OECD Smart Specialisation Workshop
May 10-11, 2012
Gwangju
Photonics
Cluster:
Science
&
Technology
Instilling Bottom-up Processes
Policy Institute
LEE, Jeong Hyop, Ph.D (STEPI)
YOO, Dong Guk, Ph.D (Gwangju Technopark)
Contents
 Introduction
 Key features of the cluster/domain
 Regional and national policies that have
been decisive for prioritisation of domains
 Future development of the cluster:
grasping the opportunities for smart
specialisation?
1. Introduction
1.1 Case study introduction

Different context of Smart Specialisation Strategies
- Western bottom-up vs. Korean top-down

Gwangju photonics cluster
- Sharp growth through localization of national strategic
industrial programs
- Searching for new governing mechanism for new
technological opportunities
1
1. Introduction
1.2 Definition of the eco-system and its boundaries

Gwangju Photonics cluster: an agglomeration of the
photonics industry with strong policy intervention
Location of Gwangju and
photonics cluster
2
1. Introduction
3
1.2 Definition of the eco-system and its boundaries
Photonics cluster and major players
•Universities (4): ① Gwangju Institute of Science and
Technology (HQ), ② Chosun University (industry-academy
campus), ③ Chonnam National University (industry-academy
campus), ④ Nambu University (HQ)
•Research Institutes (9): ⑤ Advanced Photonics Research
Institute, ⑥ Gist Technology Institute, ⑦ Energy and Climate
Change Research Center, ⑧ ETRI (Optical Communication
Research Center), ⑨ KITECH (Gwangju Research Center), ⑩
KETI (Gwangju Regional Branch), ⑪ National Institute of
Environmental Research (Honam Branch), ⑫ Korea Photonics
Technology Institute, ⑬ KATECH Gwangju Center
•Service agencies (7): ⑭ Gwangju Technopark, ⑮ Korean
Industrial Complex Corp., ⑯ Korea Association for Photonics
Industry Development, ⑰ Honam Leading Industry Office, ⑱
Gwangju Science and Technology Cooperation Center, ⑲
Gwangju Design Center, ⑳ Green Car Parts Industry
Promotion Foundation
2. Key features
2.1 Historical development description

Asian Crisis in late 1997 and local consensus for new
economic development

Localization of national strategic industry from
comprehensive advice and opinions from central
government, universities, research institutes, etc

Two principles of the local Research Committee on S&T
Strategy (1998): no duplication with other regions and new
industry linked to national strategic industry promotion
programs

