Sagong Myeong, president of the Korea Railroad Research Institute. [Korea Railroad Research Institute]
Sagong Myeong, president of the Korea Railroad Research Institute. [Korea Railroad Research Institute]

The first wall a technology hits after leaving the laboratory is not a technical one — it is the barrier of the first purchase. No matter how strong the research and development results, a technology that fails to win market acceptance rarely escapes the lab. In the railway industry, where public institutions are the primary buyers, that first purchase often determines whether a technology ever reaches commercial use.

The government's recently announced plan to reform the national procurement framework to promote innovative technologies (Aug. 28) speaks directly to this problem. The idea is for the public sector to become the "first buyer" of innovative technologies, creating an initial market. Particularly worth noting are proposals to link R&D selection with procurement commitments, apply performance-based contracts to innovative technologies that are difficult to purchase under conventional specification-driven arrangements, and establish a "procurement sandbox" where new contracting approaches can be tested.

The railway industry feels this need especially acutely. Even when a small and medium-sized enterprise develops a superior component, railway operators are reluctant to purchase a product with no field deployment record. In an industry where safety is paramount, buying an unverified product and encountering a problem can expose the responsible official to liability and audit risk. Companies, meanwhile, cannot build a delivery record without a purchase. It is a classic catch-22: you need a track record to get purchased, and you need a purchase to build a track record.

Railways are a prime example of a systems industry in which diverse innovative technologies — AI, sensors, robots, advanced materials — are validated in real operating environments. Because the pool of potential buyers is relatively well defined and field demonstration is critical, linking R&D, demonstration and public procurement produces strong policy results. Railway performance and delivery records also serve as key conditions for entering overseas markets, meaning that a domestic first purchase can give small and medium-sized enterprises the foothold they need to expand abroad.

The Korea Railroad Research Institute is pursuing a commercialization model that connects operator demand, small and medium-sized enterprise support R&D and a public-institution performance-sharing scheme to lower the first-purchase barrier. Under this model, a railway operator identifies a technology it needs and agrees on performance targets and purchase conditions with a company through a performance-sharing agreement; the institute then supports technology development and verification through joint R&D. Products that meet the performance targets are subsequently purchased under the performance-sharing scheme.

One example is the domestic development of cooling ventilation fan motors for key electric multiple unit systems, carried out in partnership with Incheon Transit Corp. The domestically developed product — built around operator demand — led to field deployment and an actual purchase, and is now progressively replacing the foreign-made components it was designed to substitute. The same commercialization model is currently being applied to the domestic development of conical axle-box rubber springs, the shock-absorbing components used in rolling stock on Incheon Urban Railway Line 2. The institute, a small and medium-sized enterprise and Incheon Transit Corp. are jointly conducting technology development and on-vehicle testing, with plans to channel a successful outcome into follow-on purchases through the performance-sharing scheme. From the outset, the project was designed around two questions: who will use this, and how will success translate into a purchase?

For such efforts to move beyond individual projects, institutional support is essential. First, as follow-up discussions on the government's national procurement reform plan proceed, there is a strong case for actively considering an expansion of development-procurement linked contracts beyond national strategic technologies to fields such as railways, where public demand is clear and field demonstration is critical. Second, procurement procedures and proactive-administration liability exemption standards should be clarified so that operators can confidently adopt verified domestic innovations, and participation in performance-sharing schemes and records of purchasing innovative products should be reflected in institutional performance evaluations.

Ultimately, the first purchase is not simply a matter of buying one newly developed product. It is about giving superior technologies a chance to enter the field and giving companies a platform from which to reach new markets. Connecting demand identification, R&D, demonstration, first purchase and market diffusion into a single chain — that is how railway R&D crosses its last mile and turns technological innovation into industrial transformation.


nbgkoo@heraldcorp.com