R&d

Promoting R&D in EcuadorU-I-R Collaboration and

Supportive Instruments for R&D

Hosaeng Rhee & Yoocheul SongFernando Rosero (SENESCYT)

Center for International Economic Studies

1. Introduction

2. Ecuador’s current status: NIS and incentive measures for R&D1) R&D competitiveness of Ecuador2) National Innovation System of Ecuador3) U-I-R R&D collaboration in Ecuador4) R&D incentive system in Ecuador5) Priorities in resolving the problems and bottlenecks

3. Korea’s experiences: U-I -R collaboration and non-tax/subsidy measures

Contents

2

3. Korea’s experiences: U-I -R collaboration and non-tax/subsidy measures1) Economic Development and the role of S&T in Korea2) U-I-R R&D collaboration in Korea: How to facilitate communication and cooperation?3) Other instruments to promote R&D in Korea with a focus on non-tax/subsidy measures

4. Implications and policy suggestions1) Implications of the Korean experiences2) Policy suggestions

1. Introduction

� Why innovation?

� NIS: What do we need for R&D promotion?

� Snapshots: Ecuador and Korea, where have we been?

� Ecuador is up to …� Ecuador is up to …

� Focus of the KSP Ecuador 2012 on R&D

3

• Innovation: technologies or practices that are new to a given society (World Bank 2010)

- Technologies or practices that are being diffused in that economy or society- Dissemination and use important

• Why promote innovation?- Main source of economic growth- Improve productivity

1. Introduction

Why innovation?

- Improve productivity- Foundation of competitiveness� Generates positive externalitiesand improves welfare � Government interventions are needed to promote R&D.

• Innovation capabilities important for both developed and developing countries- Developing ones: need ways to achieve broadly inclusivegrowth and innovation to benefit

their many poor and not simply a narrow elite

4

How Innovation Contributes to Growth: A Comparison of Ghana and the Republic of Korea, 1960–2005

1. Introduction

Why innovation?

5

Source: World Bank (2010), Innovation Policy: A Guide for Developing CountriesWorld Bank (2007), Building Knowledge Economies: Advanced Strategies for Development.

Note: TFP = total factor productivity

Global S&T Environment

Research

Government

National Innovation System

National innovation system: What do we need for R&D promotion?

� Human and Institutional Capabilities and Capacities of Each Actor (universities, industries, research institutes) of the NIS to carry out R&D related activities, need to be secured and enhanced.

Collaboration among major actors of the

1. Introduction

Universities

FinancialInstitutions

ResearchInstitutes

Other related Actors

Industries

� Collaboration among major actors of the NIS needs to be promoted to facilitate generation, transfer and commercialization of new technologies

� Financial institutions’ active role needs to be encouraged to help promising R&Ds with financial resources for development and commercialization of new technologies.

6

• Government can facilitate the articulation and implementation of innovative initiatives, since innovators need basic technical, financial, and other support.

• Government can reduce obstacles to innovation in regulatory and legal frameworks.

� Government as a gardener Components of National S&T Policy

LegalFramework

1. Introduction


• Government-sponsored research and development (R&D) structures can respond to the needs and demands of surrounding communities.

• The educational system can help form a receptive and creative population.

� Need a governance system of S&T polices

S&TPromotion

Organizations

PolicyPrograms

7

U-I-R R&D collaboration, what & why?

What?Purpose Collaboration Activities

R&D Joint research, commissioned research, dispatched research, invited research

Training & EducationAccreditation for engineering education, student-specific education, student OJT & intern, employee retraining, scholarship for employee

Technology Transfer & Production Support

Technology transfer between university and institute, breaking technological bottlenecks in the industry field, sharing research facilities, operating

1. Introduction


The U-I-R relation plays a critical role in making R&D investment effective as well as efficient.• Each actor’s limited knowledge and resources

- More resources required to produce globally competitive products- Traditional in-house R&D is not enough often

• Open and collaborative innovation is more effective than closed ones. - Cost of innovation cheaper and innovation process often quicker with collaboration- Quality of innovation often diverse and better with collaboration

• Collaboration with global players often ensures cross licensing and global standard setting

Why? � related to the purpose and barriers of UIR collaboration

Technology Transfer & Production Support

bottlenecks in the industry field, sharing research facilities, operating incubating center

Personal Exchange Networking & exchange among researchers, holding joint seminars

8

BarriersFundamental barriers coming from the differences of information, financial and human resources, S&T knowledge and capability.