Official announcement of photonics industry vision and
promotion strategies (2000) with SERI feasibility study and
KIET consulting report
4
2. Key features
2.1 Historical development description
Photonics Industry Growth in Gwangju
5
2. Key features
6
2.1 Historical development description
Brief history of local economic growth and future direction of Gwangju
GRDP in Billion Korean Won
25,000
• 1st Regional Strategic
Industrial Promotion
Program: Photonics
industry in Gwangju
20,000
• Korea Association for
Photonics Industry
Development 2000)
15,000
• LED/LD
center for
packing pilot
production
technology
extension
(2002)
• Korea
Photonics
Technology
Instittute
(2001)
10,000
• Gwangju
Technopark
(1999)
• Gwangju
Design
Center
(2005)
• 2nd Regional
Strategic
Industrial
Promotion
Program:
Electronic
appliances
(2003)
• Next Generation
Automotive
Electronic Parts
Center (2007)
• 3rd Regional
Strategic Industrial
Promotion Program:
Four strategic
industries
(2009)
• Interregional
Networking
for New
Industrial
Promotion
5,000
0
1990
2000
Center of the South
West Region
2009
Strategic Industrial
promotion
2020
New Regional
Industrial
Promotion
2. Key features
7
2.2 Key assets in the economic system
Major institutes of Gwangju photonics cluster
Major institutes
Universities
Chonnam National University, Chosun University, Gwangju Institute of Science & Technology
(GIST), Honam University, Gwangju University, Nambu University, , Donggang College, Gwangju
Health College, Chosun College of Science & Technolory, Songwon University
Research
Institutes
Korea Photonics Technology Institute (KOPTI), KITECH Gwangju Research Center, ETRI Optical
Communication Research Center, KETI Gwangju Regional Branch, Advanced Photonics Research
Institute (APRI), GIST Technology Institute (GTI)
Service
Agencies
Gwangju Technopark, Korean Industrial Complex Corp.(KICOX), Gwangju Information and
Culture Industry Promotion agency, Gwangju SME Business Support Center, Korea Association
for Photonics Industry Development (KAPID), Korea Institute of Science and Technology
Information, Honam Leading Industry Office, Gwangju Design Center, Gwangju Science and
Technology Cooperation Center
Technology
Centers
Photonic and Optical Education Learning Center (POEL), Gwanju Digital Electronics Center
(JDEC), Human Resources Development Center, University Technology Extension Centers, R&D
Center for Titanium and Alloys, LED/LD Center, Home Robot Support Center, Automobile
Electronic Center
2. Key features
8
2.2 Key assets in the economic system
Functions of major institutes
Business
incubation
R&D
Pilot production
and equipment
services
Business
assistance
services
Education
and
training
Technology
transfer
KOPTI
○
◎
◎
◎
◎
○
KITECH
○
◎
○
○
△
△
APRI
△
◎
△
○
○
○
ETRI
△
◎
◎
○
△
○
Gwangju Technopark
LED/LD Center
◎
○
◎
◎
△
◎
KAPID
△
△
△
◎
○
△
GTI
△
○
△
△
△
◎
POEL
△
△
△
△
◎
△
KICOX
◎
△
△
◎
○
△
Note: Functional Importance: ◎ > ○ > △
2. Key features
2.2 Key assets in the economic system
9
2. Key features
2.2 Key assets in the economic system
10
2. Key features
11
2.2 Key assets in the economic system

LED: Samsung LED, LG Innoteck, Seoul Semiconductor, etc

Optical communication: Samsung Fiberoptics, Taihan, LSIS, etc
Unit: billion won, persons
3. Regional and national policies
3.1 Governance
12
3. Regional and national policies
3.2 Priority setting
13
3. Regional and national policies
3.2 Priority setting
14
3. Regional and national policies
3.3 Key policy instruments and investment
15
3. Regional and national policies
3.4 Coordination activities

Coordination mechanism
- public institutes specialized in specific functions with their
technological and human capacities
- promotion of local photonics industry and extensive attraction
of large companies and technology SMEs
- thematic networks organized by local promotion agencies

Issues for further cluster development
- Regional: fine-tuning of governing mechanism of local and
economic region for intensifying current networks
- National: support for nation-wide expansion of new photonics
product development
- International: strategic FDI inducement, expansion of various
research and marketing collaboration
16
3. Regional and national policies
17
3.5 Efforts to measure effects and impacts
Photonics industry growth by development phase
(Unit: Billion Won, Person, Company, %)
1999
(Before
program)
Sales
(growth rate)
Employee
Company
2003
(after first
phase)
113.6
323.4
1,896
47
2,834
190
2008
(after second
phase)
2009
(first year of
third phase)
1,615.7
1,307,9
(23.5%)
6,018
6,870
327
346
2010
(expected)
2011
(expected)
2,540
(57.2%)
8,004
360
3,000
(20.0%)
8,200
370
Shift-share Analysis of Gwangju Photonics Industry
Unit: Billion Won, %
1999~2003
2004~2008
1999~2008
Photonics Industry
Growth
National Share
Effect
Industrial Mix
Effect
Regional Share
Effect
24.7
4.8
6.5
13.5
(100.0)
(19.3)
(26.1)
(54.5)
200.3
14.7
26.1
159.5
(100.0)
(7.4)
(13.0)
(79.6)
229.3
(100.0)
15.2
(6.6)
29.1
(12.7)
185.0
(80.7)
3. Regional and national policies
18
3.5 Efforts to measure effects and impacts
Growth Index of Gwangju Photonics Industry
Unit : %
1999~2003
2004~2008
1999~2008
Gwangju
Korea
Gwangju
Korea
Gwangju
Korea
Employment
growth rate
2.76
-0.61
15.36
3.06
9.76
1.43
AV growth rate
21.60
12.13
35.14
15.12
29.12
15.12
Agglomeration Index of Gwangju Photonics Industry
Unit:: %
1999~2003
Company growth rate
2004~2008
1999~2008
Gwangju
Korea
Gwangju
Korea
Gwangju
Korea
2.88
4.24
14.08
4.62
9.10
4.45
4. Future development
4.1 Ambition, strategic plans and catalysts
Photonics 2020: New Vision for Photonics Industrial Development (2010)

