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Transcript of Innovation in Korea
Innovation in Korea Some General Issues
VTT, Finland
October 23, 2013
Seogwon Hwang, Ph.D.
Research Fellow at STEPI
• About STEPI
• Status quo of Korean Innovation Activities
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
Contents
* This is the material modified based on many slides provided by Dr. Yongsuk Jang in STEPI
• About STEPI
• STI in Korean Development
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
Contents
• Conduct research and analyze issues pertaining to STI
• Provide government agencies with policy ideas and suggestions
for the promotion of innovation
• Identify policy issues to effectively deal with future challenges
• Suggest strategic options in technology development for the
government as well as industry
• Create and disseminate S&T policy materials, data and
information
STEPI: Roles and functions
STEPI: Position
Prime Minister
President
MSIP Ministry of Science, ICT
and Future Planning
MOTIE Ministry of Trade, Industry
and Energy
KRCF Korea Research Council of
Fundamental Science & Technology (13 GRIs)
NRCS The National Research Council for Economics, Humanities and Social
Sciences
SMBA Small and Medium Business
Administration
STEPI Science and Technology
Policy Institute
PACST Presidential Advisory Council on
Science and Technology
ISTK Korea Research Council for Industrial
Science & Technology (14 GRIs)
STEPI: Organization
Ministry of Science, ICT and Future Planning
Ministry of Trade, Industry and
Energy and Other Ministries
Foreign Countries
Local Governments
Research Advisory Committee
Auditor
National Research Council for Economics, Humanities and Social Sciences (NRCS)
Prime Minister
President
President
Vice President
Division of
Basic and
Public
Research
Division of
Innovation
Policy
Research
Division of
Industrial
Innovation
Research
Center for
Future
Studies
HRST Joint
Research
Center
Division of
Global
Policy
Research
Center for
Human
Resources
Policy
Division of Planning and
Management
STEPI: History
The Center for Science
and Technology Policy
(CSTP) was established.
CSTP was renamed
the Science and
Technology Policy
Institute (STEPI).
The 25th Anniversary
Decision made to establish
STEPI under the KCESRI
based on the “Law on the
Establishment, Operation and
Promotion of Government
Sponsored Research Institute”.
Dr. Jong-Guk SONG was
appointed as the 12th
president of STEPI.
The KCESRI was
reorganized into the
National Research Council
for Economics, Humanities
and Social Science (NRCS)
1987.1
1993.5
1999.5
2005.7
2012.5
2011.8
SCIENCE AND
TECHNOLOGY
POLICY
INSTITUTE
Originated in 1967 as a Division of KIST
STEPI: Researchers and Staffs
Total of 137 Employees
Executive Administrative Staff Research Staff
Academic Backgrounds of the Researchers
21 (36.2%)
12 (20.7%)
14 (24.1%)
11 (19.0%)
Economics
Business Administration
Political Science & Science and Technology Policy
Science and Engineering
1 22 114
STEPI: Researches
60%
40%
Grant Researches
• Basic Research
• Issue-focused
• Pilot Research
• Contract-outs
Contract Researches
• Agency-directed
• Customer-oriented
* Government Money, eventually
• Overview of Korean STI • An Interdisciplinary Journal on STI Policies around the world
• www.stipolicyreview.net
STI Policy Review
Question 1: Innovation policy researches for business?
• Critique of distance between policy (research) and business
reality
• Can STEPI do help firms to make profits from innovation?
Question 2: More Evidence Based Policy?
