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Restructuring of private sector R&D: Korea's response to economic crisis
Yong-Tae Park
Seoul National University, South Korea
Abstract
In general, private sector R&D is sensitive to business cycles, as the case in Korea demonstrates. As a result of the present economic crisis, R&D centers of private firms are at the forefront of the economic restructuring process. New organizational structures, such as decentralization, contract funding, and development of strategic partnerships are becoming prevalent. Structural reform has had positive effects, enhancing the flexibility and productivity of R&D operations, and it has even contributed to rebuilding Korea's national R&D structure. Negative impacts, however, have also been substantial. A focus on short-term results threatens to destroy the long-term strategic base of some corporate R&D. A cause for concern in rebuilding Korea's economy lies in the increasing complexity and irregularity of the business cycle. If the periodicity of the conventional cycle changes, planners become unable to align R&D with anticipated cyclical variations. Restructuring of R&D during periods of economic crisis should determine, not react to, the business cycle. This article provides a prescription for proactive planning that applies to other Asian countries in similar circumstances.
Keywords
Korea, private sector R&D, business cycles, economic crisis, restructuring, economic reform
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