- Industry: relatively enough financial and human resources, not enough creative ideas- University: recent knowledge, not enough field knowledge.

� Need to have coordinators who understands all three sides of U-I-R to promote UIR collaboration

1. Introduction

U-I-R R&D collaboration, what & why?


Source: Baik and Cho (2008), “Developing a new model for cooperation among SMEs, Universities and Research institutes”

Success factors Essential elements

Mutual benefit- Actors’ capabilities and screening- Continuous monitoring and information accumulation

Communication- Density and cost-effectiveness of communication- Design and implementation of an effective way of communicating

Coordinator- Vision provider and coordinating organizations- Coordinator’s expertise and incentives

Binding contract- Agreement on how to share gains- Monitoring system to control opportunistic behavior

Ongoing relationship- Spatial proximity (Cluster)- Compatibility of interests

Success factors

9

GERD/GDP ratio in Latin America, 2007 (%)

Snapshots: Ecuador and Korea, where have we been?

1. Introduction

Source: UNESCO Science Report 2010

10

GERD by source of fund (%)

2002 2007

Businessenterprise

GovernmentHigher

education Private

non-profitAbroad

Notspecified

Businessenterprise

GovernmentHigher

education Private

non-profitAbroad

Notspecified

Korea 72.2 25.4 1.6 0.4 0.4 73.7 24.8 1.0 0.3 0.2

Japan 74.1 18.4 6.5 0.7 0.4 77.7 15.6 5.6 0.7 0.3

GERD by source of fund, 2002 and 2007

1. Introduction



Germany 65.5 31.6 0.5 2.4 67.9 27.7 0.4 4.0

US 65.2 29.1 2.7 3.0 67.3 27.0 2.7 3.0

Brazil 45.0 53.3 1.7 44.7 52.9 2.4

Russia 33.1 58.4 0.3 0.1 8.0 28.7 64.7 0.5 0.2 5.9

India 19.3 76.5 4.1 29.6 66.0 4.4

China 60.1 29.9 1.9 8.0 70.4 24.6 1.3 3.7

Vietnam 18.1 74.1 0.7 6.3 0.8

Indonesia 14.7 84.5 0.2 0.7

Ecuador 17.4 69.3 4.0 1.2 4.2 4.0 21.5 58.1 3.9 3.3 7.0 6.2

Colombia 29.1 22.5 39.3 1.9 7.2 27.2 37.7 25.6 5.4 4.1

Chile 33.2 54.6 0.4 0.3 11.3 45.8 44.4 0.8 0.3 8.7

11

GERD by performing sector, 2002 and 2007

GERD by performing sector (%)