Vision: to leapfrog to global top 3 from top 5 (current) and become a photonics global
hub

Three developmental goals
- photonics R&D cluster development through innovation and research capacity building
- industrial capacity building by attract large companies, boosting SME technology
companies, and FDI inducement with high caliber development
- backward and forward industrial linkages and cooperation system by creation of joint
demand among linked industries, localization of core parts and materials, international
R&D cooperation and marketing

Four strategies
securing original technology development capacity by promoting next generation
photonics technology development and enhancing global standard leadership with
accreditation and testing infrastructure
identifying new growth engines by focusing on fusion photonics technology areas for
which the local technological capacities to produce core optical parts can be leveraged
attracting domestic and foreign large companies and nurturing local SMEs by
intensifying business services
capacity building and effective coordination of local photonics support agencies
-
-
19
4. Future development
4.2 Strategic intelligence tools

Locked in the previous policy decision making process,
which is strong dependence on government programs
such as R&D special zone program

Smart specialisation strategy concept as an
appropriate tool for critical review and revision of
current strategies with strong participation of local
networks
20
4. Future development
21
4.3 Strategies fitness
Growth capabilities of Gwangju photonics industry
2010
2020
Leading local brand companies
◯
◑
Technological capabilities
◔
◕
Commercial capabilities
◔
◕
(Global) marketing capabilities
◔
◕
Small company dominating industry structure
◔
◑
Number of local photonics companies
◑
◕
Note:
◕>◑>◔>◯
4. Future development
4.4 Opportunities for international eco-system
development

The main competitive advantages in the cluster
- strong engineering capabilities which surpass the Chinese and are
almost equal to western countries with price competitiveness
- GPT (general purpose technologies) for next generation photonics
industry, which are partially available through GIST and other local
universities
- diverse engineering extension networks such as product
development, testing, and pilot production with local universities,
research institutes, etc.

To diversify local photonics industry which is currently focused on
LED and optical communication, it is required to extensively expand
its national and global networks for securing knowledge and
marketing.
22
4. Future development
23
4.5 Stakeholder and policy dialogue
Planning and
evaluation
Functions
Planning and performance
evaluation
Project Selection and
midterm evaluation
R&D
Business
services
Organizations
Gwangju Technopark
Gwangju Technopark
Local research institutes
Technology extension
Local research institutes
Equipment services
Local research institutes
Business incubation
Local research institutes and Technopark
Marketing services
KAPID and Gwangju Technopark
Others
Local research institutes, KAPID and Gwangju
Technopark
Human resource development
Local universities and research institutes,
KAPID and Gwangju Technopark
Networking
Sectoral networking by each institute and
general networking by Gwangju Technopark
4. Future development
4.6 Bottlenecks and threats

Weak capacities in the emerging areas of optical lens, sensors,
lasers, etc which serve as a source of new fusion industries

Shrinkage of the domestic LED market at the moment,
especially in LED TVs

Uncertain domestic and international procurement markets for
green growth (reliability, price, etc)

Rapid catch-up of Chinese companies in the area of LED and
optical communication parts and modules

Weak local linkages for next generation industry in the region
and with global players
24
4. Future development
4.6 Bottlenecks and threats
25
4. Future development
4.7 Searching for local future with the concept of
SSS
26
Thank you for your
attention!