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 rose, while subscriptions by the public to overseas apps such as Netflix and ChatGPT (conversational artificial intelligence) also grew.
According to the "2025 knowledge services trade statistics" released by the Bank of Korea on the 19th, last year's knowledge services deficit expanded by $2.88 billion from a year earlier to $10.25 billion. The shortfall is the largest since 2013, when it was $10.81 billion.
The knowledge services trade statistics cover four major knowledge service categories within the services sector: ◇ intellectual property royalties ◇ information and communications services ◇ culture and leisure services ◇ professional and business services. They mainly include promising services produced on the basis of knowledge and information with strong growth potential.
By item, the deficit in professional and business services was the largest at $9.39 billion. By subcategory, research and development posted a deficit of $6.12 billion, and professional and management accounted for $3.65 billion. The research and development shortfall widened as Korea manufacturers increased outsourcing of research to overseas companies, and the professional and management deficit expanded 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, totaling $7.03 billion, up $2.92 billion from a year earlier. Of this, the computer and mobile software deficit was $4.2 billion, and industrial property rights posted a $3.3 billion deficit. The computer and mobile software deficit grew 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 widened as Korea corporations paid more royalties to overseas companies.
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 the increase in fees received for loading foreign apps onto 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.