• Much more facts and evidences needed for decision making
• Construction of indicators and indices based on S&T data
• About STEPI
•Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
Contents
Republic of Korea (South)
A Small Land with Scarce Resources
Korea's Economic Development, 1953-2010
$67 (1953)
$23,679 (2012)
Source: The Bank of Korea, IMF • 1953-1970: Per Capita GNP (current US$, 1975 base year) • 1971-2010: Per Capita GNI (current US$, 2005 base year)
15th Largest Economy in 2012
2nd Poorest Country in 1945
Trends of Total R&D Exp. and R&D/GDP in Korea
Source: NTIS (www.ntis.go.kr)
1.4 10.5 42.7 211.7 1,155.2
3,210.5
9,440.6
13,848.5
16,110.5 17,325.1
19,068.7
22,185.3
24,155.4
27,345.7
31,301.4
34,498.1
37,928.5
43,854.8
0.20
0.37 0.42
0.56
1.41
1.68
2.30 2.30
2.47 2.40
2.49
2.68 2.79
3.01
3.21
3.36
3.57 3.74
0.00
1.00
2.00
3.00
4.00
0.0
10,000.0
20,000.0
30,000.0
40,000.0
50,000.0
1964 1970 1975 1980 1985 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
GER
D/G
DP
To
tal R
&D
(BillionKRW)
(%)
$ 44 Billion (4.03%)
in 2011
Target
5%
Public R&D Investment Growth
3.0
0.002
16.0
Government’s R&D Budget (Trillion KRW)
Public R&D Investment
1963 1997 2012
Source: NTIS (www.ntis.go.kr)
Trends of Public vs. Private R&D Investment in Korea
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%1
96
4
19
66
19
68
19
70
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
Private Share, %
Gov. Share, %
Source: MEST (www.mest.go.kr), NTIS
Public: Private = 26: 74 (2011)
Korea in Global R&D (2011)
Source: Battelle (2011)
Total Number of Researchers Growth
375,176
138,438
2,962
Total Number of Researchers
Total Number of Researchers
1964 1997 2012
Source: NTIS (www.ntis.go.kr)
Major S&T Achievements
International Patents Science & Technology Articles
2003 2005 2006 2004
세계
순위
2007 2008 2002 2001
1984 1997 2012
13,233 (3th)
11,846 (5th)
1,891
288 30 10
1981
44,718 (11th)
1997 2011
7,870 (18th)
4 (53th)
Science & Technology Competitiveness (IMD)
3th
14th 12th
13th
17th
14th
10th 7th
5th
21th
17th
24th
8th
2th
6th 6th
14th
Science Competitiveness Technology Competitiveness
14th
2009
No. of PCT Applications No. of US Granted Patents Number of Articles (Ranking)
Source: NTIS (www.ntis.go.kr)
Question 3: many articles and patents but then?
• Low R&D productivity in terms of commercialization
• tech transfer, spin-off, etc.
Korea US
University GRI total University GRI total
Royalty Revenue (Million$) (C) 52 101 153 1,764 576 2,340
R&D Expenditure (Million$) (D) 5,645 5,993 11,638 52,232 5,366 57,598
R&D Productivity (%) (C/D) 0.9 1.7 1.3 3.4 10.7 4.1
Source: MOTIE, 2011
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
Contents
Industrial Shifts and STI Policies
1960s
1970s 1980s
1990s
Import Protection
fostering export- oriented light industry
expanding technological capability (absorptive)
import liberalization
expanding
investment
in technological
development
training skilled
manpower
strengthen technological innovation
establishment of nationwide IT infrastructure
Industrial Shifts: Select and Focus
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
•Innovation
Capability
•original
Tech.
1982
Institutional Building
Technology Catching-up
Innovation
1981 1971 1967 1962 1987 1991 1997 2004 1966
Korea Institute
of S&T (KIST)
1992
Korea Advanced Institute
of Science (KAIS)
National R&D
Program (NRP)
Ministry of S&T
(MOST)
Technology
Development Promotion
Act
Industrial Generic
Technology
Development Program
(IGTDP)
Deputy Prime
Minister of MOST
(OSTI)
Information and
Communication R&D
Program (ICRP)
Highly Advanced
National Project
(HAN)
1st 5-Year
Economic Plan Financial
Crisis
2013 2008
MEST & MKE
MSIP
Evolution of Korean STI Policies I
1960s
• STI Policies
- Establish Scientific and Technological Infrastructure (e.g., KIST)
- Initiate S&T Education (e.g., KAIS)
- Promote Foreign Technology Imports
- Establishment of Ministry of S&T (MOST)
• Industrial Policies
- Import-Substitution Industries (Textiles, Plywood, etc.)
