KDI series in Economic Policy and Development
Edited by Sanghoon Ahn, Bronwyn H. Hall and Keun Lee
Chapter 12: The effectiveness of patents and the determinants of patenting activities in Korea
As patenting activity worldwide increases, the propensity of Korean firms to seek patents since the late 1980s has propelled Korea into the top four globally. Understanding this phenomenon is crucial in an objective analysis of the characteristics of Korean innovation and changes seen in recent decades, as well as providing insights into the changing environments that lead to effective technological innovation. Korea is famous for its degree of concentration of patenting. Large IT corporations such as Samsung Electronics and LG Electronics, among others, have been aggressive in their patent applications and registrations, and hold the majority of patents in Korea. At the same time, however, there were about 8,500 Korean firms involved in patenting in 2005, according to a survey by the Korean Institute of Intellectual Property. This dramatic increase in patenting in Korea is directly correlated to an increase in the number of firms involved in patenting. There may be multiple reasons for the increasing connection between innovation and patents, such as an increase in the sheer number of innovation activities and the enhancement of patents as an appropriation mechanism. Among these reasons, it is traditional to approach the issue in terms of the effectiveness of patents as an appropriation mechanism for innovation output. This approach can elucidate the meaning of patenting activities with relation to other appropriation mechanisms in non-advanced countries.