Robots improve the quality of life by promoting enhancement of industrial productivity and increasing convenience of life for the socially disadvantaged including the disabled, in response to changing population structure caused by low birth rates and population aging. The role of robots has been increasing as a main player in the non-face-to-face economy driven by the COVID-19 pandemic. Korea’s big corporations including Samsung Electronics, LG Electronics, and Hyundai Motors used to sit on the fence in the past. However, they are making intensive investments in recognition of robots as a new growth engine. The Korean government also has implemented policies to foster the robotics industry, devising three basic plans for intelligent robots (in 2009, 2014, 2019) since the enactment of the ‘Intelligent Robots Development and Distribution Promotion Act’ in 2008.
Korea ranks 1st in robot density
The Korean robotics industry has been growing at an annual average rate of 5.4 percent, recording KRW 5.5 trillion sales as of 2020. Driven by the rapid growth of robots for services, the total market grew 2.6 percent year-on-year. When it comes to robot density, the number of operational robots per 10,000 employees, Korea was ranked 1st (932 units) in 2020. By sales volume, Korea was ranked 4th in the global manufacturing robot market. This is attributable to the fact that manufacturing robots are concentrated on specific areas such as automobiles, semiconductors and electronic industries in Korea. Manufacturing robots recorded KRW 2.9 trillion sales, 2.7 percent dip from a year earlier due to contraction of new investment from major demand industries which were hit by the prolonged COVID-19 pandemic.
In Korea, the share of manufacturing robots in the total robot market has continued to decline to 77 percent from 82.2 percent in 2019, 83.7 percent in 2018. However, this is still a notably high proportion, in comparison to the 56.5 percent of the global robot market. Of 558 companies, five companies have recorded more than KRW 100 billion in sales revenue, while 514 SMEs (92.1 percent of total) with less than KRW 10 billion.
In 2020, service robots recorded KRW 0.8 trillion in sales revenue, 34.9 percent up from the previous year, driven by increased sales of cleaning robots to reduce household chores and expanding commercialization of high-performing and expensive surgery robots. Of 458 companies, two companies recorded more than KRW 50 billion in sales revenue (LG, Samsung), while 437 SMEs (95.4 percent of total) recorded less than KRW 5 billion. In 2020, the export amount of robots was KRW 1.1 trillion, 5.2 percent up from a year earlier, driven by the export expansion of semiconductor manufacturing robots. The import amounts recorded KRW 0.5 trillion, 11.6 percent down from a year earlier, due to reduced imports of parts. In 2020, the number of companies was 2,427, down 8.6 percent from a year ago, growing 5 percent at an annual average rate over the past six years.
Sales Trends of Korea’s Robotics Market
Unit: KRW 100 million, %
Sales Trends of Korea’s Robotics Market
※ Source: 2020 Korea Robot Industry Survey Report (MOTIE, Korea Institute for Robot Industry Advancement (KIRIA), Korea Association of Robot Industry (KAR) / Dec. 2021)
Korea’s Large Corporations Make Investments in Recognition of Robots as Next-Generation Growth Engine
Samsung Electronics launched a robot business team in mid-December 2021, announcing its entry to the robot market in earnest. LG Electronics also launched its robot business, acquiring Robostar, and making equity investment in robot companies such as Robotis, Angel Robotics, expanding its robot business scope. Hyundai Motors also dived into the robot business, acquiring 80 percent of Boston Dynamics, a global robot company, at KRW 1 trillion. Boston Dynamics, based on quadruped robot, humanoid robot, and logistics robot, intends to create a synergy effect with Hyundai’s existing technologies including wearable robots, autonomous driving vehicles, Urban Air Mobility (UAM), and smart factory. In addition, wireless communication providers such as KT, SK, and LG Uplus, are accelerating entry to the robot business, in consideration that convergence with AI, big data, and cloud capabilities can put them in the driver’s seat in the future service robot market.
Korean Government Lays the Foundation to Support Robotics Industry after Enactment of Robot Act
The Korean government enacted the ‘Intelligent Robots Development and Distribution Promotion Act’ in 2008 to lay the foundation to support the robotics industry in a consistent and systematic way. Based on the Act, it formulated the 1st and the 2nd Basic Plans, establishing the Korea Institute for Robot Industry Advancement (2010), intensified support for the robotics industry since 2011 by identifying robot-related businesses. After the end of the 2nd Basic Plan (2014-2018), it has formulated and carried out the 3rd Intelligent Robot Basic Plan (2019-2023).
To swiftly improve the technological capability of the robotics industry, the government has invested more than KRW 600 billion in R&D of robotics technology over 10 years, built seven bases for the purposes of testing, verification, demonstration, and enterprise support for developed robots, and introduced a regulatory sandbox by revising the Industrial Convergence Promotion Act. Seven base centers include the Robot Certification Center (Daegu), Safety Robot·Underwater Robot Complex Center (Gyeongbuk), Manufacturing Robot Technology Center (Gyeongnam), Marine Robot Center (Busan), Healthcare Robot Center (Gwangju), Robot Industrialization Support Center (Daejeon), and Convergence Parts Center (Bucheon).
Strengthen Support to Facilitate the Transition of All Industries to be Robot-Based
The Korean government plans to encourage transition to smart manufacturing by further developing models of robot utilization in the aerospace, shipbuilding, and chemicals areas, which have great effects in the upstream and downstream industries, while expanding the application of existing models. It plans to discover new business models customized to demands from contactless and non-face-to-face areas such as serving, cooking and education, while increasing support for development of robot service models to address consumers’ problems. In addition, it will induce further demand for a wide-range of robots by developing and supporting private-sector focused financial support models such as robot specialized insurance, lease, and rental. It also intends to push for large-scale demonstration of robot convergence services focused on facilities close to people’s everyday lives so that people can experience them at first hand, while contributing to resolve social problems such as the aging population and low birth rates. It will also enhance the deployment of robots customized to daily life, including pet robots for emotional interaction and home healthcare robots, designed to enhance the convenience of one-person household. By implementing the Regulatory Innovation Roadmap seamlessly, the government plans to continue to preemptively improve regulations and create business environment favorable to new products, and establish the demonstration infrastructure and technology support systems to promote the commercialization of high value-added robot products converged with the state-of-the-art technologies including 5G, AI, and big data.
By ManTae Jeong, Senior Research Fellow (email@example.com)
Korea Institute for Industrial Economics & Trade
<The opinions expressed in this article are the author’s own and do not reflect the views of KOTRA.>