- Expand Export-oriented Light Industries (export subsidy, preferential financing)
- Five-Year Economic Plans
- From Agriculture to Labor-intensive Light Manufacturing Industries
1970s
• STI Policies
- Expand Technical Training
- Improve Institutional Mechanism for Adapting Imported Tech. (GRIs)
- Invite eagerly Korean Scientists trained overseas
- Promote Research Applicable to Industrial Needs
- Promote Imports of Foreign Tech. (imitation, reverse engineering, imports of capital goods)
• Industrial Policies
- Expand Heavy & Chemical Industries (e.g., machinery, shipbuilding, chemicals, marine science, electronics, electricity)
- Capital and Technology Imports
- Strengthen Export-oriented Industrial Competitiveness
- Foster Chaebols (e.g., Samsung, Hyundai, LG)
1982
Institutional Building
Technology Catching-up
S&T Leadership
1981 1971 1967 1962 1987 1991 1997 2004 1966
Korea Institute
of S&T (KIST)
1992
Korea Advanced Institute
of Science (KAIS)
National R&D
Program (NRP)
Ministry of S&T
(MOST)
Technology
Development Promotion
Act
Industrial Generic
Technology
Development Program
(IGTDP)
Deputy Prime
Minister of MOST
(OSTI)
Information and
Communication R&D
Program (ICRP)
Highly Advanced
National Project
(HAN)
1st 5-Year
Economic Plan Financial
Crisis
2013 2008
MEST & MKE
MSIP
Evolution of Korean STI Policies II
1980s
• STI Policies
- Reluctant to TT from Advanced Economies
- Pressure on Strong IPR
- Develop and Acquire Top-level Scientists and Engineers
- Perform National R&D Projects Efficiently (e.g., NRP, IGTDP, AEECTP, ICRP)
- Promote Industrial Technology Development
- Promote Collaborative R&D (San-Hak-Yun)
• Industrial Policies
- Economic Slowdown due to the oil shock / Trade Imbalance
- Restructuring heavy and chemical Industries
- Expand Technology-intensive Industries
- Encourage Human Resource Development and Improve Productivity of Industries
- Promote SMEs
1990s
• STI Policies
- From Imitation to Indigenous Innovation
- Realign National R&D Projects
- HAN Project (Long-term, Large-scale)
- Construct S&T Infrastructure
- Basic Research at Universities
• Industrial Policies
- Financial Crisis and Deep Restructuring of Industrial and Financial Structure
- From Imbalanced to Balanced Growth Strategy
- Investment for Network Infrastucture
- Information Tech. (e.g., Computer, Semiconductor)
1982
Institutional Building
Technology Catching-up
S&T Leadership
1981 1971 1967 1962 1987 1991 1997 2004 1966
Korea Institute
of S&T (KIST)
1992
Korea Advanced Institute
of Science (KAIS)
National R&D
Program (NRP)
Ministry of S&T
(MOST)
Technology
Development Promotion
Act
Industrial Generic
Technology
Development Program
(IGTDP)
Deputy Prime
Minister of MOST
(OSTI)
Information and
Communication R&D
Program (ICRP)
Highly Advanced
National Project
(HAN)
1st 5-Year
Economic Plan Financial
Crisis
2013 2008
MEST & MKE
MSIP
Evolution of Korean STI Policies III
2000s
• STI Policies
- New Growth Engines (Bio/Nano/IT, Green Growth, Creative Economy)
- Develop Regional Innovation Clusters
- Decentralization of R&D Authorities but Emphasis on Coordination
- Five-Year S&T Principal Plan
- Efficiency of Gov. R&D Investments (Evaluation Emphasis)
- National Technology Road Map (NTRM)
- Private Sector-led NIS
• Industrial Policies
- Searching Sustainable Growth based on Tech. Innovation
- “Select and Concentrate”
- Differentiated Strategies for Major Industries, Future Strategic Industries
- Regional Development
- Entrepreneurships (Venture Capital, KOSDAQ)
- Globalization (FTAs with Chile, U.S., EU, China)
Standing NSTC in 2011
President
Others MKE MEST NSTC
Prime Minister
ISTK
14
GRIs
NRCS
26
Policy
Inst.
KRCF
13
GRIs
For Effective
Coordination Standing NSTC as a Control
Tower with STI Policy
Coordination and R&D Budget
Allocation Power
New Governance for Creative Economy (2013)
President
Others MOTIE MSIP
Prime Minister
MOSF
For Driving
‘Creative Economy’
* MOSF: Deputy Prime Minister and Ministry of Strategy and Finance
* MSIP: Ministry of Science, ICT and Future Planning
* MOTIE: Ministry of Trade, Industry and Energy
S&T Trade ICT Industry
Energy
Economy
NSTC Budget
Question 4: Still “Select and Concentrate”?
• Uncertainty Uprising: From Imitation to Innovation
Wibro: Almost diminishing
WIPI: Withdrawn just as a useless regulation in the walled garden
Public Certificate for online exchange: ?
Question 5: One Company Risk?
• One extremely big company for a country
System risk management
Resilience with Innovation Capability
Capability of Human Resources, Entrepreneurship and Mobility
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
Contents
Triple Helix for Innovation
• Government (GRIs) • Government-sponsored
Research Institutes (GRIs)
• Research for Public Purposes
• Applied Research
• Universities • Supply S&Es
• Curiosity-driven
• Basic Research
• Firms • Commercialization
• Produce Innovations
• Development Research
Evolution of Korean Triple Helix
Univ. GRIs
Firms
60’s
70’s
80’s
90’s
2000’s
GRI-led / Univ.-supported
Industrial Innovation!
