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During the 1970s and 1980s South Korean brands were synonymous with downmarket. Lucky Goldstar (today’s LG), for instance, was patronised by blue collar workers. Hyundais was driven by people who couldn’t afford Japanese cars.
And then during the 2000s a new generation of South Korean products came along that were finally able to compete with Made in Japan. Samsung television sets and mobile phones set new standards in performance. LG no longer was the poor man’s Sony. Initially, industry observers believed the spike in quality was the result of Korean boffins working 48 hours a day. In reality it was red hot Russian technology at work.
“Russian scientists are known to constitute the core group of research efforts of LG and Samsung,” says Georgy Toloraya, a former Russian diplomat and member of the Russian Academy of Sciences, in a report titled ‘Russian Experience in Information Technology Cooperation with Two Koreas: Lessons and Prospects’. Since many contracts contain a confidentiality clause, these scientists are prohibited to disclose the nature of their work. Therefore, no data is available on the exact portion of IT-related research, but one can guess it is quite significant.
“Examples of Russian achievements abound in the lineup of popular Korean products,” writes Businessweek's Seoul bureau chief Moon Ihlwan. “Russian brains helped Samsung develop the image-processing chips in its digital TVs and refine its frequency-filtering technology that significantly reduced noise on its now-ubiquitous handsets. Russian scientists from Moscow State University also helped develop LG’s efficient cooling pipes that bolster its air conditioners, while the technology that was once used to cool Soviet tanks was applied for a multi-compartment appliance that chills, ferments, and stores kimchi, the spicy, pickled cabbage served on virtually every Korean dining table.”
The Koreans got lucky when the Soviet Union was dissolved in 1991 and many Russian scientists and engineers found themselves out of work or staring at joblessness. “At the time there was no shortage of access to Russia’s underemployed educated class because of economic difficulties in their nation,” Ihlwan adds. “Many Russian engineers worked in Korea for years at labs run by companies and the government to help iron out problems in the course of rolling out leading-edge products.”
With the Russian economy rebounding in the 2000s as a result of President Vladimir Putin’s economic policies, many Russian scientists returned home. But a precedent was set for the continued technical cooperation between Russia and Korea.
In ‘The Making of Northeast Asia’, Kent Calder and Min Ye write that the “Korean business world has been broadly and consistently supportive of its government's regional initiatives, especially those with Russia”. As early as the mid-1970s, soon after the first Oil Shock, Korean companies, led by Hyundai, were investigating oil and natural-gas prospects in central Siberia, more than 4000 km north of Seoul.
Toloraya elaborates: “Russia has a world-renowned potential in the development of new computer software and hardware, communication equipment, new materials for electronic industry, neurocomputers, crystallography and lasers. It is this potential that attracted the attention of Korean research centres and IT-related companies....”
“Available data indicate that every one in four joint research projects between Russian and Korean companies may be considered IT-related. This is quite significant, taking into account the fact that the level of development of IT in Korea is believed to be about 75 percent of the level of developed countries. The Russian-Korean projects in IT are centred mostly on basic research in the most advanced areas of IT, the results of which constitute the foundation for next-generation Korean IT products and services. Korean industry is well equipped to commercialize the discoveries and outputs of Russian basic science s and their achievements in the development of technology know-how to the benefit of both countries.”
What’s unique about the Russian-Korean partnership is that it is not only about Russian scientists providing their services and passing on their knowledge and expertise to Korean companies. South Korea has financed the creation of R&D centres modelled on pure-science Russian institutions such as the Kurchatov Nuclear Physics Institute, Vavilov Institute, and the Central Institute of Aviation Machinery where Koreans can learn the scientific methodology and know-how from their Russian counterparts.
The breakup of the Soviet system of R&D management – and the absence of a new one in Russia –resulted in the emergence of illegal and semi-legal technology transfer channels. South Korean government agencies and private companies used – or rather abused – that Russian predicament to their advantage, says Toloraya.
These agencies seized dominant positions in the most promising sectors and got valuable scientific information and data without due compensation to the Russian scientists or scientific institutions that were the source of these technologies. The Koreans used “direct unauthorised and unsupervised contacts with Russian research centres and many leading scientists to gain access to dual-use technologies in violation of Russian laws or to get the desirable R&D results for a fraction of the market price. In plain English, it is called industrial espionage and unfair competition.”
Toloraya adds: “Korean private companies and government agencies recruited many Russian scientists who had access to the development of military-sensitive technologies to work in the R&D sector in Korea on the basis of private contracts without prior notification or authorisation of the Russian government.”
But despite such vexed problems, Russians are still comfortable working with the Koreans. One reason could be that – unlike Germany, Japan or China – South Korea is never going to be a geopolitical rival.
The Russian government is, therefore, pushing for increased transparency in technology transfers in order to ensure mutually-advantageous scientific cooperation between the two countries. In more recent years, Russia has helped South Korea with its aerospace and defence projects. The first successful Korean rocket, launched in 2013, consisted of a Russian-built first stage and a South Korean upper stage. The 1000-acre Naro Space Centre in Goheung was built by the S.P. Korolev Rocket and Space Corporation Energia of Russia.
Calder and Ye sum up: “Russian-Korean tied appear destined to deepen substantially in the future, driven by natural complementarities between the largest energy exporter in the world, with more than a third of proven global gas reserves, and manufacturing power that is simultaneously one of the world's 10 largest energy importers.”
So the next time you look admiringly at your Samsung Galaxy device, don’t forget to acknowledge the unknown Russian scientist whose genius most likely made it possible.
