[Why&Next] Patent Applications Also Concentrated in 수도권 and Large Corporations... What Is the Solution?

Last year, 6.4 out of every 10 domestic patent applications were concentrated in the Seoul metropolitan area, and the trend of concentration in large corporations continued. There was also a clear correlation showing that as patent applications increased, the Gross Domestic Product (GDP) of the country grew as well. It has been pointed out that strengthening the competitiveness of the industrial ecosystem through a co-growth strategy between the metropolitan and non-metropolitan areas, as well as between large corporations and small and medium-sized enterprises (SMEs), is necessary.

According to the Korea Intellectual Property Office and the Korea Institute of Intellectual Property on the 24th, an empirical study (MPRA Paper·2011) shows that when the number of patents increases by 1 percentage point in the Group of Seven (G7) countries?namely the United States, the United Kingdom, France, Germany, Italy, Canada, and Japan?the GDP of those countries rises by 0.67 percentage points.

Korea also showed a similar trend from 1970 to 2017, suggesting that patents have a direct impact on the national economy. The Korea Institute of Intellectual Property analyzed that if the scale of domestic industrial property rights holdings increases by 1 percentage point, the industrial sales scale also increases by 0.35 percentage points.

Based on this, the Korea Intellectual Property Office explained that patent applications act as a leading indicator of corporate export activities. As patent applications increase, the export scale in the corresponding field grows proportionally. For example, patent applications in the secondary battery (cathode material) sector increased by 11.5%, from 7,770 cases in the first half of 2022 to 8,660 cases in the first half of last year, while the export scale of domestic companies in this field rose by 66%, from 4.5 billion dollars to 7.49 billion dollars.

Intellectual Property (IP) is a comprehensive concept encompassing patents, utility models, designs, trademarks, and industrial property rights. In Korea, it is estimated that more than half of corporate value consists of intangible assets. Recently, IP has been recognized as the most powerful tool necessary to secure industrial and national competitiveness, intensifying the global competition for IP acquisition.

According to the ‘Intellectual Property Statistical Insights’ published by the Korea Institute of Intellectual Property, a total of 191,145 patents were filed domestically last year. When broken down by five major regions, the Seoul metropolitan area accounted for the largest share at 64.2%, followed by the Yeongnam region (14.5%), Chungcheong region (12.7%), Honam region (6.5%), and Gangwon and Jeju (2.2%).

When the patent application shares of 17 metropolitan cities and provinces were distinguished, Gyeonggi-do accounted for 32.2% of the total, followed by Seoul at 28.3%, Daejeon at 6.1%, Gyeongbuk at 4.1%, and Incheon at 3.7%, ranking in the top five. Conversely, regions with low patent application shares (bottom five) included Jeju (0.6%), Ulsan (1.2%), Gangwon (1.6%), Gwangju (1.8%), and Chungbuk (2.1%).

Patent applications are closely related to the leading industries of each region. In Gyeonggi-do, which has the largest share of patent applications, the number of applications in semiconductor and computer-related technology sectors was the highest nationwide. Among non-metropolitan areas, Daejeon ranked third among the 17 cities and provinces, as many patents were filed by the Daedeok Research and Development Special Zone and government-funded research institutes under the Ministry of Science and ICT. The number of patent applications in the research and development sector in Daejeon significantly exceeded the national average.

Recently, as patent applications have increased mainly in high-tech, high value-added industries such as artificial intelligence (AI) and semiconductors, the concentration in large corporations has become more noticeable. In particular, the difference is more pronounced in regions with higher patent application growth rates.

Over the past three years, the compound annual growth rate (CAGR) of patent applications nationwide was 1.94%, with five regions?Jeonnam (5.5%), Gyeongbuk (4.9%), Gyeonggi (3.5%), Daejeon (2.9%), and Gangwon (2.8%)?all exceeding this rate. However, looking deeper, the CAGR for large corporations in these regions averaged 12.48%, which is very high, while the CAGR for individuals averaged -9.38%, showing contrasting trends. From the perspective of regional innovation, this suggests that the influence of large corporations, one of the innovation agents, has gradually increased, while the influence of individuals has gradually decreased.

There is growing support for the argument that Korea’s IP competitiveness will improve by reorganizing the IP map centered on the metropolitan area and large corporations. The Korea Institute of Intellectual Property stated, “Patent application statistics confirm that advanced industrial manufacturing companies with high patent application volumes and growth rates are concentrated in the metropolitan area,” and “Considering that patents serve as leading indicators from the perspective of industrial and corporate growth, it is necessary to reflect regional leading industry restructuring and corporate development strategies based on intellectual property statistics.”

The Korea Institute of Intellectual Property also added, “While the increase in patent applications centered on large corporations positively affects the total volume of innovation, the decrease in patent applications by individual applicants, which has relatively declined, may negatively impact the diversity of innovation,” and “It is important to continue efforts to secure new growth engines through the discovery of new technologies and industries centered on large corporations by region, while ensuring that large corporations’ technologies are transferred to individuals and regional SMEs to create a new industrial ecosystem.”