2002 2007

Businessenterprise

Government Higher

education Private

non-profitBusiness enterprise

Government Higher

education Private

non-profitNot

specified

Korea 74.9 13.4 10.4 1.3 76.2 11.7 10.7 1.5

Japan 74.4 9.5 13.9 2.1 77.9 7.8 12.6 1.7

Germany 69.2 13.7 17.0 70.0 13.9 16.1

1. Introduction



Germany 69.2 13.7 17.0 70.0 13.9 16.1

US 70.0 12.1 13.4 4.5 72.6 10.6 12.9 3.9

Brazil 40.0 20.6 38.9 0.1 40.2 21.3 38.4 0.1

Russia 69.9 24.5 5.4 0.2 62.9 30.1 6.7 0.3

India 19.3 76.5 4.1 29.6 66.0 4.4

China 61.2 28.7 10.1 72.3 19.2 8.5

Vietnam 14.5 66.4 17.9 1.1

Indonesia 14.3 81.1 4.6 3.7 96.2

Ecuador 11.4 33.5 11.4 43.7 21.5 58.1 3.9 3.3 13.2

Colombia 25.8 3.0 53.1 18.0 22.7 5.7 52.4 19.3

Chile 35.8 11.0 38.8 14.3 46.2 10.2 32.0 11.6

Peru 10.7 31.7 47.7 11.4 29.2 25.6 38.1 7.1

12

Gross Expenditure on Research and Development in Korea, 1964-2004

80

Ecuador’sPrivateshare

1. Introduction


Source: Ministry of Science and Technology

0.25 Ecuador’sGERD/GDP

13

• Transformation of production matrix:

� Export of low value-added, primary commodities � High value-added and quality, energy efficient and environment friendly

production and products, high quality employments

� Need technological innovations

• Inclusive development :

Ecuador is up to …

1. Introduction

• Inclusive development :

� Need for mechanism to encourage MSMEs’ to develop and commercialize technologies- Incubating innovative entrepreneurs- Assisting MSMEs’ innovation and commercialization activities

• Yachay� typical form of U-I-R collaboration = high-level universities + research centers + companies

� How to induce Yachay to carry out innovative activities for transformation of production matrix?

14

The Ecuadorian government’s request for the KSP Ecuador 2012:

• U-I-R R&D collaboration mechanism to facilitate communication and cooperation among the major actors of the NIS

• Non-tax/subsidy measuresto promote R&D

Focus of the KSP Ecuador 2012 on R&D

1. Introduction

� Diagnosis of Ecuador’s NIS: Current status and bottlenecks

� U-I-R R&D collaboration system: How to facilitate communication and cooperation among actors of the NIS

� Incentive measures to spur R&D: With a focus on non-tax/subsidy instruments (measures or institutions)

� Implications and policy suggestions

15

Fernando Rosero (SENESCYT)

� R&D competitiveness of Ecuador

� National Innovation System of Ecuador: Current status and bottlenecks

2. Ecuador’s current statusNational Innovation System and Incentive Measures for R&D

16

� U-I-R R&D collaboration in Ecuador: Current status and bottlenecks

� R&D incentive system in Ecuador:Current status and bottlenecks

� Priorities in resolving the problems and bottlenecks

• Ecuador is performing low regarding factual results based on R&D

High Tech exports / manufacture exports,

(%) 2009

2. Ecuador’s current status

(1) R&D competitiveness of Ecuador

R&D investment as % of GDP, 2007Source: CEPAL 2010x

17

Global investment in R&D in absolute and relative terms, 2002 - UNESCO

Japan

France

4000

5000

6000

pe

r m

illi

on

po

pu

lati

on

• Compared to other countries, Ecuador´s GERD and number of researches is modest.



GERD: Gross Expenditure on Research and DevelopmentSource: UNESCO Science Report 2010

Korea

ChinaBrazil

Russia

IndiaVietnam

Indonesia

GermanyFrance

Ecuador

Colombia Chile

Peru0

1000

2000

3000

0 0,5 1 1,5 2 2,5 3 3,5 4

Re

sea

rch

ers

pe

r m

illi

on

po

pu

lati

on

GERD as % of GDP(2002)

18

Korea

Japan

GermanyFrance

4000

5000

6000

Re

sea

rch

ers

pe

r m

illi

on

po

pu

lati

on

Global investment in R&D in absolute and relative terms, 2007 - UNESCO

• Compared to other countries, Ecuador´s GERD and number of researches is modest.



Source: UNESCO Science Report 2010* Vietnam: 2002, Indonesia: 2002/2005, Chile: 2002/2005

China

Brazil

Russia

IndiaVietnam

Indonesia

Germany

Ecuador

Colombia Chile

Peru0

1000

2000

3000

0 0,5 1 1,5 2 2,5 3 3,5 4

Re

sea

rch

ers

pe

r m

illi

on

po

pu

lati

on

GERD as % of GDP(2007)

19

• Ecuador contribution to regional R&D investment as of 2008 was only 0.54% of total.

