Demand-Side Policy and Public Procurement for Innovation in … · 2015-05-29 · Demand-Side...

Demand-Side Policy and Public Procurement for

Innovation in Korea

UNICAMP Workshop

Campinas, Brazil May 29, 2015

Yongsuk Jang, Ph.D. Senior Research Fellow

[email protected]

• Demand-Side Policies for Innovation in Korea

• Public Procurement for Innovation in Korea

• Capacity Building for Regional Innovation in Colombia

• Global Value Chain and Demand-Side Policies for Innovation

Contents

Republic of Korea (South)

A Small Land with Scarce Resource

Industrial Shifts

1960s 1970s

1980s 1990s

Import Protection Foster export-

oriented light industry

Introduce new technology, expand technological capability

Promote import liberalization Expand investment

in technological development, training of skilled manpower

Strengthen

demand–driven technological innovation Establishment of

nationwide IT infrastructure

“Select and Focus” Strategy

STI Meets Industrial Demands

Light Industries

Heavy Industries

Assembly &

Processing Industries

IT Industries

New Growth Engines

Demand Side

Supply Side

•Self-Sustain •Import-

Subs.

•Import Protection •Export-Orient

•Mfg. Capacity

•Industrial Seeds

•Open Market

•Higher Value-added

•Industrial Diversificat

ion

•Import Tech. •Tech.

Capability

•Expand R&D

•Skilled HR

•Demand-oriented

Innovation

•Endogenous Tech.

Industry-Oriented STI Strategy

Roles of STI Policy in Korean Development

Period 1960s 1970s 1980s 1990s 2000s 2010~

Era Export-Oriented

Export-led Economic Liberalization

Democrat. Advancement Global Leading

Focused Industries

Light Industries

Heavy Industries

Assembly & Processing Industries

ICT Knowledge Intensive Industries

Knowl. Service/New Converging/ Green Ind.

Compet. Factor

Cheap Labor Skilled Labor Capital Investment

Technologies S&T Innovation

Advanced S&T Innovation

Demanding S&T HR

Skilled HR Technical HR Higher S&E High Calibre S&E

Creative S&E Creative & Converging S&E

Demanding Tech.

Plant Mgt. Facility M&O Mfg. Core Tech. Endogenous Tech.

Source Tech.

S&T Policy Turn-key Capital Import/ Tech. Learning

Internalizing Imported Tech./ Reverse Eng.

Modify Imported Tech./ Develop Domestic Tech.

Advancing Tech. Catch-up/ Large Gov. R&D Prog.

Focus on endogenous tech./ Systemize S&T Prog.

Globalize S&T/ Focus on Convergence

Imitation Catching-Up Innovation Endogenous Innovation

Paradigm Change

A Case: TDX Development Project (1977-1984)

ETRI (KICT) (1977)

TDTF (Telecom. Dev. TF)

(1981)

MPS (M. of Postal Service)

KIST

KT (KTA) (1981)

TDX-1 (1984)

TDX Op. Team

TDX Dev. Team

MOST (M. of S&T)

Dongyang E&T

LG (Goldstar)

Samsung E.

Spin-off

Crea

te

Establish

Com

mer

cial

ize

Coop.

Part

icip

ate

Form

Develop

Part

icip

ate

• Overview of Korean STI • An Interdisciplinary Journal on STI Policies around the world

• Vol.2, No.4 • Overview of Korean STI • Evolution of Korean STI • Institutional Building Stage • Tech. Catching-up Stage • STI Leadership Stage • Korean Shipbuilding Industry

• STEPI Guide to Korean STI Policies

• www.stipolicyreview.net

STI Policy Review





Contents

Public Procurements in Korea

From SMEs = $65 B (67.7%)

Total PP = $96 B NET = $1.9 B (9.2%)

SMEs (Product ) PP = $21 B

Source: Kbiz (2012)

Tech-Inno SMEs

SMEs

Inno-Biz SMEs

Venture Firms

SMEs with Business Innovation

Tech-Inno SMEs

Source: Choi et al. (2014) Improvement strategies of public procurement market policy for fostering technology based innovative SMEs, STEPI

Characteristics of Tech-Inno SMEs Venture Firms Inno-Biz SMEs

Registered 28,193 17,298 Experiences

in PP 2,662 (9.4%) 12,162 (70.3%)

PP Size $1.5 B $6 B

Registration Criteria

• Received over $5K from Venture Capital • Investing over $5K on R&D • Evaluated as Excellent in Tech. Appraisal from KIBO • Entitled for Policy Fund of SBC

• SMEs over 3 Years Old • Grades in Tech. Appraisal * Tech. Appraisal on Capabilities in technological innovation, commercialization, management, and performances

Supports ---

• Exempt from PPS Product Qualification • Preferential Purchase • Additional Points in Competition

Source: Choi et al. (2014)

Policy Types for PPI in Korea

R&D-Oriented Policy

Indirect

Direct

Marketing Oriented Policy

Tech Support for SMEs

Marketing Innovation Program

Performance Authentication and Assurance

Accreditation of New Tech & Products

Green Tech Procurement

Obligatory Procurement on New Tech-Inno Products

Preferential Procurement of Tech-Inno Products

Priority Procurement New Product Dev. w/ Approval Purchase

PPS SMBA

MOTIE KATS


• Focused on SMEs protection and support • need to re-orient to promote Tech-Inno

• PP based on existing demands • focused on price competition and stable supply • limits in creating new demands

• PP oriented to finished goods • limits in promoting R&D and innovation

• Limited in reflecting private sector demands • limited to construction and defense sectors

• Need to reform Tech Appraisal system and indicators • heavily depend on tech accreditation and quality certification

