By Kim Yoo-chul
Staff Reporter
U.S. tech giant Hewlett-Packard (HP) is drawing harsh criticism for failing to carry through its promise to establish a large-scale research-related investment in South Korea.
In 2004, the Palo Alto, Calif.-based company said it will spend $40 million over the next five years on its research laboratory named ``Korea Development Center.’’
Following the announcement to maximize the bold advertising effect, South Korea’s then Information and Communication Minister Chin Dae-je and HP’s Chief Executive Carly Fiorina attended an opening ceremony for the lab in Seoul to develop technologies for radio frequency identification (RFID) and mobile communications.
The U.S. company even announced Marc McEachern, then chief of Japan’s mobile and media system research center, had been named to lead the research. But he quit the position a year ago for personal reasons.
The 300 square meters of space on the second floor of HP’s South Korean office in the city, which the company had pledged to renovate for the studies, are now being used for conferential purposes only, according to insiders.
In the lobby, which HP had promised to renovate to showcase the products of the research, a demo booth named ``Adoptive Infrastructure Discovery Center’’ is installed, instead.
``The country’s information ministry and HP initially agreed to invest $30 million and $10 million, respectively, in the form of a `matching fund’ to use intellectual properties of the products under the project,’’ a high-ranking official from the Ministry of Information and Communication told The Korea Times, Friday.
``However, I confirm that no study has been reported jointly with the U.S. company since then.’’
The official said both parties had failed to narrow differences over sharing of the intellectual property rights to potential products.
The RFID technology, known as a supercharged version of the barcode, can help track goods, automate banking services and improve product quality.
South Korea and Japan are making joint efforts to develop RFID standards. They are following a similar alliance that was formed to develop standards for the Linux operating system.
HP allocated $150 million in funding between 2004 and 2008 for the research and development of RFID. And market research firm Allied Business intelligence estimates global revenue generated from tags, readers and software and services could reach $3 billion by 2008.
To capitalize on this booming sector especially in tech-savvy South Korea, HP had considered conducting related projects under the bold support by the South Korean government.
Although it struck a memorandum of understanding with local Lotte Data Communication Company in May last year for finding business models in connection with the RFID segment, most of its research was reportedly known as an initial step, according to industry sources.
``As HP’s main business focus is to provide computer operating systems and System Integration, I can say no distinctive roles are expected from the company relating to the RFID sector,’’ an official from Lotte said.
``We were investing over 30 billion won in R& Ds of RFID-related projects so far this year, however, the amount is not solely for local research,’’ an official from HP Korea said. He added that the government’s focus shift to ``reader-based’’ from ``tag-based’’ hampers the company’s active roles in the sector.
The Roh Moo-hyun administration has sought to make a research center in the Northeast Asian region with an aim to be counted among the top seven nations in scientific research by 2025.
Despite tax and administrative incentives for foreign companies managing their research centers here ― companies investing a minimum of $50 million in research become eligible to apply for a hiring and training subsidies ― concerns over the ambitious goals were running high.
Intel, the world’s largest semiconductor maker, virtually closed its research center here last year in what the company said as a part of its global restructuring program.
According to a recent research of foreign companies here conducted by the Korea Chamber of Commerce & Industry, about 25 percent of the respondents said they have no plan to set up a research center, citing the small market and lagging technology competence.