A Study of Business Transition Directions Based on Patent Data: Focusing on the Display and Automotive Industries

When firms anticipate a major change in the business environment or some kind of crisis, they often pursue some kind of business transition in an effort to overcome the challenge and discover new growth momentum. Rapid changes to the industrial environment such as COVID-19, carbon neutrality, and the digital transformation have made business transformation increasingly urgent. However, Korean small medium-sized enterprises (SMEs) have not adequately prepared to meet this challenge. According to a survey by the Korea SMEs and Startups Agency (KOSME), 85.4 percent of SMEs reported that management felt a need to change the structure of the business. Yet only 26.9 percent of firms were found to be making active preparations to do so.The industrial environment of the display and automobile industries in particular is undergoing a rapid change. Display industry manufacturers are switching to organic light-emitting diode (OLED) displays as the competitiveness of liquid-crystal displays (LCD) declines due to increased competition from China, and the automobile industry is rapidly shifting from internal combustion engine (ICE) vehicles to electric vehicles (EVs) due to the promotion of carbon neutrality policies. Domestically, both industries possess world-class technologies thanks to long-term R&D and investment, but they are in danger of losing demand for these technologies due to changes in the industrial environment.It is against backdrop which this study is set. In it, we examine the direction of business transformation based on technological capacity through an analysis of patent data. The dataset in question consists of information on SMEs’ patents in the display and automotive industries.