• Leading Player for Korean Innovation • Independent non-government organizations with government’s
financial supports
•Operating under the GRI Laws and civil laws
•Conduct about Half of Public R&D Investments (13% of the total
expenditure in 2011)
•KIST was established in 1966 with help of USAID
•27 (13 under KRCF & 14 under ISTK) S&T GRIs (as of 2011)
• Role Shifting • Absorbing & Internalizing imported foreign tech. (1970s)
• Modifying imported tech./Developing domestic tech. (1980s)
• Advancing catching-up tech. (1990s)
• Focusing on Endogenous Tech. (2000s~)
• Major Function: Providing Needed Tech. to Industries
• Challenges • As Private R&D Labs and University Researches Grow,
• Need to Redefine its Role
Roles of GRIs
Evolution of Korean GRIs
1990 1980 1945 1970 1966 1960 2000
NIMS
2005
NFRI
1996
KRRI
1996
KIOM
1994
KITECH
1989
KBSI
1988
KRIBB
1985
WKIMCHI
2010
KFRI
1987 KIER
1977
KRICT
1976
KERI
1976
KIMS
2007
KARI
1989
KIMM
1976
ETRI
1976
KRISS
1975
KIT
1982
KASI
1974
KOPRI
1987
KORDI
1973
KIST
1966
KICT
1962
KISTI
1991
KAERI
1959
KIGAM
1948
STEPI
1987
NSRI
?
• Korea-US Summit in 1965 • Between then Presidents, Park
Chung Hee and Lindon B. Johnson
• ‘Foundation of a research institute
for Korea’s Growth in industrial
technology and applied science’
• Under USAID Program
• Models < vs. > • Bell Lab: Research for Basic
Science
• Battelle: Industry-oriented Tech.
Dev. for Catching-up
• Growth • 1966: 50 FTE & 200 M.KRW
• 2010: 700 FTE & 250 B.KRW
KIST: The First Korean GRI
• Principles • Close to Industries
• Operational Autonomy
• Stable Funding
• Transparency
• Reservoir of High-Caliber S&E Human Resources • Korea High Fever on Education (College Enrollment Rate: ~70%)
• More than 400 Higher Education Institutes
• Holds about 70% of S&E Ph.D.s
• Excessive Teaching Orientation
• Conduct Only 10% of Gross R&D Expenditure (2011)
• Enforcing its Research Function • KAIST, the first S&T Research Univ., was established in 1971
• Allocating More Public R&D Investment to Universities
• Promoting Basic Researches
• Various Programs such as BK21, WCU, WCI, etc.
• Challenges • Shrinking S&E Enrollment
• Weak Univ.-Industry Partnership
• Into the World Class Level
Roles of Universities
• Education + Research • Supply High-Caliber S&Es to GRIs & Industries
• Conduct Mid- & Long-term Researches
• Under Different Governance
• Under MSIP • Most Universities were under auspices of Ministry of Education
(MOE)
• S&T-specialized Universities were under auspices of MSIP
• Operational Autonomy
• Stable & Growing Funding
• Expansion • POSTECH (Private Univ. sponsored by POSCO)
• GIST, DGIST, UNIST (Public Univ. funded by Government)
S&T-specialized Research-oriented Universities
• Korea Advanced Inst. of S&T • Established in 1971
• Under Special Law on KAIS
• With Government Funding
• Provided High-Caliber S&Es
• Evolution • Staffed with Oversea-trained
Korean S&Es
• Merged with KIST in 1981
• Undergraduates in 1986
• Split out from KIST and Moved to
Daejeon in 1989
• Current • Faculty: 700+ (Int’l: 100+)
• Student: 8,000+ (Int’l: 300+)
KAIST: The First Research-oriented Graduate School
• Functions • Education & Research
• Theoretical & Applied
Researches
• Mid- & Long-term R&D
• Incubate
Entrepreneurs
Evolution of Korean Universities
400
300
100
1965 1970 1980 1990 2000 2010
200
UNIST
2009
DGIST
2003/2010 GIST
1993
KAIST
1971
POSTECH
1986
No. of Higher Education
Source: MEST (2010)
*S&T-Specialized Univ.
A Success Story: 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
Cre
ate
Establish
Com
merc
ialize
Coop.
Part
icip
ate
Form
Develop
Part
icip
ate
• Triple Helix • Major Players for Modern Innovation • Each has its own designated Role • Collaboration among Triple Helix is Essential • For Development, Which Player should go First?
