Innovation Congress in Astana
Industrial Innovation in Korea
May 22, 2014
Key-Hyup Kim, Ph.D.
Advisor
Advanced Institutes of Convergence Technology
Seoul National University
Table of Contents
I.
Introduction
II. Main Industries in Korea
III. Current R&D in Korea
IV. KFS for Industrial Innovation
V. Implication for Kazakhstan
VI. Future Cooperation
VII. Concluding Remarks
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I.
Introduction
 Economic Miracle of Korea by Compressed Growth
$ 67 /p in 1953 → $ 23,679 /p in 2012 (IMF)
 “Land of Morning Calm” to “Dynamic IT Korea”
Highly digitally connected country
 Manufacturing Industries and Export as Drivers
for Continuous Economic Growth
 Limitation of Imitation & Need for Real Innovation
“Catch-up” phase to “Front runner” stage
 Kazakhstan’s Industrial Innovation for 21st Century
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II.
Main Industries in Korea
Five Major Manufacturing Industries
 Information Technology Industry
• Semi-conductors, Displays
& Mobile phones
 Shipbuilding Industry
 Automobile Industry
 Steel Industry
 Petrochemical Industry
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II. Main Industries in Korea
A. Information Technology Industry (’12)
 Semiconductor Business(M.S. 13.9%, 3rd)
 Dramatic achievement since 1981
 Focused on DRAM market
Samsung and Hynix, 41% & 23% M.S.
 Concerted Effort by the Government
“Semiconductor Promotion Plan” (’81)
GRI, ETRI’s R&D Effort with Industries
 Display Products
 42.1 % of Global M/S by Samsung & LG
 Global LCD/LED/PDP/OLED Market Development
 World Leader in Mobile Phones (Samsung)
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II. Main Industries in Korea
B. Shipbuilding Industries (’12)
 # 1 Global Leader in the World (M.S. 36.2%)
 First Shipbuilding in ‘70’s by Hyundai Heavy Industries
 Currently More Value Added Engineering Business
 Main Products
 LNG Carrier, VLCC, Oil tanker, Oil drilling ship
FPSO (Floating Production Storage Off-loading)
 Advanced Design & Manufacturing Technologies with
Project Management Capability
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II. Main Industries in Korea
C. Automobile Industry (’12)
 5th in the World (Market share 5.8%)
 Hyundai, KIA, GM-Korea, Ssangyong, S-Ranault
 Driver for Growth of Many Related Industries
 More than 20,000 parts in a Car
 Many SMEs involved in as suppliers
 Main Job creator for Korea (~7.3% overall)
 Energy & Environmental Issues
 Electric Car and New Battery Technologies
 Intelligent Transportation System
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II. Main Industries in Korea
D. Steel Industry(’12)
 Current Position of Korean Steel Industry
 Rank 5th in Production/yr, Rank 6th in Export
 Global Production: 3.6%, Consumption: 4.2%
 POSCO ranked 5th, Hyundai Steel ranked 25th
 “FINEX Method” Development by POSCO
 Revolutionary Production Technology
 Economical and Eco-Friendly Technology
Cost Reduction by 20%, Pollution Reduction by 25%
 Total R&D Investment : $ 130 Mil. from 1992
7
II. Main Industries in Korea
E. Petrochemicals Industry(‘12)
 Global 5th Ethylene Capacity in the World (M.S. 5.2%)
 Big Oil Refinery & Naptha Crackings for
Energy & Bulk Plastics Raw Materials
 Huge Petrochemicals Capacity (55 M Ton/Y)
 PE, PP, PVC, PS, PET
 All Licensed Technologies from Overseas
 Need More Value-added Products for Survival
 Global Leading Chemical R&D Strategy