• Fragmented governance in planning public services

Problems and Challenges






Contents

• Project Period : 2014. 06. 01 ~ 2016. 05. 31 (2Y) • Target Area : Three Regional STI Parks in Colombia

– Bogota : The S&T Park of the National University of Colombia/ Focused on IT • Population : 7,674,366 / Altitude 2,640m

– Palmira : Technology Park of BioPacipico / Focused on Agriculture • Population : 247,986 / Altitude 1,001m

– Bucaramanga : Technology Park of Guatiguara / Focused on BT • Population : 530,900 / Altitude 959m

• Purpose of the Project 1) Capacity building for the Colombian STI policy planning and implementation 2) Support development of Master Plans for Three STI Parks 3) Capacity building of human resources for STI park policy planning, management and operation : Training Program (Korea) & Local Workshops (Colombia)

Project Overview

- Analysis of Colombian STI and industry -Analysis and examination of policy direction for Colombian STI parks legislations and institutions -Suggestions for establishment of STI policy think-tank -Suggestion for establishment of industry-university cooperation agency and cooperation strategies

- Policy Consulting -On-site training -Invitational Training Program in Korea -Local workshops in Colombia

- Analysis and examination of existing national STI park policies and plans for each STI park -Environment analysis for STI parks -Support establishment short-term development strategies, medium-term goal and long-term vision -Strategy development for linkages for industry-academia-research and strategic industry selection based on the characteristics of each STI park -Suggestions for management and operation mechanism, programs, functions and budget and financing of STI parks

Capacity Building for STI Policy

Human Resources

Development for STI

Development of Regional

STI Parks

Capacity Building of Colombian STI

Parks

Project Key Elements

Fostering sustainable Growth and Promoting national Competitiveness of Colombia

Development of Regional STI Parks

Human Resources Development for STI

• Strengthening STI policy

capacity by aligning regional

STI policy with national STI

policy

• Suggestions on establishing

STI policy think-tank

• Suggestions for

establishment of industry-

academia cooperation

agency

• Purpose of strengthening

functions of STI parks as a

base for developing regional

innovative capacity

• Suggestions on establishing

plan of industry-university

cooperation for sustainable

regional development

• Suggestions on management

and operations of STI parks

• Regional STI policy

consulting

• Sharing the Korean

approaches for STI policy

planning and

implementation practices

• Capacity building for STI

park policy making,

management and operation

• On-site training, invitational

training program in Korea,

and local workshops in

Colombia

Capacity Building for STI Policy

Project Purpose

Final Output Implementing Institutions Activities

National Strategy

Policy Think Tank

• Governance • Org. Structure • Research Area • Institutional M&O • Korean Experiences

MP 1

MP 2

MP 3

MA 1

MA 2

MA 3

* Management Agency

M&O Training TT & TC

* Technology Transfer * Technology Commercialization

Interim Success Cases

External Conditions : Governance, NDP, State STI Plan, FTZ, Career System, etc..

* Reform of OCyT * As an Internal Unit of Colciencias * A New Independent Think-tank

* Master Plan

Project Framework: Orientations and Tasks

• Vision 2019 • National Dev. Plan

2010-2014 • STI Strategic Plan

2010-2014

Sustainable regional development

Diffusion to other STI parks

Sustainable Regional Innovation Capacity

Building

Strategies for National STI

Parks

Bogota MP

Palmira MP

Bucara-manga

MP

Existing policies of three STI

parks

Colciencias

STI Policy Think-Tank

Bogota IUC*

Palmira IUC

Training Program

STEPI Working-level

Experts/Advisory Group

Consulting Workshop

• Daedeok Science Complex • Chung-nam Techno park (Automobile/

Electronics) • Pangyo Techno Valley (IT/Bio) • Osong BioValley(Medical Bio) • Korea National Food Cluster (Agriculture)

Team of Colombian

Counterparts (Primary CPs)

* IUC: Industry-University Cooperation Agency

Bucaramanga IUC

Implementation Structure

• No agreed concept and/or strategy on STI Park at national level (STI Park vs. Industrial Park) • General Royalties System (10% of Royalties for S&T Activities) does not function as STI Fund • Weak STI policy function at the national level • High turnover rate of personnel

AT NATIONAL LEVEL

BIOPACIFICO (Palmira, Valle del Cauca)

GUATIGUARA (Bucaramanga, Santander)

BOGOTA (Bogota, DC)

• Clear governance and leading agency (Dr. Miranda) • No strategic direction and plan (ambitious target: Life Science) • Eager to absorb M&O skills and know-hows

• UIS campus, but no clear governance or leaders • No strategic direction or plan with diverse targets including

energy, bio, oil-extraction, petro-chemical • Need to develop M&O practices

• Plan to locate the park in Universidad Nacional campus without clear governance and leaders

• No strategic direction and plan (STI Park with 4 Mega-projects) • Adjacent to Innovation Ring Initiative of Bogota city gov’t

Ruta N (Medellin, Antioquia)

• At Ruta N (Medellin, Antioquia) • 10-year old success case in venture incubating, but still no clear

incentive mechanism

Overview of Current Colombian Status





Contents

Global Value Chain (GVC)

Source: OECD (2013)

Process Upgrading • increasing the efficiency of internal processes such that these are significantly better than those of rivals

Product Upgrading • introducing new products or improving old products faster than rivals.

Functional Upgrading • increasing value added by changing the mix of activities conducted within the firm or moving the locus of activities to different links in the value chain

Chain Upgrading • moving to a new value chain

Upgrading GVC

Source: Kaplinsky and Morris (2001)

Thank You!

For Further Comments & Questions;

Yongsuk Jang [email protected]

Demand-Side Policy and Public Procurement for Innovation in … · 2015-05-29 · Demand-Side...

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