Next year's government R&D budget is set at 2.59 trillion won, reflecting a 16.6 percent reduction from the previous year. The proportion of the R&D budget relative to total government spending has also dropped from 4.9 percent to 3.9 percent. The budget cut, the first in 33 years, has raised questions within the science and technology community, as the reasons behind these cuts and the allocation of increased funds remain unclear. As the National Assembly begins its budget deliberations, ChosunBiz aims to shed light on the specifics of the R&D budget cuts and the rationale behind any budget increases. [Editor's Note]
This is what Minister of Science and ICT Lee Jong-ho said on Mar. 7 while announcing the First National R&D Mid-to-Long-Term Investment Strategy. The strategy provides an overview of the investment goals and directions for the national R&D budget for the next five years. The Yoon administration established this framework to ensure predictable and strategic R&D investment.
As part of the strategy, the Yoon administration has committed to allocating 170 trillion won to R&D investments for the period spanning 2023 to 2027.
The administration has further outlined specific objectives for the R&D budget, aiming to elevate Korea's technology standing from its current 80 percent of the global technology leaders to 85 percent by 2027. The government plans to achieve this goal by implementing four key strategies and 23 designated tasks.
The strategy was not created by a select group of government officials. Instead, it was developed in a more collaborative and inclusive manner.
A committee consisting of 130 experts was established in October 2021, followed by a public hearing in November 2022, and a meeting with the industry in December of the same year. Finally, in February of this year, the strategy was finalized at a meeting of the Presidential Advisory Council on Science and Technology, which is the highest body responsible for coordinating and deliberating policies in the field of science and technology.
The strategy, carefully crafted by hundreds of experts and business stakeholders for almost a year, was overturned in less than six months after it was announced. All it took was one person.
After President Yoon ordered a complete review of the R&D budget at the National Financial Strategy Meeting on June 28, the Ministry of Science and ICT and the Ministry of Economy and Finance hastily devised a new budget proposal. The proposed 2024 R&D budget, which was re-released in late August, was cut by 16.6 percent from last year to 25.9 trillion won. While many people are focused on next year's R&D budget, experts say the real problem is that the effects of the budget cuts will continue even after next year.
In September, the Ministry of Economy and Finance presented the National Financial Management Plan for 2023-2027 to the National Assembly. It featured a reduction in the R&D budget allocation through 2027. As outlined in the First National R&D Mid- and Long-Term Investment Strategy released in March, the government's initial plan was to invest 170.5 trillion won in R&D over the upcoming five-year period through 2027. However, the subsequent National Financial Management Plan released in September revealed a revised figure of 145.7 trillion won. That's a drop of 24.8 trillion won in just six months.
"One-fifth of the investment was wiped out without any communication or notification that it would be revised," said a member of the science and technology community who participated in the strategy formulation. "I don't understand why we have an investment plan if it can be overturned at the word of the president."
According to the Ministry of Economy and Finance's National Financial Management Plan, the R&D budget is expected to be reduced to 25.9 trillion won in 2024, 27.6 trillion won in 2025, 29.5 trillion won in 2026, and 31.6 trillion won in 2027. It will only return to this year's R&D budget level of 31.1 trillion won in the year 2027. This is more than 6 trillion won per year below the original plan. In the National R&D Mid- and Long-Term Investment Strategy, the R&D budget is set at 32 trillion won in 2024, 33.6 trillion won in 2025, 35.7 trillion won in 2026, and 38.1 trillion won in 2027.
The National Assembly Budget Office also emphasized that "the R&D budget has decreased significantly in comparison to the gradual increase in the past, which may hinder predictability and cause confusion in the research field," and that "the budget adequacy for the next year should be reviewed again as it may lead to a reduction in corresponding investments by private companies."
This article was originally published on Nov. 1, 2023.