Blockchain companies increase R&D spending despite little in the way of sales
Among Korean blockchain companies, only about two out of ten were able to achieve any sales at all last year. Yet these blockchain companies are planning far more investment and hiring than other companies engaged in new software development. Blockchain companies are focused mainly on apps According to a report by the Ministry of Science and ICT and the Software Policy & Research Institute issued on Sept.1, 198 blockchain companies were in existence last year, accounting for 8.4 percent of all “new software” companies. By interest, 66.3 percent of these blockchain companies developed apps, while 35.5 percent specialized in platforms, 9 percent in IT services and 3.3 percent in business services. Multiple answers were allowed. Most active in financial services Blockchain was most applied was in finance, including banking, insurance, stocks and investment, with 68.1 percent of the companies involved in these areas. The second largest focus was publishing, video, broadcasting and telecommunication and information services, with a 20.5 percent share. Government and public services accounted for 11.3 percent. Manufacturing was only 9.8 percent of the total. Only one out of every five company achieved sales Among the 198 blockchain companies, only 44 companies, or 22 percent, achieved sales. The companies that achieved significant sales from blockchain technologies were those involved in new software, like virtual reality, augmented reality and mixed reality. Despite little business, R&D spending is up, as is hiring Despite little in the way of blockchain sales, companies are increasing their spending on R&D. Last year, among all R&D spending covered in the survey, blockchain R&D accounted for 35.6 percent. This year, R&D spending on blockchain technology on average is expected to account for 48.2 percent of the total in the new software universe. Hiring is also seen as strong. New software companies are planning to increase the ratio of blockchain talent to 65.4 percent of all employees. Biggest obstacle is attracting investment The biggest obstacle blockchain companies face when pushing for new business is the lack of capital and securing investments. Among survey participants, 46.3 percent said this was their biggest problem. A total of 9.5 percent complained about legislation and regulation. In other new tech field, fewer were concerned about legislative issues and rules, with 4 percent of those in AI ranking it as their No. 1 issue, 3.2 percent IoT and 3.3 percent in big data. For blockchain businesses, only 9.2 percent said finding talent was a big problem.