S&T for Development: Experience of South Korea

1. November 2004 S&T for Development: Experience of South Korea Technology and Management Graduate Program Won-Young Lee email: wyoung@snu.ac.kr Seoul National University

2. Some Preliminary Concepts

3. National Innovation System Technological Paradigm Market Mechanism Social Institution

4. Role of Government Tax Incentives, Financial Incentives IP Protection Promoter gov User Producer Governmental R&D Public Research Institutes Procurement Pacer Standards and Testing Innovation Friendly Regulation Institutional Reform for new Technological Paradigm Industrial Policy

5. 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

6. From Imitation to Innovation: Experience of Korea Since 1960’s

7. 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

8. 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

9. Major economic indicators

10. Major R&D Statistics

11. Evolution of R&D System unit: %

12. Imitation Stage Pony: The First Model Exported to North America by Hyundai in 1976

13. Innovation Strategy of the Imitation Stage Demand Pull Industrial Targeting Diffusion-Oriented S&T Need-Initiated R&D International Networking and Outsourcing Government-Private Partnership Outward-looking Industrialization Apprenticeship Pattern of Innovation Chaebuls General Trading Companies S&T Infrastructure Building Government-Funded Research Institutes Technology Diffusion Institutes Daeduck Science Park

14. KIST Model Manpower Industry Induce Scientist Engineers abroad Attract High Quality Students in S&T area S&T pool Manpower Pool Contract Research KIST Model for Contract research Introduction of Modern R&D Awareness of S&T Social Respect for Scientists and Engineers Society Innovation Management

15. 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

16. 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

17. 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

18. Internalization/Generating Stage Camera Phone Made by Samsung

19. 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

20. 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 R&D Programs • Technology Targeting • Big Science

21. Vitalization of Research in Universities What happened ? Improvement Little Improvement 1. Quality of R&D 2 University-Industry Cooperation 2. Ability to adjust changing environment 3. Competition among universities 1. Quantity of R&D 2. R&D management 3. Competition among professors What needs be done in the future ? Government Initiated Change Self-Motivated Change Emphasis on Hardware Emphasis on Software

22. 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 • 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

23. CDMA Technology Development Qualcom ETRI CDMA Equipment Producers Network Providers Ministry of Information and Communication Basic Research Guide Industry Cooperation Procurement

24. National R&D programs basic and generic research applied R&D Long-term Large scale HAN(G7) Project goal-oriented Creative Research Initiatives researcher-oriented Strategic, Initiative Industrial Technology Program diffusion-oriented Basic Research Program infra-oriented Short-term Small scale Infrastructure, Need-satisfaction

25. 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)

26. Recommendations

27. Need-Oriented Approach International Outsourcing Manpower Contract Research Industry Needs Technical Consultancy Governmental Assistance Testing

28. Systematic Approach Supply of Manpower Legal and Institutional Reform Management System Industrial Center Related Service International Networks Modern facility and Equipments

29. 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