• Western Model (Balanced Strategy) • All Players should be developed in Balance • Based on Traditional Simple-Linear Innovation Model • Basic R -> Applied R -> Development -> Innovation • Assume Automatic Spillovers
• Korean Model (Unbalanced Strategy) • Under very limited framework conditions • University vs. GRIs • Korea chose GRIs to take a lead for Catching-up • Later, promote Research in University • Essence is Education!
Policy Implications for Late-Comers
Question 6: How to Renovate GRIs?
• Roles and Outcomes
Chabols do not need GRIs anymore for their own innovation.
SMEs not satisfied with the role of GRIs
Activities of TT and Spin-offs very weak
Universities getting better than GRIs in basic science and research
Question 7: Universities at risk?
• Dependence on Foreign Universities
Recruiting professors mainly educated in the US
Excellent students studies overseas, mainly in the US
Brain drain vs. brain gain
• Very basic problem of population structure
Number of students decreasing steeply
No graduate students in many universities: Are the professors in those
universities able to conduct researches without assistance from students?
Unbalance between the number of Ph.Ds (70%) and the portion of R&D
expenditure (10%)
Source: KOSTAT (www.kostat.go.kr), recited from http://misto.tistory.com/51
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
Contents
How Has Korea Evolved?
Korea
Current
U.S.
Japan UK ?
FACTOR-
DRIVEN
INVESTMENT-
DRIVEN
INNOVATION-
DRIVEN
WEALTH-
DRIVEN ?
Korea
1990s
Korea
1980s
Korea
1970s
Korea
1960s
From IMITATION To INNOVATION
In
Innovative
Way
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 ICT and
Diversification
Services/
Fusion Tech./
Green Ind. ?
Compet.
Factor
Cheap Labor Skilled Labor Capital
Investment
Technologies S&T
Innovation
Advanced S&T
Innovation ?
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
indigenous
tech./
Systemize
S&T Prog.
Globalize
S&T/ Focus on
fusion tech.
and green
growth ?
Imitation Catching-Up Innovation ? Paradigm
Change
• Creative S&E and Job Creation • Advance Education System for Creative HRD • Job Creation for Young Generation
• Linking Basic Research to Innovation • Overcome ‘Valley of Death’ and ‘Darwinian Sea’ • Strengthen Collaboration among GRI-Univ.-Firm
• New Growth Engines and Global Competitiveness • New Emerging Areas incl. Stem Cell, New Energy, Brain Research, IT-based Fusion Tech., etc. • Mega Sciences in Space, Defense, Marine, Security, etc.
• New Science Culture • S&T for Social Challenges
Challenges in Korean STI Policies
Source: Cho (2012)
Where
should I go?
I may just
follow him!
They are too
far away!
Evolution of Korean STI Strategy
Themes for Research Collaboration from the Questions
Q: Innovation policy for business?
• Market demand for innovation
policy research entities
Survey: Demand of Innovative
firms
Demand of Consulting firms
(eg) service of innovation
information
(eg) Technology and market
foresight
• STEPI
center for strategic foresight
S&T indicators team
Division of industrial innovation
research
Q: Evidence Based Policy?
• Indicators and indices
• Technology Barometer
TEK/VTT + STEPI
Korean case addition
• Impact analysis
• STEPI
S&T Indicator team
Q: Many articles and patents, but
then?
• R&D productivity
Comparative study among
countries including Finland and
Korea
Comparing the productivity of each
area of University, GRI and Industry
• Technology transfer policy
• Entrepreneurship among
researchers
• STEPI
Division of Innovation Policy
Research
Division of Basic & Public Research
Q: Still “Select and Concentrate”?
• Macroculture of National
Innovation System
From bureaucratic management to
autonomy
Entrepreneurship
• Incentive Mechanism and
Behavioral Approach
• STEPI
Division of Innovation Policy
Research
Q: One company risk?
• Finnish Experience and
potential risk in Korea
Nokia and Samsung
• Not only Samsung
Impact of chabol companies in
Korean economy and innovation
Historical experiences of over-
leverage
• STEPI ?
some criticizing scholars of other
organizations in Korea
Q: How to renovate GRIs?
• Case: VTT renovation
Renovation and corporatization
• Benchmarks?
Fraunhofer’s matchning
mechanism
• STEPI
Division of Basic & Public Research
Q: Universities at risk?
• Demand and Supply of HR
• Under population of young
generation but Over population
of the high-educated
Going global
Reunification
Much more and faster growth with
Disruptive Innovations ?
• STEPI
Center for S&T Human Resources
Policy