Korea’s Corporate R&D and Digital Transformation: Present Landscape and Strategic Directions

Minsung Kang
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Minsung Kang: Korea Institute for Industrial Economics and Trade

Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: This paper analyzes R&D investment and Digital Transformation (DX) technology utilization at South Korean manufacturing and service enterprises during the period from 2017 to 2023 using data extracted from the Survey of Business Activities by the Ministry of Data and Statistics.

Overall, R&D activity levels are higher, more consistent, and more intensive in the manufacturing sector than in the service sector, but even as service firms are less likely to engage in R&D, they have pursued digital transformation (DX) at a higher rate, albeit with greater variability and significant size-based polarization.

DX contributes more to competitiveness in services than in manufacturing, and small firms lag significantly in both sectors.

Based on the results of the analysis, the paper recommends expanding customized integrated support packages, building a full-cycle DX support system with strong human capital development, and shifting the regulatory sandbox toward a more flexible, ex post regulation framework to accelerate adoption and reduce disparities.

Keywords: innovation; innovation activities; research and development; R&D; corporate R&D; R&D investment; digital transformation; DX (search for similar items in EconPapers)
JEL-codes: L60 O31 O32 O33 O38 (search for similar items in EconPapers)
Date: 2026
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Published in KIET Industrial Economic Review Vol. 31, No. 1

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