By Kim Hyun-cheol
Staff Reporter
The government plans to invest a total of 300 billion won ($260 million) through 2012 to nurture the local services sector through research and development (R&D) projects. The plan was unveiled by the Ministry of Knowledge Economy at a meeting of economy-related ministries Wednesday.
The research will seek to enhance the quality of products and innovate manufacturing processes with technology.
``The most standout cases of services R&D are found in Apple and Google,'' a ministry spokesman said. ``Apple first released the iPod, then developed the iTunes service to manage contents and derivative sales. Google pushed its boundary from a Web search engine to produce cell phones using the Android platform it developed.''
Several local companies are also benefiting from service-sector R&D efforts these days. Naver, the nation's No. 1 Web portal site, attracted more users by updating the array of its core content based on analyzing the habits and behaviors of Web surfers.
Indoor screen golf courses, prevailing here these days, are another good case of such activities in a successful combination of sensor and virtual simulation technologies and golf.
Half of the 300 billion-won budget in the project will be concentrated on basic research. In applications, activities will be mainly focused on high-value services industries such as education, health care and finance, as well as business services, including design and advertisements.
It is urgent to enhance the sector to level up the Korean economy, but productivity of related local industries is only about half of that in most industrialized countries, the ministry said.
Investment also has remained low. In 2008, it amounted to 57 billion won, or 2 percent of the overall government R&D investment, while Germany spent nearly 15 percent of its budget on the services sector in 2004.
Renovation is the priority in the service sectors to introduce a systematic measure to spur up its productivity, the ministry said.
``So far, Korean industries took it for granted to invest in R&D for products, but questioned the same necessity in services,'' an official of the ministry's investment-related department said. ``This project will give the country an opportunity to spend more in the long term on this emerging market.''