- A 9-fold increase of the number of companies and KOSDAQ-listings for the first time in 16 years since the first designation of Daedeok Special Zone in 2005

- On average, one company in the Special Zone employs 51.7, 12.6 more than outside manufacturers (as of 2019)

□ Ministry of Science and ICT (“MSIT”) led by Minister Choi Kiyoung and Korea Innovation Foundation (“the foundation”) led by President Kang Byeongsam announced that the R&D Special Zones have continuously shown signs of growth through innovation, with the number of companies inside the zones is up 9.8-fold, KOSDAC listings 9-fold, and the revenue 21-fold for the first time in 16 years after Daedeok was chosen as an R&D Special Zone in 2005.  

* The result became available after collecting data of the five major Special Zones and six "Gangso" Special Zones (excluding the six new ones selected in 2020) from July to December in 2020, and comparing them with Research and development activity survey report (2019) and national business survey by Statistics Korea (2019)

ㅇR&D Special Zones serve as Korea’s symbol of innovation, accommodating government-funded research institutes (52)*, research institutes (44), education institutes (34), other public agencies (74), non-profit organizations (49), companies (6,782). Innovators outside the metropolitan areas have created clusters in the Zones.  

* Government-funded research institutes include regional headquarter centers and regional base centers (TK-region research center, south-east regional base centers, and others)

ㅇ Data so far indicate the R&D Special Zones have achieved innovation-driven growth. Since the designation of Daedeok Special Zone in 2005, as of 2019, the number of companies inside the zones has gone up 9.8-fold (687 in 2005→6,782 in 2019), the revenue 21-fold (KRW 2.5T in 2005 → KRW 54.6 in 2019), and KOSDAC listings 9-fold (11 in 2005→ 99 in 2019).

< Status of Special Zones and its history >

□ In addition, 6,782 companies in special R&D zones account for 0.1% of the total number of companies in the country, which stands at 4,176,549. However, companies in special R&D zones outperform general manufacturing companies or small and medium-sized enterprises nationwide by taking up eight times more revenue and ten times more employees than their counterparts.      

* (Revenue) KRW 6,195 trillion revenue nationwide, KRW 54.6 trillion revenue in special R&D zones, (Employees) 19,281,000 employees nationwide, 229,000 employees in special R&D zones

ㅇ The average number of employees in manufacturing industry in special R&D zones is 51.7 which is 1.3 times higher than the national average of 39. This shows that manufacturing companies in special R&D zones are hiring 12.6 more people than general manufacturing companies per company.

< Comparison of the average number of employees of companies in special R&D zones with general manufacturing companies nationwide >

* Source: Survey on manufacturing by Statistics Korea, Special R&D zone statistics survey (2019) (companies with over ten regular employees in manufacturing industry)

ㅇ In particular, the average revenue of small and medium-sized enterprises in special R&D zones is 1.5 times higher than SMEs nationwide. Small and medium-sized enterprises in special R&D zones have 1.7 times more average number of employees and 1.2 times higher average R&D cost. This indicates that special R&D zones are growing together with small and medium-sized enterprises.

< Comparison of SMEs in special R&D zones with SMEs nationwide >

* Source: Survey on companies nationwide by Statistics Korea, Special R&D zone statistics survey (2019) (SMEs with revenue over 500 million won)

□ Special R&D zones have been recognized as the scientific and technological hub of the Republic of Korea where 12.5% of national R&D funding goes to (34.5% of government R&D funding) and they have abundant pool of researchers showing outstanding research results.

ㅇ In special R&D zones, there are 52,390 postdoctoral researchers and this accounts for 46.8% of the total 105,672 postdoctoral researchers nationwide.

ㅇ In addition, special R&D zones take up about 40% in nationwide public technology transfers and fees from transferring public technology. Commercialization activities have been actively carried out using public technology.

< Status quo of commercialization using public technology >

* Source: Survey on public technology transfer and commercialization by MOTIE, Special R&D zone statistics survey (2019)

□ The MSIT supports entrepreneurship and business growth by establishing “Innopolis research institute spin-off companies” and supporting their growth, designating “Innopolis high-tech research companies,” and offering “accelerating programmes” in the R&D district.

* 2021 budget: KRW 141.9 billion for Innopolis Fostering Program (R&D); KRW 28.3 billion for Innopolis operation and infrastructure managment; KRW 9.5 billion for technology commercialization investment

** 1,108 Innopolis research institute spin-off companies (accumulated); 194 Innopolis high-tech research companies (as of December 2020)

ㅇ Thanks to the MSIT’s steady support, as of 2019, 29 companies out of the 99 KOSDAQ-listed companies in the Innopolis (29.2%) were able to grow, based on the research institute spin-off and high-tech research company programs.

ㅇ Moreover, according to the analysis of the fast-growing companies in the Innopolis that recorded over 10-fold growth in sales between 2006 and 2018, 15 companies* out of the 28 were able to grow through the programs of the Innopolis, such as research and business development (R&BD) or the designation as Innopolis high-tech research company.

* e.g. KolmarbillionH (research institute spin-off company), Silicon Works (high-tech research company, R&BD), LegoChem Biosciences (R&BD), WithTech (R&BD, high-tech research company), Peptron (high-tech research company, R&BD), Golfzon (high-tech research company)

□ The companies in the Innopolis takes up about 20-37% of the new growth sector* in terms of sales, number of employees, R&D expenditures, demonstrating their potential as a hub for the Korean New Deal.

< New Growth Sector Companies in Innopolis >

* New growth sector companies: companies that fall under the three strategic areas of investment (big data, AI, hydrogen economy) and the eight major sectors (future car, biohealth, smart factory, fintech, energy, smart city, smart farm, drone) in the Strategic Investment Strategy for Innovation-led Growth (Aug. 2018) published by the Ministry of Economy and Finance.

□ In the initial stages, government-funded research institutes and research companies led the growth of the Innopolis, but these days, the partnerships between local large businesses and SMEs are growing and facilitating the business-led innovation cluster ecosystem.

□ Minister Choi Kiyoung of the MSIT said, "The Innopolis is an essential space for regional innovation needed for the success of the Korean New Deal and Regional Balance New Deal. It is an exemplary case of the "Korean model of science and technology innovation cluster," which is shared across more than 70 countries, including Brazil and Indonesia, since 2008. The MSIT will continue to nurture the R&D District to lead national innovation and regional development."