Latin America and the Caribbean R&D Investment (In US$ Million)

2006 2008 2009

Argentina 1.059,8 1.721,0 1.846,5

Brazil 10.978,8 18.390,6 18.929,2

Colombia 230,3 344,4 361,9



Source: Source: RICYT, http://www.ricyt.org

Colombia 230,3 344,4 361,9

Costa Rica 97,0 118,8 159,1

ECUADOR 60,8 140,7 n.a.

México 3.601,3 3.837,1 3.485,3

Latin America and

Caribbean17.208,9 26.027,3 26.907,9

20

• Ecuador´s GERD as percentage of GDP (2008) is 0.25%: about two and half times below the regional average of 0.65%

2,5

3

3,5

4



Source: RICYT, http://www.ricyt.org

0

0,5

1

1,5

2

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Ecuador Brazil Middle income Korea, Rep.

Source: World Bank Database

21

2,00

3,00

4,00

5,00

6,00

Innovation

Brazil

Ecuador

• Ecuador´s R&D influencing factors are low. Showing a slightly increase during 2012.



Innovation index of the Global Competitiveness Report : WEF

0,00

1,00 Technological

readiness

High education

and training

Business

sophistication

Ecuador

Japan

Korea.Rep

Vietnam

22

4

6

8

10

Total Expenditure for

R&D as % of GDP, 2008

Private Sector Spending

on R&D (1-7), 2010

Science and Engineering

Enrolment Ratio

Patents Granted by

USPTO / Mil. People, avg

High-Tech Exports as % of

Manuf. Exports, 2009

Ecuador

• Ecuador´s R&D influencing factors are low. Showing a slightly increase during 2012.



0

2

4 Enrolment Ratio

(%), 2009

Researchers in R&D / Mil.

People, 2009

University-Company

Research Collaboration (1-

7), 2010

Firm-Level Technology

Absorption (1-7), 2010

Royalty and License Fees

Receipts (US$/pop.), 2009

Royalty Payments and

receipts(US$/pop.) 2009

S&E Journal Articles /

Mil. People, 2007

USPTO / Mil. People, avg

2005-2009 Korea, Rep.

Brazil

Malaysia

Innovation indicators in the KAM (Knowledge Assessment Methodology): World Bank

23

(2) National Innovation System of Ecuador

Historically Ecuador shows isolated efforts generated by national institutions such as academia, private enterprises and government looking to launching a national innovation system.

Government

• Starting 2008, a larger and better government allocation of R&D funds and initiatives: Long term impacts.


Long term impacts.

• SENESCYT developed the National Research Policy developed in 2012: big changed yet… results to come. � next page

• Only by 2012 government is joining state efforts to invigorate R&D toward a change in national productive matrix.

• Government has not found a way for strong linkages between Academia-Government and Industries.

24

A. Restructure the National Research System

1.1 Restructure management models of Public Research Institutes1.2 Recovering scientific production capacity of actors of CTIS System1.3 Creation of the National System of Researchers

B. Foster integration of National Research System actors

National Research Policy developed by SENESCYT



2.1 International recognition of researches with empowerment of researchers.2.2 Encouragement and recognition of Intersectoral Network of Science and Technology

C. Promoting Scientific research focused on productive matrix change

3.1 Funding of programs and projects for selective import substitution3.2 Funding of scientific researches to generate value-added products to diversify exports3.3 Funding of researches that allow optimize access, coverage and quality of services and

improve decision making in the context of risk management.3.4 Development of Basic Researches in strategic areas as a central focus of research.3.5 Development of Social Science Researches with emphasis in History, History of Culture

and Arts as a tool for knowledge dialogue.

25

Universities

• During 2008, only 1,187 university professors (3.6% of total) included research activities on their working schedule (CONEA, 2009)

• 2012: radical changes in the Ecuadorian university system: 14 out of 67 universities were stepped out. They didn´t meet basic R&D requirements.

