S

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ST for Development Experience of South Korea
November 2004
Won-Young Lee
email wyoung_at_snu.ac.kr

• Technology and Management Graduate Program

Seoul National University
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• Some Preliminary Concepts

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National Innovation System
Technological Paradigm

Market Mechanism
Social Institution
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Role of Government
Tax Incentives, Financial Incentives IP
Protection
Promoter
gov
Producer
User
Governmental RD Public Research Institutes
Procurement
Pacer
Standards and Testing Innovation Friendly
Regulation Institutional Reform for new
Technological Paradigm Industrial Policy
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Technology Development Model of Developing
Countries
Fluid Phase
Creation
Improvement
Transition Phase
Assimilation
Acquisition
Improvement
Specific Phase
Assimilation
Acquisition
generating
Imitation
internalization
Tech Stages
Developing Country
Newly-Industrializing Country
Advanced Country
Devel Stages
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From Imitation to Innovation Experience of Korea
Since 1960s
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Stages of Technology Development
Stages of Industrial Development
Economic Take-off
1960
Imitation
1970
Semi-industrial development
Structural Adjustment
1980
Internalization
Globalization
1990
Restructuring
Generation
2000
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Imitation Stage
assimilation of imported technologies
textiles and consumer electronics
Internalization Stage
product based innovation
automobile, shipbuilding, DRAM, CDMA, TFT-LCD
Generating Stage
path-navigating innovation
Fuel cell, 4G mobile handset, next generation
vehicle
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Major economic indicators

1960 1970 1980 1990 2001
Population(1000) 25,012 32,241 38,124 42,869 47,343
GDP(us billion) 2 8 62 253 422
GDP per capital (us millon) 80 248 1,632 5,900 8,918
Trade balance (us million) -65 -597 -4384 -2004 9341
Exports(us million) 32 660 17,214 63,124 150,439
Imports(us million) 97 1,256 21,598 65,127 141,098
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Major RD Statistics

1963 1970 1980 1990 2001
GERD(us million) 4 33 428 4,676 12,481
Govt Private 973 7129 6436 1881 2674
RD/GDP 0.25 0.83 0.77 1.87 2.96
Researchers n.a. 5,628 18,434 70,503 178,937
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Evolution of RD System
unit

1970 1975 1980 1985 1990 2001
Public Institutes 84 66 49 24 22 13
Universities 4 5 12 10 7 10
Corporates 13 29 38 65 71 76
Total 100 100 100 100 100 100
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• Imitation Stage

Pony The First Model Exported to North America
by Hyundai in 1976
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Innovation Strategy of the Imitation Stage
Demand Pull
Industrial Targeting Diffusion-Oriented ST
Need-Initiated RD
International Networking and Outsourcing
Government-Private Partnership
Outward-looking Industrialization Apprenticeship
Pattern of Innovation
Chaebuls General Trading Companies
ST Infrastructure Building
Government-Funded Research Institutes Technology
Diffusion Institutes Daeduck Science Park
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KIST Model
Manpower
Industry
Induce Scientist Engineers abroad Attract High
Quality Students in ST area
ST pool Manpower Pool Contract Research
KIST
Model for Contract research Introduction of
Modern RD
Awareness of ST Social Respect for Scientists
and Engineers
Innovation Management
Society
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Institutions involving technology diffusion
Korea Productivity Center SMI Promotion
Corporation Korea Academy of Industrial
Technology National Technology Institute
Regional Industrial Technology Institute Industry-
Specific RD Institutes Korea Institute of
Industrial Design and Packaging Inspection and
Testing Institutes Korea Standards
Association Industrial Technology Information
Center Industry Associations
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Building of Daeduck Science Town(1980's)

• To disperse people from the over-populated Seoul
  Metropolitan area.
• To encourage mutual cooperation among GRIs

Purpose
Impacts

• Modern buildings and facilities
• Isolation from industry
• Not much synergy from agglomeration
• Difficulty to hire qualified scientists and
  engineers
• Not Much Cooperation among GRI's

