Invest KOREA

As biotechnology carries more significance than ever before, countries all around the world designate biotechnology as their future growth engine and rush to join an intense global competition to dominate the state-of-the art bio-healthcare industry. Korea is no exception. The country is showing a rapid growth in biotechnology thanks to continuous support in R&D from the public sector and innovation carried out by the private sector.

The Biotechnology Classification Code set by the Korean Agency for Technology and Standards (KATS)¹⁾estimated the biotech industry’s 2021 production amount at about KRW 21 trillion²⁾. Compared to numbers in 2016, below KRW 10 trillion, there has been an average annual increase of 17.8% over the last 5 years. The biopharmaceutical industry, which accounts for the lion’s share of the biotech industry, showed average annual increase rates in production amount and export value at 11.7% and 14.8%, respectively, during the same period. In particular, Korea’s growth potential in biopharmaceuticals has already been proven by its outstanding performance in public health during the Covid-19 pandemic with the government’s swift response to the pandemic, excellent virus test-kits, and world-class capabilities to manufacture vaccines and therapeutics.³⁾

Korea’s biotechnology industry, already equipped with highly competitive manufacturing abilities, can utilize this moment as a window of opportunity to make a great leap given both internal and external factors we face now. Internally, Korea’s biopharmaceutical industry base has recently been enlarged thanks to domestic pharmaceutical and biotech companies increasing R&D and capital investments to develop high-value-added advanced biological products. Externally, a growing number of biological medical products, touted as blockbuster drugs, will have their patents expired soon. In addition, major economies, such as the US and the EU are encouraging the use of biosimilar products⁴⁾to reduce the burden of healthcare costs.

The Korean government announced a strategy that comprises five key tasks in February 2023 to create new bio-health markets under the goals of ‘Creation of New Digital Markets’ and ‘Vitalization of Bio-health Export’. With the strategy, it aims to respond to the current paradigm shift in medicine which is pivoting to comprehensive patient-centric healthcare services that cover medicine and healthcare, while keeping up with progress in digital technology and technology convergence.

As a follow-up measure of the ‘Strategy to Create New Bio-Health Markets’, the government announced the Comprehensive Plan to Promote the Biopharma Industry which contains four supportive strategies and 10 major tasks in March in an attempt to make Korea the 6th largest pharmaceutical and biotech powerhouse in the world.

Along with the growing biopharma market worldwide, the demand of materials, parts, and equipment in biotechnology required from domestic Contract Development & Manufacturing Organization (CDMO) and Contract Manufacturing Organization (CMO) has been on a steep rise. Meanwhile, the government is providing various incentives to attract foreign investment to establish Korea as a global vaccine hub. To take advantage of these favorable circumstances, leading global companies of bio-based raw and subsidiary materials are actively engaging in negotiations to sign an MOU on direct investment in building plants, biological clean rooms (BCRs), manufacturing facilities, and training centers in Korea.