Although Korea possesses excellent infrastructure for collecting and linking bio data, it has failed to make proper use of that data, and as a result the biohealth industry has not taken off as a new growth engine, according to an assessment. As individuals, the data subjects, show low willingness to provide bio data due to concerns about leakage, there are calls for national-level measures to increase data utilization.

According to a report released by the Bank of Korea on the 9th, titled ‘Plan to Foster the Advanced Biohealth Industry’, the domestic biohealth industry trails leading countries in innovative new drugs and advanced medical devices. No Korean company ranks within the global top 30 by sales, and even Samsung Biologics, the top domestic pharmaceutical company, records sales of $2.8 billion, only about 5% of the average sales of the top three global pharmaceutical firms.

The BOK explained that a shortage of foundational technologies is the fundamental reason for the gap. In the quantitative indicator of source technologies, measured by the number of biohealth patent applications in the United States, Korea filed 4,800 applications from 2016 to 2023, ranking ninth worldwide. This is lower than Switzerland, which has a much smaller population, and even lower than latecomer China.

However, the BOK assessed that as artificial intelligence (AI) technology emerges as a ‘game changer’ for the biohealth industry, an opportunity has opened for Korea, which has excellent infrastructure for collecting and linking bio data. The BOK stated, “Health insurance and hospital clinical data on 50 million people, collected on the basis of a single health insurance system, is a national strategic asset with exceptionally high global scarcity, to the extent that it is called the ‘diamond of the AI era’,” and added, “In addition, both the number of AI patents filed in the United States and the number of AI medical devices approved by the US Food and Drug Administration (FDA) rank fourth in the world, indicating that Korea has secured AI technological capabilities at a global level.”

The BOK pointed out that the problem lies in the low utilization of bio data, which forms the basis for catching up with leading countries. Despite having excellent collection and linkage infrastructure, bottlenecks persist at utilization stages such as cleaning and sharing.

The BOK explained that low utilization reflects an ‘incentive mismatch’: the risks and costs of data use are borne by data subjects (individuals) and collectors or administrators (hospitals), while the benefits are dispersed to users (companies and researchers) and to society as a whole.

Individuals agree with the public-interest value of using data but hesitate to provide it due to concerns about leakage and misuse. In a survey, only 26.9% responded that they were willing to provide data. The BOK said, “Once data is shared, it moves beyond the scope of personal control, and data subjects are placed in a situation of information asymmetry, making it difficult to know when, to whom, and for what purpose their data is used.”

For collectors or administrators, the burden from the costs of data cleaning and potential legal liability in the event of a leak is heavy, yet compensation is minimal, leading them to avoid sharing data. According to the 2020 Healthcare Informatization Survey, only 21% of hospitals shared data externally for research purposes.

As a way to activate data utilization, the BOK proposed a ‘state approval-based bio data opening framework’. Under this framework, data use would be approved only for research that passes prior review and meets the public-interest requirements stipulated by law, while easing regulations for approved research, such as exempting prior consent.

Seong-won, head of the Micro-Institutional Research Division at the BOK Economic Research Institute, said, “The state approval system is expected to provide a new growth engine for the Korean economy, which is in a phase of low growth, by turning bio data into a strategic asset.”