In the past, POSCO Group's research and development division had been organized based on industry-university-research cooperation. POSCO's basic research was handled by Pohang University of Science and Technology (POSTEC), industrial research taken care of by Research Institute of Industrial Science and Technology (RIST), and onsite research by subsidiary-specific technical research laboratories.

Lack of intensive research due to RIST's focus on broader scope had prompted POSCO in 1994 to transform the RIST-affiliated economy and business management research institute into POSCO Research Institute (POSRI), and to separate the more site-specific research functions from the steel-making division. Along with such development, POSCO has also established the POSCO Technical Research Laboratory (POSLAB) on Dec 1, 1994.

However, as the business side of these research laboratories became more diversified and further divided, it was becoming more and more difficult to maintain efficient operation of the different laboratories. In the steel-making division, RIST and POSLAB both had technical research laboratories, which meant their works overlapped, and that in turn reduced the labs' efficiency. The company had difficulties with seizing the right business opportunities at the opportune time as a result of relying on the affiliated laboratories for developing structural steel technologies and steel plant engineering technologies. Moreover, having a system of diversified research and development at the affiliate-level has at times deterred the company from making strategic and swift decisions.

In our effort to resolve these issues, POSCO has conducted the R&D BPR since Feb of 2005 to strengthen the liaisons between the technical strategies and research and development efforts, and to develop specializations within the research and development division, in addition to implementing a network of R&D at pan-POSCO-level. Based on the outcome, POSCO has focused on the research capacities of both structural steel technology and steel plant engineering to create new demands in areas, such as steel construction and steel house, which previously had been dispersed in each affiliated company, such as POSCO E&C, POSCON, and POSCO Refractories & Environment Co., Ltd. (POSREC). Also, as a part of our concerted efforts, we have established a research system in which the company consistently handles the engineering tasks other than the existing R&D functions.

In other words, RIST has now assumed the task of researching the application technology for steel materials as well as the research on future technologies, not limited to the next-generation innovative steel technologies, automobiles, automation, the environment, and new materials. And, POSCO technical research laboratories took over technical research that directly dealt with their onsite functions such as iron processing and new product development. As a direct result of the research and development restructuring efforts by the POSCO Group, as of July 18, 1996, most of the 60 research staff members at the research laboratories have been transferred to RIST. It has then led to the suspension of the laboratories' application research capabilities, and in effect the technology planning, information system-geared technology headquarters had to take over the task of sustaining the traditions.

In 1998, the technology headquarters changed the name to the technical management office and has since managed areas not limited to technology, engineering work, quality assurance and computing, and contributed to implementing the computational infrastructure, building the foundation for project management, and establishing the ISO Quality Assurance System.

In addition, in 2001, in response to the changing responsibilities of the overall corporation, the integration of technical management office and technical research laboratories has enabled the company to strengthen the site support and solidify the role it plays as a research complex. At the same time, the research laboratory now operates as a functional structure, which oversees the planning implementation of the company's mid-to-long term technical development and policies, and fully supports the R&D in facility and construction fields.