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The research and development industry in Asia Pacific is expected to expand by more than USD200 billion over 2016-2025, which will be one of the main factors helping the region to become the second largest for business services globally. South Korea is the leading innovator in the region. According to Bloomberg’s 2017 ranking of the world’s 50 most innovative countries, South Korea topped the list in 2017.
This opinion is part of a global briefing Key Future Trends on Passport Industrial:Asia Century: Business and Recreational Services Shift East published on Passport Industrial.
Arguably, the main reason behind the country’s success is its commitment to higher education. South Korea is among the top spenders on education in Asia Pacific (the education industry’s turnover grew by 12% up till 2016, which helps it maintain one of the world’s highest enrollments into tertiary education ratio. Over two thirds of young adults (25-34-year-olds) in South Korea attain a tertiary education. This, in turn, generates the talent supply for the country’s research and development industry. For example, research personnel in the South Korean pharmaceuticals industry increased by 30% over 2011-2016.
The research and development industry’s collaboration with a high-tech private sector represented by research-intensive companies like Samsung and Hyundai also helps. Over 2011-2016, spending on the research and development industry in South Korea grew by more than 40%. It is also projected to increase at a constant CAGR of 5% over 2016-2021, which should boost the pool of scientists that not only research but also commercialise the research and, consequently, modernise the whole economy. The South Korean Government is also searching for new growth engines. The Government has promised USD9 billion in financial support to develop 20 new drugs. The desired effect of such generous incentives is to be among the top seven pharmaceutical-producing countries by 2020. If successful, these measures might just make the South Korea the next “Switzerland” in Asia Pacific in terms of biotechnology.
Finally, a favourable regulatory environment and financial aid are also helping to sustain growth in innovation within the country. Encouragement in the form of favourable policies and fund grants is also going a long way. South Korea has already lifted regulations covering some high-tech goods, including ones produced by the biotechnology industry. In 2017, the Ministry of Science established a USD101 million fund to support venture firms and start-ups in the biotechnology industry with the ambition to make the country a global biotechnology hub.