Healthcare industry has been perceived as the future industry which will bring the employment and economic wealth. This initiated the Korean government to start R&D subsidy in 1995 and to establish KHIDI. Furthermore, pharmaceutical industry supporting law enacted in 2011 and 5 years plan for the development of pharmaceutical industry was set up in 2013.

The fundamental question for the development of health industry is if it would be possible to leapfrog by late runners to catch up the advanced countries. Korea has excelled in electronic devices and mobile phones industry but it was not the case for pharmaceutical industry. Alfred Chandler(2005) noted that this was in fact because of entry barriers that is very much higher than other industry.

This report investigates the industrial policies in health industry which allows the technological innovations. In particular, we focus on the research and development subsidy policy, pharmaceutical pricing policy, collaboration and bio-cluster policy and globalization of healthcare service industry. We expect the policy propositions in this report would contribute to the development of policies in this sector.