• Universities have autonomy to operate and to partner. However, they have to spend at least 6% of its budget to fostering own R&D capacities.



at least 6% of its budget to fostering own R&D capacities.• Traditionally, funding research projects at small scale.

• Universities working at low to none degree linked to industries.

Industries

• Private companies showed a “low to none support of innovation activities with the exceptions of petroleum and the shrimp and food industry.” (Ponce, 2011)

• Only 3,124 out of 500,000+ Ecuadorian enterprises invested in R&D during year 2009, totaling US$ 231.65 million. (Source: INEC)

• Industries require to define efforts: Basic R&D or applied R&D.• SMS industries struggle powering R&D: Finance and cultural reasons.

26

Research Centers

• Starting 2011 key changes (budget allocation and management) in public research centers focused on foster R&D.

• Activities of 11 Public RC reorganized in 2012: research lines re-defined in order to meet national goals.

• No formal tracking of private RC activities / outcomes

• Public Research Centers used to work at low to none degree linked to local



• Public Research Centers used to work at low to none degree linked to local industries.

Other institutions?

• Financial institutions, other promotion organizations ….

S&T Policy governance?

27

Final Ideas

• SMB put low efforts on R&D: - Their products requires low innovation; - National market is price-oriented more than quality-oriented; - Culturally SMB don’t leverage on their peers in order to improve their products.

• Ecuador don’t have priorities to bring up technological demands: Government promotes changing the productive matrix, however, still doesn’t determines what intensity (High-medium-low) and



28

the productive matrix, however, still doesn’t determines what intensity (High-medium-low) and which sectors (besides traditional ones).� There are some hints on which sectors the Government wants to bet

(petrochemical, nanotechnology, etc), yet, there’s no evidence on which sector the private sector would like to consider. That could be dangerous since national efforts can take different paths.

• Since 92% of private R&D investment is made by large enterprises, the main target of Ecuador’s innovation policy should be Small and Medium size business (Micro are too little to invest)

• It seems natural that transfer of technology will come to Ecuador as imitation or internalization of foreign technologies more than generating new tech � R&D investment shows low levels.

(3) U-I-R R&D collaboration in Ecuador

• Scarce R&D process demand from companies toward academia and vice versa.

• Partnering with academia does not come naturally to Ecuadorian companies. Even more, just a few large companies have developed their own research centers.

• Industries: Restricted fund allocation toward R&D.


• Limited qualified human resources in R&D � 0.46 researchers per every thousand of economically active population. (Source: RICYT)

29

Problems that delay promotion of U-I-R R&D collaboration

Low added value in goods and services produced � NEED of R&D to improve products.

• Need to strength essential capabilities of each R&D actor

• Define Ecuadors level of technology to develop: per industry, per actor.


(3) U-I-R R&D collaboration in Ecuador

• Define Ecuadors level of technology to develop: per industry, per actor.

• R&D developed by academia guided by different motivators than those of companies. Advances not linked to industrial needs.

• Environment not suited to scientific and technology entrepreneurs.

• Lack of mechanisms (concrete/efficient) to make actors work together- No communication tools among players of national R&D system: They don´t know each

other.

• Lack of legal framework supporting and promoting R&D activities.

• Low leverage of national networking capacities and international network assistances.

30

(4) R&D incentive system in Ecuador

• No financial (Venture Capital, Tax exemptions) or non-financial (Public recognition, etc.) solid incentives for U-I-R to strongly engage in R&D.

• National finance system does not support R&D initiatives: solutions focused to regular financial customers.

• Ministry of Industries have support SMEs activities specially focused on development more than in research.Initiatives supported quality and manufacturing


development more than in research.Initiatives supported quality and manufacturing process.

31

(5) Priorities in resolving the problems and bottlenecks

• Ecuador shows a lack of information/data regarding R&D including key element when allocating resources, defining policies and assessing impacts. � Survey on innovation

• Create legal framework to foster and engage R&D activities: Governance for R&D system.

