government offer advice to your SMEs on how best to digitalize their businesses / 4 / SMBA and Korea Technology and Information Promotion Agency for SMEs (TIPA) provide assistance for establishing information systems customized for SMEs which have weak specialist and investment capabilities for information technology. The program seeks to improve IT capacities and utilization of information systems for SMEs, as well as strengthen their medium and long term growth potential. The assistance provided by the program includes support for installing internal information systems which will consolidate operations, facilitate the use of information for decision-making, and raise productivity. Assistance also includes support for the upgrading of outdated information networks, and investment in expansion of IT networks for those firms making exemplary use of IT.
B-4. Does your economy also offer financial and/or tax assistance for SME digitalization? / 4 / SMBA and TIPA operate a program which facilitates SME informatization through providing partial support for development costs ofcustomized software for SMEs which intend to use the software to improve productivity. Other programs run by SMBA and TIPA include IT-based management innovation program and On-Site Digitalization Program.
3. Research equipment and human resources search system / B-5. Does your economy maintain programs for making required equipment available to innovative SMEs? / 1 / Korea maintains several programs for making research equipment owned by universities and public research institutes available to researchers in SMEs for technology research and development. Many of these programs are described in Area A of the self-assessment report.
B-6 Does your economy’s government maintain a database of expert consultants who would be useful for innovative SMEs, and can innovative SMEs access that database to find experts that they need? / 4 / The Korean government has established a pool of specialists and consultants for SMEs, and operates a website which allows SMEs to search for appropriate domestic or foreign specialists. Firms which require assistance from these specialists on technology and management issues can take advantage of SMBA’s consultant cost coupon program, which partially covers the cost outlay of these firms.
4. Expanding public service benefits / B-7 Does your economy provide consulting services for SMEs concerning technical, entrepreneurial, legal or tax issues? / 4 / SMBA, with cooperation from Korea Management and Technology Consulting Association (KMTCA), Korea Consulting Association (KCA), Large and Small Business Cooperation Foundation (BCF), and Small and Medium Business Cooperation (SBC) operates a coupon system for consulting services to alleviate technical and managerial problems encountered by SMEs.
5. Innovation education for SME employees / B-8. Does your economy encourage high school and college educational programs dealing with running innovative businesses? / 4 / SMBA and TIPA operate programs to foster specialized vocational high schools to help the development of technologically knowledgeable labor force for businesses and cutting edge technology industries, while providing good steady employment. SMBA and TIPA also hope that this project will have a positive effect on national employment, and raise the public’s awareness and approval of vocational training programs.
B-9 Does your economy have programs to encourage SME employees to get further education? / 4 / SBMA and Small Business Training Institute (SBTI) develop and operate training programs dealing with actual business procedures as faced by SMEs. Training is offered in a wide variety of areas including technology, quality, management and IT. The program aims to provide performance-based workplace learning performance (WLP) training based on the latest training trend in business training.
6. Others / B-10. Does your economy have any other programs to facilitate specialist assistance and advice to innovative SMEs? / 4 / SMBA and SBC operate support programs for sending SME technical support personnel abroad for training, so that the number of highly trained technical workers will be increased, and SMEs can develop new technologies. SMBA operates a consultation coupon program to reduce the costs of SMEs seeking consultation and alleviate management and technical problems faced by SMEs.
<Note> Korean won is usually converted into US dollars at 1150 won per dollar. However, for amounts in the past, that year’s exchange rate is used for the conversion.