The government has increased R&D spending every year with a view to promoting economic growth. The R&D budget rose at an annual average rate of 8.2% from 2009 to 2013, reaching KRW16.87 trillion in 2013. The government’s increased spending in R&D is based on the expectation that the investment will have a larger impact on economic growth than any other types of investment. Without efficient allocation of the R&D budget, however, increased funding for research and development will fail to translate into economic growth. In this report, we assess the performance of national R&D programs, monitor how outcomes are managed and applied, and how research personnel are managed. Our analysis focuses on major R&D programs carried out by the Ministry of Science, ICT and Future Planning and the Ministry of Trade, Industry and Energy, as well as those of 24 government-funded research institutes dedicated to science and technology (S&T). We also propose ways to enhance the efficiency of national R&D funding.
Our evaluation resulted in several findings. First, despite increases in research expenditures, not all programs have shown stronger performance, pointing to possible inefficiencies in R&D spending. Of the 30 programs evaluated, the performances of 13 programs were found to be lower than the 2009-2011 average relative to their budget. This indicates the possibility of inefficiencies in R&D funding. The 13 programs whose performance fell in relation to their budget are those that fared less well in 2012 in one or more of the program-specific performance measures (maximum three), compared to the 2009-2011 average.
Second, the quality of R&D projects undertaken by individual researchers remained unchanged despite an increase in performance quantity. The individual research funding program of the Ministry of Science, ICT and Future Planning involved a budget of KRW3.06 trillion for the period 2008-2012 to support the activities of 39,572 researchers—junior researchers, middle-grade researchers, and senior researchers. A wider scope of beneficiaries resulted in improved quantitative measures. However, the quality of R&D performance has failed to rise in proportion to its quantitative growth. The number of articles published in SCI journals increased from 2,213 in 2008 to 9,410 in 2012, growing at an average rate of 43.6% during this period. However, the average IF(Impact Factor) of published articles was 2.85 in 2012, not appreciably higher than the 3.14 in 2008 and the 2.74 in 2009.
Third, we found that the outcomes of funded R&D carried out by conglomerates have not been actively utilized by small- and medium-sized enterprises (SMEs) or middle-standing enterprises. We analyzed the number of license agreements signed in 2011 and 2012 in connection with eight conglomerate-led R&D works funded by the Ministry of Trade, Industry and Energy. Our analysis showed that most license agreements were signed with a few conglomerates, indicating a low rate of application of the R&D output by SMEs or middle-standing enterprises. Regarding the Ministry of Trade, Industry and Energy’s program to develop generic technology for a green car transport system, 51.4% of government research funding in 2011 was allocated to conglomerates. Of 67 license agreements signed in 2011 and 2012, 27, or 40.3%, were concluded with a large business affiliated to a business group subject to cross-shareholding restrictions.
Fourth, it was found that the National Research Foundation of Korea and the Korea Evaluation Institute of Industrial Technology, which are specially charged with monitoring and managing R&D programs, could not successfully manage the detailed accounting of R&D funds. The National Research Foundation of Korea failed to get an accurate grasp of R&D expenditures for each program through its information management system, and it was found that the total amount of R&D expenditures by project was not consistent with the sum of itemized expenditures. The Korea Evaluation Institute of Industrial Technology established a real-time integrated research expenditure management system, which has been in place since 2010, but is not yet able to apply the system to all the R&D programs subject to its monitoring and management.
Fifth, because of the excessive proportion of irregular research personnel in government-funded research institutes, R&D capabilities will likely be difficult to manage, much less to maintain. Rather than instituting a long-term employment plan, many government-funded S&T research institutes depend heavily on researchers on fixed-term contract for their R&D activities. Thus, resolving the issue of imbalance in the supply and demand of research personnel will be necessary. In 2012, the number of irregular researchers in government-funded research institutes was 5,527, or 32.8% of the total 16,833 number of researchers. This figure represents an 8.6% increase from 2011, when the number of irregular researchers was 5,089 out of a total of 15,969. Some institutes have an even higher proportion of irregular researchers, which likely impacts their ability to maintain or manage their research capacity.
Sixth, our analysis of the 24 government-funded S&T research institutes revealed that the amount of spending on commissioned research or joint R&D activities in the direct cost of government-funded R&D programs was considerably higher for the period 2011-2012. This warrants an investigation into whether the increased expenditures are being misused for something rather than the intended goal of creating a stable research environment for government-funded research institutes. The direct cost of major R&D programs carried out by the 24 research institutes rose from KRW 593.9 billion in 2010 to KRW 773.0 billion in 2012 at an average annual rate of 14.1%. However, spending on commissioned research or joint R&D activities rose from KRW 54.5 in 2010 to KRW 79.7 billion in 2012 at an annual average rate of 22.8%. A sizable portion of the direct cost, which was raised through increases in government contributions, is going into commissioned research or joint R&D activities with external organizations, raising concerns that increased government funding may not be conducive to strengthening the internal R&D capacity of government-funded research institutes.
