The Federation of Korean Industries said Friday that the rising Korean biopharmaceutical industry will be unable to sustain growth without bringing in big pharma companies from abroad through tax breaks and customized infrastructure.

Choo Kwang-ho, a senior official at FKI, said through a statement that it was important to attract foreign pharmaceutical companies now, when “global pharmaceutical companies are actively expanding into other countries.” 

He also said, “Bringing in these companies will create a snowball effect that will attract additional companies, and eventually lead to the entry of core research and development centers.”

The FKI said that it submitted a policy proposal to the Ministry of Strategy and Finance outlining potential strategies for attracting large pharmaceutical companies to the Korean market.

Setting Singapore and Ireland as benchmarks, the proposal includes three main points: to create a national bio-cluster; to provide tax incentives like those in Singapore; and to create a system for producing biopharmaceutical experts.

Unlike Singapore and Ireland, Korea does not have a set area that can be promoted as a pharmaceutical cluster with infrastructure for incoming companies. Corporate taxes are also significantly higher in Korea than in the two benchmark nations, where governments have actively lowered tax burdens to bring in investments.

FKI also noted the importance of implementing a system focusing on producing specialists in the biopharmaceutical sector.

A 2015 study conducted by the Korea Biotechnology Industry Organization found that a third of surveyed biopharmaceutical firms were having trouble finding employees equipped with technical and practical experience.

By Won Ho-jung (hjwon@heraldcorp.com)