Last year, the knowledge services trade balance posted a deficit of $10.25 billion, the largest since 2013. As exports by Korea corporations increased, imports of services related to research and development (R&D) also grew, while subscriptions by the public to overseas apps such as Netflix and ChatGPT (conversational artificial intelligence) rose.
According to the "2025 knowledge services trade statistics" released by the Bank of Korea on the 19th, last year's knowledge services deficit widened by $2.88 billion from a year earlier to $10.25 billion. The deficit was the largest since 2013's $10.81 billion.
The knowledge services trade statistics cover four major knowledge service areas within services: ◇ intellectual property royalties ◇ information and communications services ◇ culture and leisure services ◇ professional and business services. They primarily include promising services produced on the basis of knowledge and information with high growth potential.
By item, the deficit in professional and business services was the largest at $9.39 billion. By subcategory, the research and development deficit was $6.12 billion, and professional and managerial accounted for $3.65 billion. The research and development gap widened as Korea manufacturers increased orders for research to overseas corporations, and the professional and managerial gap widened as overseas legal and accounting advisory services increased, centered on the electric and electronics manufacturing sector.
The next largest deficit was in intellectual property royalties, which came to $7.03 billion, up $2.92 billion from a year earlier. Of this, computer and mobile software posted a $4.2 billion deficit, and industrial property rights recorded a $3.3 billion deficit. The computer and mobile software deficit widened as the public increased purchases on global app stores, centered on over-the-top (OTT) services and Generative AI, while the industrial property rights deficit grew as Korea corporations paid more royalties to overseas corporations.
In contrast, information and communications services recorded a surplus of $5.19 billion last year, expanding from $2.87 billion a year earlier. The Bank of Korea (BOK) said the biggest factor was an increase in compensation received for loading foreign apps on smartphones produced in Korea. Culture and leisure services also posted a surplus of $980 million, similar to $1.02 billion a year earlier. While music and video exports fell from $650 million to $500 million, the surplus related to performances and exhibitions increased from $340 million to $440 million.