To conclude, the government needs to enhance the efficiency of its R&D investments by looking at programs that have performed poorly relative to the amount invested, and perhaps, adjust the amount of funding for these programs. It must also establish a more rigorous R&D performance monitoring and management system to ensure that the outcomes of R&D can be applied across all industries. Any expansion in funding for government-funded research institutes must go hand in hand with achieving a balance in budget and research personnel.
Yoon Sungshik
Our evaluation resulted in several findings. First, despite increases in research expenditures, not all programs have shown stronger performance, pointing to possible inefficiencies in R&D spending. Of the 30 programs evaluated, the performances of 13 programs were found to be lower than the 2009-2011 average relative to their budget. This indicates the possibility of inefficiencies in R&D funding. The 13 programs whose performance fell in relation to their budget are those that fared less well in 2012 in one or more of the program-specific performance measures (maximum three), compared to the 2009-2011 average.
Second, the quality of R&D projects undertaken by individual researchers remained unchanged despite an increase in performance quantity. The individual research funding program of the Ministry of Science, ICT and Future Planning involved a budget of KRW3.06 trillion for the period 2008-2012 to support the activities of 39,572 researchers—junior researchers, middle-grade researchers, and senior researchers. A wider scope of beneficiaries resulted in improved quantitative measures. However, the quality of R&D performance has failed to rise in proportion to its quantitative growth. The number of articles published in SCI journals increased from 2,213 in 2008 to 9,410 in 2012, growing at an average rate of 43.6% during this period. However, the average IF(Impact Factor) of published articles was 2.85 in 2012, not appreciably higher than the 3.14 in 2008 and the 2.74 in 2009.
Third, we found that the outcomes of funded R&D carried out by conglomerates have not been actively utilized by small- and medium-sized enterprises (SMEs) or middle-standing enterprises. We analyzed the number of license agreements signed in 2011 and 2012 in connection with eight conglomerate-led R&D works funded by the Ministry of Trade, Industry and Energy. Our analysis showed that most license agreements were signed with a few conglomerates, indicating a low rate of application of the R&D output by SMEs or middle-standing enterprises. Regarding the Ministry of Trade, Industry and Energy’s program to develop generic technology for a green car transport system, 51.4% of government research funding in 2011 was allocated to conglomerates. Of 67 license agreements signed in 2011 and 2012, 27, or 40.3%, were concluded with a large business affiliated to a business group subject to cross-shareholding restrictions.
Fourth, it was found that the National Research Foundation of Korea and the Korea Evaluation Institute of Industrial Technology, which are specially charged with monitoring and managing R&D programs, could not successfully manage the detailed accounting of R&D funds. The National Research Foundation of Korea failed to get an accurate grasp of R&D expenditures for each program through its information management system, and it was found that the total amount of R&D expenditures by project was not consistent with the sum of itemized expenditures. The Korea Evaluation Institute of Industrial Technology established a real-time integrated research expenditure management system, which has been in place since 2010, but is not yet able to apply the system to all the R&D programs subject to its monitoring and management.
Fifth, because of the excessive proportion of irregular research personnel in government-funded research institutes, R&D capabilities will likely be difficult to manage, much less to maintain. Rather than instituting a long-term employment plan, many government-funded S&T research institutes depend heavily on researchers on fixed-term contract for their R&D activities. Thus, resolving the issue of imbalance in the supply and demand of research personnel will be necessary. In 2012, the number of irregular researchers in government-funded research institutes was 5,527, or 32.8% of the total 16,833 number of researchers. This figure represents an 8.6% increase from 2011, when the number of irregular researchers was 5,089 out of a total of 15,969. Some institutes have an even higher proportion of irregular researchers, which likely impacts their ability to maintain or manage their research capacity.
Sixth, our analysis of the 24 government-funded S&T research institutes revealed that the amount of spending on commissioned research or joint R&D activities in the direct cost of government-funded R&D programs was considerably higher for the period 2011-2012. This warrants an investigation into whether the increased expenditures are being misused for something rather than the intended goal of creating a stable research environment for government-funded research institutes. The direct cost of major R&D programs carried out by the 24 research institutes rose from KRW 593.9 billion in 2010 to KRW 773.0 billion in 2012 at an average annual rate of 14.1%. However, spending on commissioned research or joint R&D activities rose from KRW 54.5 in 2010 to KRW 79.7 billion in 2012 at an annual average rate of 22.8%. A sizable portion of the direct cost, which was raised through increases in government contributions, is going into commissioned research or joint R&D activities with external organizations, raising concerns that increased government funding may not be conducive to strengthening the internal R&D capacity of government-funded research institutes.
To conclude, the government needs to enhance the efficiency of its R&D investments by looking at programs that have performed poorly relative to the amount invested, and perhaps, adjust the amount of funding for these programs. It must also establish a more rigorous R&D performance monitoring and management system to ensure that the outcomes of R&D can be applied across all industries. Any expansion in funding for government-funded research institutes must go hand in hand with achieving a balance in budget and research personnel.
Yoon Sungshik