{"id":2206425,"date":"2024-09-09T18:55:51","date_gmt":"2024-09-09T09:55:51","guid":{"rendered":"https:\/\/koreapro.org\/?p=2206425"},"modified":"2024-09-10T16:36:03","modified_gmt":"2024-09-10T07:36:03","slug":"south-koreas-patent-sharing-program-gives-smes-a-boost-but-big-firms-loom-large","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2024\/09\/south-koreas-patent-sharing-program-gives-smes-a-boost-but-big-firms-loom-large\/","title":{"rendered":"South Korea\u2019s patent sharing program gives SMEs a boost but big firms loom large"},"content":{"rendered":"

South Korea <\/span>announced<\/span><\/a> the release of 490 energy-related patents through its annual patent-sharing program on Monday, aiming to bolster the technological capabilities of small and medium-sized enterprises (SMEs) by offering them free access to unused patents held by public energy enterprises.<\/span><\/p>\n

While this initiative offers significant opportunities for South Korean SMEs, they will likely continue to face considerable challenges in integrating these technologies and competing with larger firms.\u00a0<\/span><\/p>\n

PATENT SHARING PROGRAM OVERVIEW<\/b><\/p>\n

The patent-sharing program, launched in 2013, was designed to enhance SMEs\u2019 competitiveness by giving them free access to dormant technologies owned by large corporations and public institutions.<\/span><\/p>\n

This year, 11 public energy firms have made 490 patents available, covering a range of technologies related to liquefied natural gas (LNG) systems, hydrogen energy and environmental, social and governance (ESG) compliance.<\/span><\/p>\n

While not cutting-edge technology, SMEs will likely find them helpful in improving efficiency, safety and regulatory compliance. For instance, the LNG charging system, which relies on <\/span>pressure differentials<\/span><\/a> instead of pumps, could reduce energy consumption and operational costs. This is particularly appealing to SMEs working with tight margins.<\/span><\/p>\n

Other patents, such as a safety device for replacing overloaded switches \u2014 a type of circuit breaker \u2014 can prevent accidents in power distribution.<\/span><\/p>\n

Additionally, SMEs can use hydrogen membrane technology to improve the efficiency of hydrogen production, particularly through the process of water electrolysis.<\/span><\/p>\n

The program\u2019s emphasis on proven and tested technologies offers SMEs an advantage in sectors where efficiency and safety are crucial. However, SMEs will likely continue to face substantial technological integration challenges.<\/span><\/p>\n

\"\"

An illustrated concept of technology integration | Image: Korea Pro<\/em><\/p><\/div>\n

OPPORTUNITIES FOR SMES<\/b><\/p>\n

The most immediate advantage of the patent-sharing program lies in its cost-saving potential. Research and development (R&D) expenses represent a substantial cost for SMEs, which often lack the capital to develop proprietary technologies.<\/span><\/p>\n

The South Korean government mitigates this burden by covering up to 80% of R&D costs for SMEs through various funding programs, such as the <\/span>Startup Growth Technology Development program<\/span><\/a>. These initiatives allow smaller businesses to focus on commercialization rather than upfront development costs.<\/span><\/p>\n

By providing free access, the patent-sharing program allows SMEs to bypass this costly process further.\u00a0<\/span><\/p>\n

Further, businesses that adopt these technologies will likely be able to better adhere to ESG regulations, which are becoming increasingly <\/span>stringent globally<\/span><\/a>. This is especially critical for SMEs looking to attract investment or secure contracts in markets where ESG performance is now a key competitive factor.<\/span><\/p>\n

RISKS FOR SMES<\/b><\/p>\n

However, small businesses with limited technical expertise or financial resources will likely find it challenging to implement these technologies. SMEs will still require specialized knowledge and infrastructure to effectively integrate the patents made available in their production lines.<\/span><\/p>\n

While the technologies may offer long-term cost benefits, initial prerequisite infrastructure upgrades will likely still be substantial. Businesses will also have to invest in skilled labor \u2014 another rising cost factor.<\/span><\/p>\n

Companies with limited access to technical expertise or resources may find it difficult to fully implement the technologies, leading to inefficiencies or missed opportunities.<\/span><\/p>\n

Additionally, if the integration process is mismanaged, companies risk losing more than just financial investment. Failed integration could result in operational delays, setbacks, or industrial accidents, which would be particularly <\/span>damaging<\/span><\/a> for energy firms.<\/span><\/p>\n

SMEs will also continue to face competitive pressure from larger companies, many of which provided the free patents. Larger corporations can also access the patents and, due to their scale, rapidly integrate and commercialize the technologies.<\/span><\/p>\n

This puts SMEs at a disadvantage, as larger firms can leverage their existing infrastructure and technical expertise to bring products to market more quickly and efficiently.<\/span><\/p>\n

This competitive imbalance may be particularly problematic in the hydrogen and renewable energy sectors, where larger players already dominate. SMEs, while benefiting from free technology, may find themselves struggling to differentiate their products and services in a market where bigger companies can adopt and refine the same patents with greater ease.<\/span><\/p>\n

\"\"

An illustrated concept of a small business competing with a large business | Image: Korea Pro<\/em><\/p><\/div>\n

LOOKING AHEAD<\/b><\/p>\n

SMEs will likely pursue further collaboration with each other to pool their resources and technical expertise to better integrate the technologies. This would allow them to share the burden of infrastructure upgrades and training, making it easier to implement the patents and stay competitive.<\/span><\/p>\n

However, those SMEs that are successful in adopting these technologies will likely become acquisition targets for larger firms. Given the increasing importance of green technologies, particularly in the hydrogen and ESG sectors, larger companies may look to absorb smaller, innovative firms that have successfully integrated these patents.<\/span><\/p>\n

While this could provide an exit strategy for some SMEs and their shareholders, it risks the continued concentration of technology and capital among South Korea\u2019s conglomerate companies.<\/span><\/p>\n

Further, while the patent-sharing program could accelerate the adoption of greener, more efficient technologies, its broader impact will depend on how well SMEs can capitalize on these technologies.<\/span><\/p>\n

If smaller firms can overcome the technological and resource barriers, they stand to gain a foothold in key emerging markets. Otherwise, the program could inadvertently reinforce the dominance of larger corporations in South Korea\u2019s energy sector.<\/span><\/p>\n

Edited by Alannah Hill<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Technology & Cyber<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

South Korea announced the release of 490 energy-related patents through its annual patent-sharing program on Monday, aiming to bolster the technological capabilities of small and medium-sized enterprises (SMEs) by offering them free access to unused patents held by public energy enterprises. 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