Biotech and healthcare companies operating in the new technology industry face limitations in investing and raising funds to increase corporate value due to their small size, burdened with “initial investment costs” and “lack of specialized manpower.”

Therefore, the government should provide institutional support tailored to the environmental characteristics of these biohealth companies, a state agency pointed out.

The Korea Healthcare Industry Development Institute (KHIDI) highlighted these issues and more in its report, “Trends in the Utilization of New Technologies in the Biohealth Sector - Focusing on Companies and Research Institutions Performing Government R&D Projects.” Han Seung-cheol, a researcher at the institute’s industrial statistics team, wrote the report.

The report defined “new technologies in the biohealth sector” as those utilized frequently through the convergence of biohealth, IT, and ICT in the era of high-tech development called the Fourth Industrial Revolution.

The KHIDI has been conducted a biohealth new technology survey annually since 2018 to identify the status of utilizing new technologies in the biohealth field. The latest report is based on a survey of companies utilizing new technologies in the biohealth field in 2021 and 2022.

Of the 1,005 companies surveyed in 2022, 718 (71.4 percent) were related to the biohealth industry (pharmaceuticals, medical devices, cosmetics, and medical services), more than half of all respondents, while 287 (28.6 percent) were related to other industries, such as software and computer programming.

In 2022, big data (35.3 percent), artificial intelligence (18.2 percent), genetic (15.7 percent), nano (14.4 percent), and Internet of Things (9.1 percent) technologies were used in the biohealth sector. In terms of year-on-year changes in use, big data increased the most (from 22.0 percent to 35.3 percent).

Besides, the medical device industry (49.1 percent), medical service industry (28.4 percent), and pharmaceutical industry (10.7 percent) were utilizing new technologies in the biohealth sector.

By industry, robotics (80.5 percent), genetics (57.4 percent), and cloud (52.8 percent) technologies were utilized more than others in medical equipment and medical service sectors.

Among the surveyed companies, those in the pharmaceutical, medical device, and medical service industries reported the greatest difficulty developing and utilizing new technologies in the biohealth sector. The biggest reason was investment cost, followed by the lack of specialized personnel.

The report classified companies utilizing new technologies in the biohealth sector into four stages of growth: start-up stage, nursery growth stage, independent growth stage, and maturity stage. As a result, nearly six out of every 10 companies (57.6 percent) were in the growth nursery stage, followed by independent growth stage (20.6 percent), start-up stage (15.8 percent, and maturity stage (6.0 percent).

It also categorized firms into four types according to the level of technological innovation – simple-production type, technology-reacting type, technology-chasing type, and technology-leading type. The technology-reacting type, which is highly interested in technological change, was most common by accounting for 34.6 percent, followed by the technology-leading type at 33.1 percent, the technology-chasing type at 24.1 percent, and the simple-production type at 8.2 percent.

The pharmaceutical industry has the largest proportion (31.5 percent) of companies in the technology-leading and growth-nursery stages, and the smallest proportion (0.9 percent) of companies were in the simple production and start-up stages.

The medical device industry marked the largest proportion of companies (20.0 percent) in the technology-leader and growth-nursery stages while showing the smallest proportion (0.8 percent) in the technology-reacting, simple-production, and mature stages.

The healthcare industry has the largest proportion (20.6 percent) of companies in technology's reactive and growth nursery stages.

These show that most companies utilizing new technologies in the biohealth sector are in the early stages of growth, and that there are differences in technology maturity by industry, the report said.

"Companies entering the new technology industry in the biohealth sector are limited in their ability to invest and raise funds to increase their corporate value due to their small size," Han said. "The government needs to provide support tailored to the characteristics of each industry, including deregulation and promotion of technology commercialization."

Among the difficulties of companies utilizing new technologies in the biohealth sector was the "lack of specialized manpower," which received a high percentage of responses and "burden of initial investment costs." According to the report, the two factors were prominent among all groups of companies regardless of company size, growth stage, or stage of technological innovation.

"The convergence of technologies, such as data-driven development of new drugs and medical services for patients and personalized healthcare services, is accelerating the entry of companies from other industries into the biohealth market," Han said. "This change in industry structure will also affect the skills required in the workplace."

As companies utilizing new technologies in the biohealth sector are small in size and do not have their workforce development programs, he added that a talent development policy is necessary to consider environmental characteristics.