1. Enactment of the Technology Development Promotion Law
The Technology Development Promotion Law was enacted in 1972 for the purpose of strengthening international competitiveness of enterprise and contributing to national economy development by promoting the development of industrial technology and the introduction and improvement of technology and by disseminating the results.
2. Content of the Technology Development Promotion Law
First, the Technology Development Promotion Law permitted the individual who introduced foreign technology in a way that the law regulated or in other ways could reserve the technology development reserve fund. Secondly, if the individual who imports products whereby localization is possible by domestic technology and invests a percentage of the revenue from it in technology development, he/she can receive support from the government. Thirdly, it allowed the free transfer of parts of industrial property rights, resulting in research and development toward the individual who conducted the research and development by contact and the exemption of license partly or all.
3. Changes of the Technology Development Promotion Law
The Technology Development Promotion law has revised several times to expand targets and the business types that can reserve the technology development reserve funds, the coverage of technology development reserve fund usage and enterprises’ technology development system.
4. History of Policy Development for Technology and Innovation Promotion
In the late 1970s when technology development capabilities were still weak, companies’ proactive efforts and extensive introduction of advance technologies were essential and, they needed to transfer from batch introduction where capital and technology were directly linked to a core technology-focused approach for selective introduction.
Since the late 1970’s, for industrial technology development, securing independence in the heavy chemical industry was a top priority. To support construction of company-affiliated research centers, in the Technology Development Promotion Act it was recommended to build or expand research facilities for companies in machinery, ship-building, electronics, electrics, metal and chemical engineering that lacked internal research facilities or to improve existing ones. Entering 1980, the goal was to advance technology a level up to global standards and establish technology development cooperation to localize plants and go overseas with Korean technology. To support the corporation, loan lending for companies technology development, loan to make business use of research outcomes, technology labor expense loans for industrial facilities and research equipment rentals were provided. For businesses utilizing outcomes of domestic technology development in business for the first time in the country, tax and financial incentives were provided.
In 1980, as measures to address weak technology competence of SME, it was encouraged to establish industrial technology development unions, implement joint research initiatives of the government and private companies and strengthen technology guidelines. The government backed these strategies with taxes and financially. For taxes, Korea increased budget limits for the technology development reserve fund, created tax deduction programs for technology and human resource development and revised tax deduction systems for research facilities. Financially, the Korea Technology Development Corporation, Korea Development Bank, and the Small and Medium Industry Bank increased technology development funds and the government directly subsidized funds for private corporations (Almanac of Science and Technology, 1982). The improvements and expansion of the technology innovation support system continued in 1990s and 2000s, slightly adjusted with market conditions and changes the benefits from the R&D investment scale to increased amounts of investment.
[Government Support System for Private R&D]