November 2004
S&T for Development:
Experience of South Korea
Won-Young Lee
email: wyoung@snu.ac.kr
Technology and Management Graduate Program
Seoul National University
1
Some Preliminary Concepts
2
National Innovation System
Technological
Paradigm
Market
Mechanism
Social
Institution
3
Role of Government
Tax Incentives,
Promoter
Financial Incentives
IP Protection
User
gov
Producer
Governmental R&D
Procurement
Public Research Institutes
Pacer
Standards and Testing
Innovation Friendly Regulation
Institutional Reform for new Technological Paradigm
Industrial Policy
4
Technology Development Model of Developing Countries
Fluid Phase
Creation
Improvement
Assimilation
Acquisition
Transition Phase
Improvement
Specific Phase
Assimilation
Acquisition
Tech Stages
Devel Stages
Imitation
internalization
generating
Developing
Newly-Industrializing
Advanced
Country
Country
Country
5
From Imitation to Innovation:
Experience of Korea Since 1960’s
6
Stages of Industrial
Stages of Technology
Development
Development
Economic Take-off
1960
Imitation
Semi-industrial
development
1970
Structural Adjustment
1980
Internalization
Globalization
1990
Restructuring
2000
Generation
7
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
8
Major economic indicators
1960
Population(1000)
25,012
1970
1980
32,241 38,124
1990
2001
42,869
47,343
GDP(us billion)
2
8
62
253
422
GDP per capital
(us millon)
Trade balance
(us million)
Exports(us million)
80
248
1,632
5,900
8,918
-65
-597
-4384
-2004
9341
32
660
17,214
63,124
150,439
Imports(us million)
97
1,256
21,598
65,127
141,098
9
Major R&D Statistics
1963
1970
1980
1990
2001
4
33
428
4,676
12,481
Gov’t : Private
97:3
71:29
64:36
18:81
26:74
R&D/GDP
0.25
0.83
0.77
1.87
2.96
Researchers
n.a.
5,628
18,434
70,503
178,937
GERD(us million)
10
Evolution of R&D System
unit: %
1970
1975
1980
1985
1990
2001
Public
Institutes
Universities
84
66
49
24
22
13
4
5
12
10
7
10
Corporates
13
29
38
65
71
76
Total
100
100
100
100
100
100
11
Imitation Stage
Pony: The First Model Exported to North America by Hyundai in 1976
12
Innovation Strategy of the Imitation Stage
Demand Pull
Industrial Targeting
Diffusion-Oriented S&T
Need-Initiated R&D
International Networking
Government-Private
and Outsourcing
Partnership
Outward-looking Industrialization
Chaebuls
Apprenticeship Pattern of Innovation
General Trading Companies
S&T Infrastructure
Building
Government-Funded Research Institutes
Technology Diffusion Institutes
Daeduck Science Park
13
KIST Model
Manpower
Industry
S&T pool
Induce Scientist Engineers abroad
Manpower Pool
Attract High Quality Students in S&T area
Contract Research
KIST
Awareness of S&T
Model for Contract research
Social Respect for Scientists and Engineers
Introduction of Modern R&D
Society
Innovation Management
14
Institutions involving technology diffusion
Korea Productivity Center
SMI Promotion Corporation
Korea Academy of Industrial Technology
National Technology Institute
Regional Industrial Technology Institute
Industry-Specific R&D Institutes
Korea Institute of Industrial Design and Packaging
Inspection and Testing Institutes
Korea Standards Association
Industrial Technology Information Center
Industry Associations
15
Building of Daeduck Science Town(1980's)
Purpose
 To disperse people from the over-populated
Seoul Metropolitan area.
 To encourage mutual cooperation among GRIs
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
16
Incentives for Industrial Innovation
Tax Incentives
Tax Credit for R&D
Tax Credit for manpower Development
Technology Development Reserve Funds System
Reduction of Custom Duties on Equipments for R&D
Financial Incentives
Legal bases for venture capital company
Policy Financing for R&D and start-up
Credit guarantee for SMEs
Other Incentives
Relaxation of Zoning Regulation
Government Procurements for New-Technology Products
17
Internalization/Generating Stage
Camera Phone Made by Samsung
18
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
19
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
 Mission-Oriented Governmental
R&D Programs
 Technology Targeting
 Big Science
Build Infrastructure for
Creative Innovation
 Increased Investment for
Basic Science
 Increased Protection for
Intellectual Property Rights
 Promotion of Venture Companies
20
Vitalization of Research in Universities
What happened ?
1992
2002
Univ. R&D/Total Nation's R&D
6.1
10.4
Univ. Researcher/Total (full-time equivalent)
29.0
30.4
% of Univ.R&D funds from Industry
16.0%
13.0%
% of Univ. R&D funds from Government
55.4%
66.8%
Improvement
1. Quantity of R&D
2. R&D management
3. Competition among professors
Little Improvement
1.
2
2.
3.
Quality of R&D
University-Industry Cooperation
Ability to adjust changing environment
Competition among universities
What needs be done in the future ?
Government Initiated Change
Emphasis on Hardware
Self-Motivated Change
Emphasis on Software
21
Promotion of Cooperative Research
Cooperative R&D Promotion Law(1993)
priority funding of cooperative R&D
exchange of scientists and engineers among academia, industry, and research institution
provision of intellectual property rights for participating private company
Successful
Programs:
CDMA Technology Development
Union of College Professors for Industrial Technology Transfer
Korean High-Speed Railroad System
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
22
CDMA Technology Development
Qualcom
ETRI
Equipment Producers
CDMA
Network Providers
Ministry of Information
and Communication
Basic Research
Guide Industry Cooperation
Procurement
23
National R&D programs
basic and generic
applied R&D
Long-term
Large scale
HAN(G7) Project
goal-oriented
research
Creative Research
Strategic,
Initiatives
Initiative
researcher-oriented
Industrial
Basic Research
Short-term
Technology Program
Program
Small scale
diffusion-oriented
infra-oriented
Infrastructure,
Need-satisfaction
24
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)=>127,698(1990's)
25
Recommendations
26
Need-Oriented Approach
Manpower
International Outsourcing
Industry Needs
Contract Research
Technical Consultancy
Governmental Assistance
Testing
27
Systematic Approach
Supply of Manpower
Legal and Institutional Reform
Management System
Related Service
Industrial
Center
International Networks
Modern facility and Equipments
28
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
Intellectual Property Rights
Protection
Incentives for Cooperation
Institutions for Networking
Information Infrastructure
Help Utilizing Knowledge
Technology Road-mapping
Technology Evaluation
29