Tech Competition Brews Between S. Korea and Japan Includes Fuel Cells

Seoul Ocxtober 7, 2004; Seo Jee-yeon writing for the Korea Times reported that South Korea and Japan has entered into a cutthroat competition in developing next growth engines, according to a report by the LG Economic Research Institute (LGERI) on Thursday.

``As a majority of the next generation industries to be fostered by both countries overlap, competition between the two nations to jumpstart the market in those industries is expected to heat up," the report said.

Seven future growth engines announced by the Japanese government in May this year include fuel cells, information electronics, robots, contents, health & welfare equipment and service, eco-energy equipment and service and business support service.

Among them, information electronics, fuel cells, robots and contents overlap with the future growth engines of Korea.

The ten growth engine industries that the Korean government announced last year

include digital TVs and digital broadcasting, display, intelligence service robots, next-generation automobiles, next-generation semiconductors, next-generation mobile

communications, smart home networks, digital content and software solutions, next-generation batteries, and bio-chemistry and bio-artificial organs.

Korea stands ahead of Japan in some of the future industries like digital electronics and semiconductors in terms of investment size and price competitiveness.

``However, South Korean electronics firms could be overtaken by Japanese firms if they expand through a merger & acquisition and exploit their core competency to win the race to develop engines of future growth," the report pointed out.

Meanwhile, the report said Korea's technology level falls way behind that of Japan in such areas as automobile and robot fields.

``Korea needs to firm up investment in research and development in those industries where Korea is at a comparative disadvantage to fill the technology gap with Japan," the report advised.

The race between the two nations will heat up as the technology gap narrows. However, Korea has a double-pronged task to rival Japan, both timely investments in next growth engines and strengthening technologies in industries that have long been at a competitive disadvantage like parts and materials are needed, it added.