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III. Current R&D in Korea
A. Korean National Innovation System (KNIS)
 Innovation Actors & Network
 Korean Government
 Government Research Institutes (GRIs)
KIST,ETRI, KITECH and Others (26 institutes)
 Universities : SNU, KAIST, POSTECH …
 Private Sectors : Large Corporations & SMEs
 Linkers among Innovation Actors
 TIC (Technology Innovation Center)
 RIC (Regional Innovation Center)
 Technology Parks
 Many Ind. – Univ. – GRIs Clusters
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III. Current R&D in Korea
B. KNIS - Input
 R&D Expenditure and Number of Researchers per Year
1969
1980
1990
2000
2010
9.8
211.7
3,210.5
13,848.5
43,854.8
- Public
7.2
(73%)
105.5
(50%)
510.8
(16%)
3,816.9
(28%)
12,270.2
(28.0%)
- Private
1.8
(18%)
102.4
(48%)
2,698.9
(84%)
10,023.4
(72%)
31,489.6
(71.8%)
- Foreign
0.8
(8%)
3.8
(2%)
0.8
(0%)
8.2
(0%)
95.0
(0.2%)
5,337
18,434
70,503
159,973
345,912
- GRIs
2,413
(45%)
4,598
(25%)
10,434
(15%)
13,913
(9%)
26,235
(7.6%)
- University
2,142
(40%)
8,695
(47%)
21,332
(30%)
51,727
(32%)
53,270
(15.4%)
- Private
782
(15%)
5,141
(28%)
38,737
(55%)
94,333
(59%)
266,407
(77%)
R&D expenditure (B won)
Number of researchers
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III. Current R&D in Korea
C. KNIS - Output
 S&T Competitiveness, Patent, & SCI Papers
2008
2009
2010
2011
2012
2013
31th
27th
23th
22th
22th
22th
- Science
5th
3th
4th
5th
5th
7th
- Technology
14th
14th
18th
14nd
14th
11th
61,115
42,129
51,404
72,258
84,061
n.a.
7,899
(4th)
8,035
(4th)
9,669
(5th)
10,447
(5th)
11,847
(5th)
n.a.
Number of SCI Paper
34,344
(12th)
37,730
(12th)
41,385
(11th)
45,435
(11th)
47,066
(10th)
n.a.
- Average Citation
Number
3.29
(30th)
3.47
(30th)
3.86
(31th)
4.07
(30th)
4.23
(31th)
n.a.
Rank of National
Competitiveness
1)
Number of Patent
Registration 2)
- International Patent
Application 3)
IMD (International Institute for Management Development)
(World Intellectual Property Organization)
3) PCT (Patent Cooperation Treaty)
1)
2) WIPO
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III. Current R&D in Korea
D. Roles of the Innovation Actors
 Government
 Development of Science & Technology Infrastructure
 Established Korea Institute of Science & Technology in 1966
Established several GRIs as spin-offs from KIST in ’70s
Established Korea Advanced Institute of Science & Technology
(KAIST) in 1975
 Direct R&D Support to Universities and GRIs
 Preferential finance and tax concessions for Industry R&D
 University
 The rapid expansion of S&T human resource education
 More teaching-oriented than research-oriented
 Recent emphasis on more basic & applied research
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III. Current R&D in Korea
E. Past Role of the Korean Innovation Actors
 GRIs
 Important role in industrial R&D in ’60s and ’70s
Helped firms to acquire foreign technology
Informally diffused technology thru reverse-engineering
Supplied experienced researchers for Industry
 Joint research & development with large firms
 Backbone of national R&D since 1982
 Private Sectors
 Large firms established corporate R&D centers in the ‘80s
Samsung, LG, Hyundai and SK group, etc.
 SMEs started R&D activities rather recently
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III. Current R&D in Korea
F. Transformation of Korean GRIs
Stage
1960s ~ 1970s
1980s
1990s
Domestic Situation
• Inadequacy of
university &
industry research
• Expansion of
industry & univ.