• Strengthen each R&D actors capabilities (Within / Among).

• Find ways to generate linkage between different players of Ecuadorian innovation system.


• Find ways to generate linkage between different players of Ecuadorian innovation system. � Government still looking to build a National System that encompasses all potential actors.

• Create effective mechanisms to put actors working together in R&D initiatives.

• Develop strong instruments to increase low national R&D level.

• Need to have a national focus on which technology to develop: High, Medium, Low Tech.

32

� Economic development and the role of S&T in Korea• Increase in technology intensity• Statistics on Korea’s R&D• Development strategies and S&T policies – Characteristics

� U-I-R R&D collaboration in Korea: How to facilitate communication and cooperation? • Evolution of U-I-R R&D collaboration in Korea• Mechanisms to facilitate U-I-R communication and cooperation

3. Korea’s experiencesU-I-R collaboration and non-tax/subsidy measures

• Mechanisms to facilitate U-I-R communication and cooperation

� Other instruments to promote R&D in Korea: focus on non-tax/subsidy measures• Chronology of major policies – Characteristics • Non-tax/subsidy measures: Technology Certification, Demand-based support, Guarantee

33

Top 10 Leading Industries in Korea’s Manufacturing Sectors

1970s 1980s 1990s 2000s

1 Food & beverage 28.6 Textile & apparel 19.2 E&E products 14.6 E&E products 25.2

2 Textile & apparel 20.4 Food & beverage 19.0 Automobile 13.2 Chemicals 13.9

3 Chemicals 11.5 Chemicals 13.1 Food & beverage 12.9 Automobile 11.3

Automobile 9.1 E&E products 10.4 Chemicals 12.9 Basic metal 8.0

More technology intensive

Increase in technology intensity

(1) Economic development and S&T in Korea

3. Korea’s experiences

4 Automobile 9.1 E&E products 10.4 Chemicals 12.9 Basic metal 8.0

5 Paper & printing 5.5 Basic metal 6.7 Textile & apparel 11.5 Food & beverage 6.9

6 Non-metallicmineral products 5.3 Automobile 6.1 Basic metal 9.0 Machinery 6.9

7 Coal & petroleumrefinery mineral 4.2 Coal & petroleum

refinery 5.5 Non-metallicproducts 5.6 Textile & apparel 6.9

8 E&E productsmineral products 3.7 Non-metallic 5.3 Machinery 5.5 Fabricated

metal products 4.8

9 Machinery 2.3 Paper & printing 3.9 Paper & printing 4.6 Paper & printing 4.3

10 Basic metalmetal products 1.5 Machinery 3.7 Fabricated 3.8 Coal & petroleum

refinery 4.2

All manufacturing(% of GDP) 21.2 All manufacturing

(% of GDP) 28.2 All manufacturing(% of GDP) 28.8 All manufacturing

(% of GDP) 29.4

Source: Bank of Korea, National Accounts and Statistical Yearbook, various issues.Note: Shares are of manufacturing value-added total. E&E = electrical and electronics.

34

Korea’s Top 10 Exports: Evidence on Industrial Upgrading

1960s 1970s 1980s 1990s 2000s

1 Iron Ore Textiles Textiles Electronics Semiconductors

2 Tungsten Ore Plywood Electronics Textiles Computers

3 Raw Silk Wigs Iron and Steel Products Footwear Automobiles

More technology intensive




Products

4 Anthracite Iron Ore Footwear Iron and Steel Products

PetrochemicalProducts

5 Cuttlefish Electronics Ships Ships Ships

6 Live Fish Fruits and Vegetables Synthetic Fibers Automobiles Wireless

Telecomm equipment

7 Natural Graphite Footwear Metal Products Chemicals Iron and Steel Products

8 Plywood Tobacco Plywood General Machines Textiles Products

9 Rice Iron and Steel Products Fish Plastic Products Textile Fabrics

10 Bristles Metal Products Electrical Goods Containers Electronics Home Appliances

35

Technology-intensive exports in Korea (% of manufactured exports)

30,0

35,0

40,0

Korea, Rep.

