A controversy has flared up over President Lee Myung-bak’s promise on Monday to help domestic corporations set up R&D centers in Seoul and the adjoining Gyeonggi Province. Meeting with the heads of the nation’s top 30 conglomerates, Lee said, “Corporations need high-caliber staff to increase exports and expand investment. Having R&D centers in the capital area would help attract talented researchers.”
The Ministry of Strategy and Planning has started to follow up on Lee’s pledge. Currently there is no law or regulation that prohibits domestic firms from establishing R&D institutes in the greater Seoul area. But in reality, there is little land available, and even if land is available, it takes years for them to undergo all necessary procedures.
But the planned relocation of government agencies and state-run corporations in the capital zone to provincial regions offers companies a golden opportunity to launch new R&D centers in Seoul and its vicinity. Under a balanced national development plan, the ministries housed in the Government Complex in Gwacheon are scheduled to move to Sejong City starting next year, while 52 public corporations are required to relocate to local cities by the end of next year. Business groups are pressing the government to convert the government complex into an R&D hub and allow them to use other office buildings as R&D centers.
For corporations, having R&D institutes in Seoul and nearby areas matters, because top-notch researchers shun R&D centers in smaller cities. They tend to put living environment -- education for children, access to information, health care and cultural activities, and social interaction -- before anything else.
Corporate officials have coined the term “Suwon Belt” to describe the difficulties of attracting high-caliber researchers for their local R&D centers. It means it is almost impossible to recruit talented researchers if the R&D centers are located south of Suwon, about half an hour’s drive from Seoul.
Given that Korean companies increasingly depend on R&D for their competitiveness, it is necessary to help them invite top-notch researchers from around the world. If the location of R&D centers matters, the government needs to help them find suitable sites. In principle, corporations should be able to set up R&D centers wherever they think will boost competitiveness most.
However, the government’s move touched off an immediate backlash from provincial governments, opposition parties, and lawmakers of the ruling Grand National Party who are from provincial areas. They worried that Lee’s initiative would prompt corporations to move their R&D centers to the capital area, worsening the already serious economic and population concentration in Seoul and Gyeonggi Province and sapping vitality from ailing local economies.
Ideally, the government should endeavor to foster R&D clusters in other areas by establishing a network for cooperation between government-funded research centers, university labs and corporate R&D institutions. In fact, the government has sought to nurture innovation clusters centered on provincial universities. But this policy has not paid much dividends due largely to the wide gap in social infrastructure between the capital zone and the rest of the country.
In formulating R&D policy, the government should not be swayed by political considerations. Top priority should be placed on enhancing the competitiveness of domestic companies because the future prosperity of the nation increasingly depends on them.
Boosting corporate R&D investment is necessary to attain the government’s declared goal of boosting Korea’s R&D spending to GDP to 5 percent by 2012. The ratio stood at 3.37 percent in 2008 and is estimated to have risen to 3.6 percent in 2009. To reach 5 percent by 2012, private sector R&D investment, which accounts for about 75 percent of the nation’s entire R&D spending, needs to be increased sharply.