In the first half of this year, Korea's knowledge service trade deficit reached about 6 trillion won. The increase came as manufacturing paid more royalties for technology patents and placed more research and development (R&D) orders, while subscriptions rose for overseas generative AI (artificial intelligence) apps and over-the-top (OTT) video services.
According to the "knowledge service trade statistics for the first half of 2025," released by the Bank of Korea on the 17th, the knowledge service deficit in the first half came to $4.53 billion (about 6.26 trillion won). The shortfall widened by $770 million from the second half of last year (-$3.76 billion).
The knowledge service trade statistics cover four major knowledge service categories within services: ▲ intellectual property royalty payments ▲ information and communications services ▲ cultural and leisure services ▲ professional and business services. They mainly include promising services produced on the basis of knowledge and information with high growth potential.
By item, the intellectual property royalty deficit increased from $1.404 billion in the second half of last year to $2.45 billion in the first half of this year. As royalty payments related to patents and overseas brand trademarks and franchise rights rose, the industrial property deficit expanded from $1.28 billion to $1.75 billion. The copyright deficit also surged from $90 million to $600 million due to growing demand for foreign games, OTT, AI apps, and online subscription services.
The professional and business services deficit (-$4.48 billion) expanded by $450 million, led by R&D (-$3.09 billion). Park Seong-gon, Head of Team of the Bank of Korea's balance of payments team, said, "(The deficits in industrial property and professional and business services) are in some respects unavoidable in terms of production and investment expansion by Korea's corporations and securing competitiveness as manufacturing conditions improve."
In contrast, information and communications services posted a surplus of $1.96 billion in the first half of this year. Compared with $1.28 billion in the second half of last year, the surplus expanded by $680 million. It was the largest half-year surplus on record. The Bank of Korea said the biggest driver was increased receipts for preinstalling foreign apps on smartphones produced in Korea.
The cultural and leisure services surplus came to $440 million, the same as in the second half of last year. On the back of the popularity of K-pop and other K-content, the surplus related to performances and exhibitions rose from $180 million to $200 million.
By region, there was a surplus in Asia (+$3.57 billion), while North America (-$3.77 billion) and Europe (-$2.18 billion) posted deficits. By institutional type, midsize corporations (+$930 million) recorded a surplus, while large corporations (-$3.75 billion) and digital intermediary platforms (-$2.2 billion) posted deficits.
Head of Team Park explained, "In Asia, including China and Southeast Asia, we recorded a surplus thanks to strong exports of games and patent vouchers, but in North America, our corporations rely heavily on original technologies, so intellectual property payments are larger, leading to a deficit," adding, "The structure of surpluses in Asia and deficits in North America continues."