Technology transfer in bilateral program and lessons learned: The Case of Korea

1. Technology transfer in bilateral program and lessons learned:The Case of Korea KEMCO, April, 2002 Seoul, Korea Dr. Suk-hoon Woo

2. 1. Technology transfer or cooperation? • Technology is a good that can be transferred? • Globalization makes the technological competitiveness as a primary factor in world economy system. • Public funding replaces the direct subsidy of each countries’ national economic policy • more R&D expenditure, but the result of research is considered as national strategy factor.

3. Network effect of technology • A combination of units of technology is “one system of technology. • Path dependency of investments already made. • Choice of one technology is not just a choice of one unit, but a choice of future system • ex) natural gas pipe-line network, electrification and grid network

4. Transfer activities are multiple and complex • Joint research, FDI, joint-venture, consortium can be used as a implementation tools of technological cooperation. • Public program for demonstration project can be understood as a principal scheme for the technology transfer under UNFCCC • role of government and public sector

5. 2. Criteria for needs assessment • Market potential : the technology near to commercialization (pre-commercialization stage, pre-standardization stage) • Public oriented technology • Trigger-effect to create a new markets with advanced technology • Technology includes “know-how” of soft technologies like energy management

6. 3. Selected technologies • ESCO(Energy Service Company) and energy management system • Methane capture and reuse in waste land-fill site • Heat recovery, including heat-pump

7. 4. ESCO Experiences • Process • Circulation of proposals for the national stake-holders (1999) - phase 1 • Selection of the ESCOs and potential projects • Hyundai Motor Ulsan Factory was selected for the demonstration projects • Co-auditing : Korean ESCO and US partner • Project identification

8. Technology Transfer Scheme Hyundai Motors : site Energy auditing and ESCO EPS Korea Sempra Recipient Provider Technical support KEMCO NREL MOU for TCAPP-Korea Korea side US Side

9. Barriers • Funding : who will pay for the initial survey? • Sempra, EPS Korea, Hyundai Motors, or KEMCO/NREL? • Technological system : the difference of regulation of environment related to the painting process (ex. Treatment of VOCs) • ESCO market structure : difference of auditing tools and system

10. Limited success in Hyundai ESCO projects • success • Technology transfer throughout a experience of auditing • Detailed auditing report and project identification - heat recovery process in painting process • Failure • EPS Korea has been bankrupted - external cause • Difference of funding system for ESCO project • public funding (Korea) versus private funding (US) • Hedging for the exchange rate

11. 5. Lessons learned • Technology transfer must be considered in the context of national strategy, including specific circumstances and development stages. • Experience matters : technology it-self is a kind of evolutionary process, not just a good. • History matters : path dependency, network effect must be considered.