[KR-JP Competitiveness] Stagnant Japan Chased by Korea... Gap in Core Technology Remains a Challenge

The secret behind South Korea's ability to narrow the technological gap with Japan lies in the simultaneous quantitative expansion and qualitative growth of the country's industrial technology over the past two years. It is noteworthy that the world's leading technologies, which were previously limited to displays and certain semiconductor fields (memory devices), have expanded to next-generation sectors such as smart shipbuilding, marine plants, and lithium secondary batteries. This is evaluated to be the result of the government and companies actively engaging in technology development to strengthen expertise in each field, triggered by the supply chain crisis of materials, parts, and equipment (SoBuJang) caused by Japan's export restrictions in 2019.

According to the 2019 Industrial Technology Level Survey report, which was unpublished by the Korea Institute for Advancement of Technology (KIAT), 24 fields were identified among 212 sub-categories as requiring 'early technology acquisition.' The report viewed that improving the technological gap was urgent in future core industrial sectors such as 'driving environment recognition technology' in autonomous vehicles and 'drive and power change' in electric hydrogen vehicles. In fact, in 2019, the technological gap in the autonomous vehicle sector was 1.7 years behind the United States, 0.6 years behind Japan, and China was closing in with a 0.3-year difference. At that time, the technology levels of Korea and Japan were 83.6% and 93.4%, respectively, showing a gap of about 10 percentage points.

The government also selected 25 strategic investment areas for industrial technology research and development (R&D) around the same time. In 2019, the government decided to expand the investment ratio of R&D budgets in core fields such as next-generation semiconductors, electric hydrogen vehicles, and advanced materials to about 95% by this year. The scale of overseas direct investment by companies also expanded significantly. In the following year, 2020, overseas investment reached $32.5 billion, 29 times the amount in 1990 ($1.133 billion).

Japan to Allow 'Guide-Free' Package Tours from September... Eases Entry Restrictions
(Tokyo AFP=Yonhap News) Japanese Prime Minister Fumio Kishida held a press conference at the Prime Minister's Official Residence in Tokyo on the 31st. He announced that from the 7th of next month, package tours without accompanying guides will be permitted, and the daily entry cap, currently around 20,000 people, will be increased to 50,000. 2022.08.31 ddy04002@yna.co.kr
(End) ＜Copyright(c) Yonhap News Agency, Unauthorized reproduction and redistribution prohibited＞

The results of these investments are fully reflected in the 2021 Industrial Technology Level Survey report recently published by KIAT. The technological gaps between Korea and Japan in autonomous vehicles, electric hydrogen vehicles, and next-generation semiconductors narrowed to 0.2 years each last year, and the most vulnerable fields, next-generation aviation and intelligent robots, also reduced the gap from 1.4 years in 2019 to 0.8 years and 0.7 years, respectively, last year.

However, the foundational root industry sectors that form the basis of manufacturing still face challenges in securing competitiveness. According to KIAT's survey on 'root industry technology levels' this year, Japan holds the highest technology level in nine fields, whereas Korea does not lead in any. The root industry includes six major technologies such as casting, mold, plastic processing, welding/joining, surface treatment, and heat treatment, as well as eight fields including injection molding, press, 3D printing, and precision machining. In terms of the technological gap between countries, the root industry shows the smallest gap between the U.S. and Japan at 0.1 years, while Korea's gap is 1.3 years, which is larger than in the 25 core fields. The industry identified R&D investment and infrastructure shortages as the top priorities to close the technological gap. Ultimately, securing technology requires continuous investment of costs and manpower.

Professor Sung Tae-yoon of Yonsei University's Department of Economics stated, "For South Korea to emerge as a country possessing top-tier technology, it is essential to actively support the technological capabilities of our companies and improve universities and research facilities so that they can have practical competitiveness."