research
• Foundation of industry-led system
• Expansion of university research
Structure
• Established KIST
(1966)
• Established GRIs
in industry priority
• Amalgamation of
GRIs (1980)
• 2 restructuring of
GRIs (1991)
• Established
Research
Councils system
(1999)
Main Control
Ministry
• Decentralized by
relevant Ministries
• Centralized by the
Agency of S&T
• Decentralized by
related Ministries
• Centralized by the
Office of Premier
• MOST, MSIF
Mission
• Support industrial
technology
• Support industrial
technology
• Perform national
R&D programs
Research Focus
• Imitation of mature
foreign
technologies
• Imitation of mature,
• Expansion of
advanced foreign
public R&D
technologies
nd
• Perform national
R&D programs
2000s
• Develop future
technology
platforms
• Development of
growth engine
technologies
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III. Current R&D in Korea
G. Strength of Korean R&D
 Well trained Human Resources
 Strong Industry base to Commercialize R&D result
 One of the best IT Infrastructure
 Good Reverse Engineering Records
 Imitation & Catch-up of New Products & Process
 Speedy Development & Fusion Capabilities
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III. Current R&D in Korea
H. Weakness of Korean R&D
 Research & Development Culture Problems
 Too Short-term and Short-sighted
 Lack of Tolerance and Patience
 Shallow Basic Science Foundation
 Physics, Chemistry, Math, and Biology, etc.
 Mainly Product-oriented R&D by Reverse Engineering
 Very Poor Global Networking and Cooperation
 Science &Technology : Not popular to young people
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IV. KFS for Industrial Innovation
Key Factors for Success
 Government Driven Economic Development in ’60~’70s for
Heavy-Chemical Industries & followed by IT Industry
 Big Chaebols’ Well Organized Management
 Trained HRs internally and Experienced HRs from the U.S.
& Japan , etc.
 Successful Catch-up Strategies, But Limitations Now
 Rapid Transformation from Imitation to Innovation
 Fusion with Information Technologies for Up-grading
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IV. KFS for Industrial Innovation
 From Fast Follower to Innovation Leader
 Total R&D Investment (~3.7% of GDP)
 Private Sectors : 71.1%, Government : 28.9%
 Difficult Paradigm Shift
Catch-up
Front Runner
as
by
Fast Follower
Creativity
 Gradual Erosion of Competitiveness in Industry
 How to improve R&D productivity
 R&D management & MOT
 R&D globalization & cooperation
 Bridging the Valley of Death for Commercialization
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V. Implication for Kazakhstan
 Industrial Innovation is Critical for Economic Growth
 Science and Technology are Backbone for Innovation
 S&T is High Return on Investment for Nation
 Korea Case Proves Power of Industrial Innovation
for Knowledge Economy Build-up
 National Economic Plan is Crucial & Important
 Need Sustainable R&D Investment for Many years
 Active Industry-University-Government Cooperation
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V. Implication for Kazakhstan
 Industry
- Lead Industrial Innovation by R&BD
- Leverage own Natural Resources
- Expand Absorptive Capacity asap
 University and GRIs
- Educate top-notch S&T people
- Lead R&D for cooperation programs
- Attract foreign talents in S&T areas
 Government
- Establish National Innovation system
- Facilitate Industrial Innovation
- Long term commitment for Innovation
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VI. Future Cooperation
Global Economy in Rapidly Changing Environment
 Globalization and Speed: Internet and One Village
 Rapid Economic Growth of Emerging Nations
 Korean Experiences in Industrial Innovation can be
beneficial for other nations
 Limitation on Natural Resources: Oil & Materials
 Energy, Environment, Water and Sustainability
 Aging Society and Healthcare for Quality of Life
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VI. Future Cooperation
Possible Programs to Explore

Each Nation’s GRIs Joint Workshop to Identify Priority

GRIs as Innovation Hub for Global Cooperation for Industry,
Academia, GRIs among Nations

Environment & Energy Programs as Common Interest
(Ex. Alternative Energies and Energy Recycling)
 Korea ODA and KSP (Knowledge Sharing Program)

Strengthening Competitiveness of SMEs by Cooperation
(Ex. KITECH’s Root Industries Programs)
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VII. Concluding Remarks
To Save the Earth and Future Generations
 Science and Technology for our Future
 Innovation as New Growth Engine Creation
 Networking and Innovation in Asia & the World
 Cooperation among R&D Communities
 Open Innovation for R&D Productivity
 Firm National Innovation System for Kazakhstan
 Sharing Best Practices between Kazakhstan & Korea
 Bright Future by Industrial Innovation in the 21st Century
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K - Knowledge
Openness
O
Research
R
E
A
- Entrepreneurship
- Actions
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Key H. Kim, Ph. D.
AICT, SNU
E-mail: keykim@snu.ac.kr
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