[Heart of Innovation, Corporate Research Labs 13] How NASA Fostered SpaceX

The Government Must Create World-Changing Plans and Support Private Research Labs
Partnering with the Private Sector Is the Only Way to Win the Global Technology Race

Editor's NoteThere is a growing call for a new driving force to revitalize the Korean economy, whose growth engine is fading. Corporate research laboratories, once the heart of our economy, no longer attract attention to what they are working on. IBM, a leader in the U.S. IT industry, has made a comeback after overcoming its 'lost decade.' A key secret to this revival was the rebuilding of its research labs. The founders of Korea's leading conglomerates once unanimously championed the idea of 'technology for the nation.' In the industry, there are increasing arguments that the spirit of these founders should be revisited and that a Korean-style research and development (R&D) DNA must be re-embedded in corporate research labs. Asia Economy will run a four-part series exploring the research labs of global companies, proposing the role of technology and policy in this era.

The scene where a rocket from SpaceX, the space company founded by Elon Musk, returned to Earth last year and was caught by a giant chopstick-shaped structure shocked not only those in science and technology but also ordinary citizens and policymakers. Countries striving to catch up with the United States in the space industry once again had to face disappointment at the widening technological gap.

SpaceX's Starship is returning to Earth after launch. Photo by AFP Yonhap News

How did SpaceX become a super-sized "unicorn" (an unlisted startup with a valuation of over 1 trillion won) that now dominates most satellite launches worldwide? While CEO Musk's leadership and generous investment in research and development (R&D) were certainly factors, the role of policy decisions cannot be overlooked. At the core of this transformation was the reinvention of NASA.

During the Cold War, NASA invested massive national budgets to directly conquer the moon and develop spacecraft traveling between space and Earth. Entering the 21st century, NASA completely changed its strategy. It retired the space shuttle and boldly entrusted the mission of transporting cargo to the International Space Station (ISS) to new private companies like SpaceX. This was a reversal in which a government agency gave up its dominant position and became a partner. NASA provided the substantial initial development funds needed to build spacecraft but did not interfere in the details of the process. Instead, it set clear goals, such as "successfully docking cargo at the ISS," and signed "performance-based contracts" that paid out promised funds each time a milestone was achieved. This demonstrates that government efforts are also crucial for corporate research labs to fulfill their roles.

Through this process, NASA secured space transportation capabilities at less than one-tenth the cost of operating the space shuttle in the past. The days when the United States invested 2% of its gross domestic product (GDP) in the 1960s to send people to the moon are gone. Instead, this became the decisive catalyst for the birth of SpaceX, the most innovative space company in human history. It proved that when the government steps back from being a direct player and focuses on creating an environment for the private sector to thrive, results beyond imagination can be achieved.

◆Make plans to change the world= The Defense Advanced Research Projects Agency (DARPA) is also well known for setting the direction of corporate research. DARPA has consistently presented clear and ambitious goals of "technologies that will change the world" and has assigned research projects to universities and private companies. Most of the innovative technologies that have shaped modern civilization-such as the internet, GPS, and stealth technology-began with DARPA's bold investments. DARPA's approach of tolerating failure and providing long-term, extraordinary support has become the best catalyst for maximizing private sector creativity.

Such policies have fostered numerous American corporate research labs as pioneers of technological innovation. Notable examples include the IBM Watson Research Center, Bell Labs under AT&T, and the General Electric (GE) Research Laboratory. These institutions produced technologies with national and historical impact, such as the transistor, solar cell, and UNIX operating system.

At Newark Airport in New Jersey, USA, where the coverage team arrived, a photo honoring the achievements of Thomas Edison, who established the first private corporate research laboratory, is displayed. Edison founded his laboratory in Edison, New Jersey, and today the GE Research Laboratory continues that legacy. Edison regarded failure as a natural part of the process and, after endless attempts, completed the incandescent light bulb. Paek Jongmin, Tech Specialist.

The GE Research Laboratory also holds the distinction of being the first industrial research facility in the United States. The starting point was the inventor Thomas Edison. Tungsten light bulb filaments, electric fans, electric stoves, the first home television, portable X-ray devices, CT scanners, and MRI machines all emerged from this lab. The impact of these inventions on humanity is beyond need of explanation.

Trust is also important. Companies must earn the government's trust as reliable partners. A researcher at the IBM Watson Research Center noted, "IBM was able to undertake critical national projects, such as nuclear weapons simulation during the Cold War, because it was trusted as a reliable company at the national level," adding, "Security is so strict that unless you are a U.S. citizen, you cannot even access major national projects."

The alliance between government and the private sector cannot last forever. There comes a time to part ways. Relying on government 'priming' is like being on life support. A representative example is IBM's quantum computer project. This project also began with substantial funding from the U.S. government. However, once the technology reached a certain level, the Watson Research Center's management boldly decided to cut government projects. The reason was to pioneer new paths based on the intellectual property (IP) secured beyond government assignments.

◆Public-private partnership is the only way to win in the global technology competition= The global competition for technological supremacy has now escalated into an all-out war, with nations mobilizing all their resources, far beyond battles between individual companies. In the invisible war to secure dominance in future industries such as semiconductors, artificial intelligence (AI), and aerospace, the traditional model of the government planning R&D projects and the private sector executing them can no longer guarantee survival.

Experts point out, "Restricting large corporations from participating in national R&D projects does not fit the global competitive environment." The capabilities of large corporate research labs, which bring together vast capital and top talent, are not being utilized as national assets. The approach of the government developing specific technologies and transferring them to small and medium-sized enterprises is no longer keeping pace with the market.

The report "Exploring Optimal Strategies for Government and Private R&D Support from a Policy Mix Perspective," published by the Korea Institute of S&T Evaluation and Planning (KISTEP), warns that the method of the government directly selecting projects and providing R&D funding can cause a "crowding-out effect" by displacing private investment. The report found that in leading R&D countries, direct government support had a negative impact on private R&D investment, whereas indirect support, such as tax benefits for large companies, was much more effective in stimulating private investment.

Ku Jakyun, President of the Korea Industrial Technology Association, also declared, "The government and private sector must unite to complement weaknesses and strengthen advantages through a 'one-team' strategy." While Korea's R&D investment as a percentage of GDP is among the highest in the world, the absolute amount still lags behind the United States and China. In this reality, public-private cooperation is no longer a choice but a matter of survival.