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Incentives for Industrial Innovation
Tax Incentives
Tax Credit for RD Tax Credit for manpower
Development Technology Development Reserve Funds
System Reduction of Custom Duties on Equipments
for RD
Financial Incentives
Legal bases for venture capital company Policy
Financing for RD and start-up Credit guarantee
for SMEs
Other Incentives
Relaxation of Zoning Regulation Government
Procurements for New-Technology Products
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Internalization/Generating Stage
Camera Phone Made by Samsung
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Legacy

• Unbalanced Industrial Development
• - Strong Final Assembly Industry,
• but weak Capital Goods, and System
  Integration Industry
• - Rise of Chaebuls, and decline of SME's
• Unbalanced National Innovation System
• - Underdevelopment of University Research
  System
• - Dormant Industry-Academia Cooperation
• Lack of Infrastructures for Creative Innovation
• - Lack of Investment in Basic science
• - Weak Protection of Intellectual Property
  Rights
• - Underdevelopment of Venture Financing and
  support system

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Innovation Strategy in the Generating Stage
Promote Balanced National Innovation System

• Vitalization of University Research
• Networking among Industry, Academia, and GRI's
• Promotion of Cooperative Research

From Demand Pull to Supply Push
Build Infrastructure for Creative Innovation

• Increased Investment for
• Basic Science
• Increased Protection for
• Intellectual Property Rights
• Promotion of Venture Companies

• Mission-Oriented Governmental
• RD Programs
• Technology Targeting
• Big Science

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Vitalization of Research in Universities
What happened ?
1992 2002
Univ. RD/Total Nation's RD 6.1 10.4
Univ. Researcher/Total (full-time equivalent) 29.0 30.4
of Univ.RD funds from Industry 16.0 13.0
of Univ. RD funds from Government 55.4 66.8
Improvement
Little Improvement
1. Quality of RD 2 University-Industry
Cooperation 2. Ability to adjust changing
environment 3. Competition among universities
1. Quantity of RD 2. RD management 3.
Competition among professors
What needs be done in the future ?
Government Initiated Change
Self-Motivated Change
Emphasis on Hardware
Emphasis on Software
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Promotion of Cooperative Research
Cooperative RD Promotion Law(1993)

• priority funding of cooperative RD
• exchange of scientists and engineers among
  academia, industry, and research institution
• provision of intellectual property rights for
  participating private company

• CDMA Technology Development
• Union of College Professors for Industrial
  Technology Transfer
• Korean High-Speed Railroad System

Successful Programs
Less Successful Programs

• Korea Technology Transfer Center
• Manpower Exchange Program Between Industry and
  University

Why? Lack of demand-side consideration and
private's participation Failure for
systematic approach Do not tackle many
institutional obstacles
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CDMA Technology Development
Qualcom
ETRI
CDMA
Equipment Producers
Network Providers
Ministry of Information and Communication
Basic Research
Guide Industry Cooperation
Procurement
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National RD programs
basic and generic research
applied RD
HAN(G7) Project goal-oriented
Creative Research Initiatives researcher-oriented
Long-term Large scale
Strategic, Initiative
Basic Research Program infra-oriented
Industrial Technology Program diffusion-oriented
Short-term Small scale
Infrastructure, Need-satisfaction
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Intellectual Property Protection
Policy Reform

• Material Patent Law category 1986

• Computer Program Protection Law 1987

• New Patent Act 1995

• Strict Enforcement of Laws 1980's

Impact

• Increase in domestic Patent

4,157(1980's)gt127,698(1990's)
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Recommendations
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Need-Oriented Approach
International Outsourcing
Manpower
Contract Research
Industry Needs
Technical Consultancy
Governmental Assistance
Testing
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Systematic Approach
Supply of Manpower
Legal and Institutional Reform
Management System
Industrial Center
Related Service
International Networks
Modern facility and Equipments
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Promote Interactive Learning
Expand Means to Learn
Education and Training Ability to Respond
Changing Environments Communication capability
Build Infrastructure for Learning
Provide Incentives to Learn
Institutions for Networking Information
Infrastructure
Intellectual Property Rights
Protection Incentives for Cooperation
Help Utilizing Knowledge
Technology Road-mapping Technology Evaluation