An Assessment of the Economic Life of Research Equipment: Korean Case

Recently, as scientific technologies have been modernized and upgraded, medium and large-sized research equipment have been regarded as a prerequisite condition for the maximization of the outcomes of R&D. The governments of many countries also perceived the importance of research equipment as such and have been making massive investments for research equipment. Given the importance of research equipment, efforts for efficient management of research equipment is required. In particular, the problem of replacing old research equipment has become important because the costs for repairs or maintenances are increased as R&D equipment becomes obsolete. The purpose of this paper is to assess the economic life of R&D equipment empirically using the data gathered from public R&D institutes in Korea which own and operate mid and large-scale research facilities. We developed a systematic model to apply the traditional engineering economic concept in assessing the economic service life of research facility owned by research institutes in Korea. Using this model, we estimated the economic service life of research equipment according to the category of facilities with respect to several economic dimensions. Finally, we suggested a policy scheme for efficient replacement of research facilities based on our estimation results.