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[Editorial] Tech Competitiveness for the Post-crisis Era

[Editorial] Tech Competitiveness for the Post-crisis Era

Posted January. 29, 2009 07:03,   

한국어

Yudo Co. in Hwaseong, Gyeonggi Province, employs just 170 workers but is Asia’s largest and the world’s second-biggest manufacturer of a hot runner system, a core material for plastic molding. After independently developing the system, Yudo has evolved into a global company by continuously devoting itself to research and development. YG-1, which makes cutting tools in Incheon, and SJM, a car parts manufacturer in Ansan, Gyeonggi Province, are also examples of promising small companies that dominate the world market with their technological competitiveness.

If Korea had many such companies, there would be no reason to worry. A report by the Bank of Korea, however, is a sobering reminder of the dismal state of the country’s technological competitiveness. Korea’s balance of technology trade was 0.43 times in 2007. This means technology imports were twice that of exports. The figure was far behind Japan’s (3.49 times) and ranked third from the bottom among member countries of the Organization for Economic Cooperation and Development. Korea also posted a deficit of 3.4 billion dollars in patent royalties the same year. Among major export items in the country, many are made from parts and raw material produced abroad, especially in Japan.

The global economic crisis will bring about a big change in the global economic order. National competitiveness will mainly depend on technological competitiveness, which has a significant influence on productivity in manufacturing. Countries with a technological edge will gain the upper hand in the global arena. In this context, a balanced effort is needed to overcome the economic crisis on the one hand, and prepare for the post-crisis era by investing in research and development and raising technological prowess on the other.

The United States, the world’s largest car market, is reportedly making a green car guideline to significantly raise fuel efficiency by 2020. Given this, it’s no exaggeration to say the fate of the domestic auto industry depends on the development of core green technology for cars. Effective investment in new technology is possible only when the government and business closely cooperate.

Accordingly, the Korean government should push for policies aimed at boosting core technology needed in manufacturing. Also important is creating a favorable environment for companies that possess their own technologies but are temporarily suffering a credit crunch and protecting them from hostile mergers and acquisitions. By doing so, the government can help them devote themselves to technological development and finding new markets overseas.