SEOUL, South Korea - In a notable divergence from economic trends, South Korea's largest companies significantly increased their investments in research and development (R&D) in 2023, reaching a record high even as their overall earnings declined. Data released on Sunday highlighted that the top 1,000 South Korean companies invested a combined total of 72.5 trillion won (approximately $52.12 billion) in R&D last year, marking an 8.7 percent increase from the previous year.
According to Yonhap News Agency, Industry and Energy and the Korea Institute for Advancement of Technology, this investment was the highest ever recorded, despite a 2.8 percent drop in sales to 1,642 trillion won. The proportion of corporate R&D spending relative to sales also increased, rising to 4.4 percent in 2023 from 3.9 percent the prior year, underscoring a strategic emphasis on innovation amidst economic slowdown.
Tech giant Samsung Electronics Co. led these expenditures with a significant R&D investment of 23.9 trillion won, which was up 14.4 percent year-on-year and constituted 32.9 percent of the total R&D spending by South Korean firms. Hyundai Motor Co., another major player, followed with 3.7 trillion won, showing a 15.6 percent increase in R&D expenditures. Meanwhile, SK hynix Inc. saw a decrease in its R&D spending by 10 percent to 3.6 trillion won.
Other significant contributors included LG Electronics Inc., which boosted its R&D budget by 10 percent to 3.3 trillion won, and Samsung Display Co., which increased its R&D spending by 12 percent to 2.8 trillion won. Kia Corp. was also among the top investors in R&D, allocating 2.2 trillion won last year.
The data also revealed a growing trend among mid-sized companies in their commitment to R&D, with 171 large conglomerates and 491 second-tier mid-sized companies among the top investors. The government has expressed intentions to extend further support to these firms to foster innovation.