Government Promised to Foster Advanced Robots, but Investment Shrinks Putting Startups at Risk

R&D Budget Cuts and Decline in Private Investment
"Startups Will Abandon Projects Next Year in Droves"

The domestic startup sector researching and developing advanced robots has encountered a crisis. The government had selected the advanced robotics industry as one of the 12 national strategic technologies and supported research and development (R&D) budgets, but this year the budget was drastically cut. With private investment also freezing up, there are forecasts that many companies will give up their projects next year.

According to the startup industry on the 11th, a leading domestic startup researching and developing advanced robots recently carried out large-scale workforce reductions except for key personnel. An industry insider explained that this was because the government support funds decreased this year, making it impossible to maintain the existing workforce and continue the business.

A representative from an advanced robotics startup said, "Due to the R&D budget cuts this year, most startups relying on government investment are facing difficulties in their business," adding, "Given the nature of the advanced robotics field, research periods are long, and it takes considerable time to generate profits from actual products or technologies. Both government and private funding sources have dried up, creating a widespread sentiment that they will not be able to survive next year."

On the 23rd, a robot is preparing to kick a ball at the '2024 RoboWorld' held at KINTEX Exhibition Hall 1 in Goyang, Gyeonggi Province. The photo is not directly related to the article content. Photo by Kang Jin-hyung

The government has emphasized investment in 12 national strategic technologies over the past several years, including ▲semiconductors and displays ▲secondary batteries ▲artificial intelligence ▲advanced mobility ▲next-generation nuclear power ▲advanced bio ▲aerospace and marine ▲hydrogen ▲cybersecurity ▲next-generation communications ▲advanced robotics and manufacturing ▲quantum.

However, after President Yoon Seok-yeol's remarks on the 'R&D rent cartel' last year, this year's R&D budget was significantly reduced. Except for next-generation nuclear power, budgets for all fields were cut, with advanced robotics suffering the largest blow, decreasing by 34% compared to the previous year. As more than a year has passed, the impact of budget cuts on each company is becoming more concrete.

Private investment has also frozen due to the economic downturn. According to data from The VC, a venture investment information company, the number of investments in startups and small and medium enterprises in the first half of this year was 497, a 32% decrease compared to the same period last year. The investment amount was 2.6461 trillion won, down 19.5% from the same period last year.

Although next year's R&D budget will increase compared to this year, the industry feels uneasy. This is because competition is expected to intensify as companies that halted research this year for new project recruitment will jump in all at once. According to the Ministry of Economy and Finance, despite the fact that, for the first time in history, a reduced budget bill was passed solely by the opposition party, next year's R&D budget increased by 3.1 trillion won compared to this year.

A startup industry insider said, "It is a good thing that the R&D budget has increased. However, to revive the business that declined this year, rapid cost input is necessary, but due to the nature of government budgets, this does not seem easy," adding, "Ultimately, private investment is desperately needed."