Ecuador

(%)




Source: World Bank Database

0,0

5,0

10,0

15,0

20,0

25,0

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Ecuador

Lower middle income

Low income

Upper middle income

* High-technology exports: products with high R&D intensity, such as aerospace, computers, pharmaceuticals, scientific instruments, and electrical machines

36

1965 1970 1975 1980 1985 1990 1995 2000 2003 2006

R&D expenditure 2.1 10.5 42.7 282.5 1,237.1 3,349.9 9,440.6 13,848.5 19,068.7 27,345.7

Government 1.9 9.2 30.3 180 306.8 651 1,780.90 3,451.80 4,663.20 6,632.1

Private Sector 0.2 1.3 12.3 102.5 930.3 1,698.90 7,659.70 10,387.20 14,326.60 20,631.3

Gov’t vs. Private 90:10 88:12 71:29 64:36 25:75 28:72 19:81 25:75 25:75 24:76

University R&D NA 0.4 2.2 25.9 118.8 244.3 770.9 1,561.90 1,932.70 2,721.9

Gov’t Res. Inst. R&D NA 8.9 28.1 104.5 367.2 731 1,766.70 2,032.00 2,626.40 3,497.1

CorporateR&D 0.2 1.3 12.3 81.4 751 2,374.50 6,903.00 10,254.70 14,509.70 21,126.8

Stats on Korea’s R&D



CorporateR&D 0.2 1.3 12.3 81.4 751 2,374.50 6,903.00 10,254.70 14,509.70 21,126.8

R&D/GNP 0.26 0.38 0.42 0.77 1.58 1.95 2.51 2.40 2.63 3.23

Manufacturing Sector R&D NA NA 16.7 76 688.6 2,134.70 5,809.90 8,584.90 12,400.68 19,025.8

Percent of Sales NA NA 0.36 0.50 1.51 1.96 2.72 2.17 2.64 2.88

Number of Researchers 2,135 5,628 10,275 18,434 41,473 70,503 128,315 159,973 198,171 256,598

Gov’t Research Inst. 1,671 2,458 3,086 4,598 7,542 10,434 15,007 13,913 14,395 16,771

Universities 352 2,011 4,534 8,695 14,935 21,332 44,683 51,727 59,746 65,923

Private Sector 112 1,159 2,655 5,141 18,996 38,737 68,625 94,333 124,030 173,904

R&D expenditureper researcher (1,000won)

967 1,874 4,152 15,325 27,853 47,514 73,574 86,568 96,223 120,308

Researcher per10,000 Population

0.7 1.7 2.9 4.8 10.1 16.4 28.6 34 41.4 53.1

Number of Corporate R&D Centers

0 1 12 54 183 966 2,270 7,110 9,810 13,324

* Unit for R&D expenditure ~ Manufacturing Sector R&D: trillion won* Korea’s GDP in 2006: 908 trillion won or 952 billion US$ (current LCU or US$)Source: Ministry of Science and Technology

37

Gross Expenditure on Research and Development in Korea, 1964-2004



Stats on Korea’s R&D

Source: Ministry of Science and Technology

38

Periods Development of the Korean National Innovation System

1960s• Beginning of scientific education• Beginning to build S&T infrastructure

1970s

• Establishment of government-sponsored research institutes• Technical, scientific and further education• Establishment of DaedukScience Town

Development of the Korea’s National Innovation System

Ecuador is trying to



• Establishment of DaedukScience Town• Beginning of industrial R&D

1980s

• Promotion of key technologies through National R&D Program• Activation of industrial R&D• Mass production of high-qualified R&D personnel• Expansion of S&T related ministries

1990s

• Promotion of academic R&D potentials• Expansion of R&D resources and their efficient utilization• Introduction of regional innovation policies• Introduction of National S&T Council (NSTC) system

Source: Chung, S. (2006), Technology and Management

trying to carry out these tasks all together.

39

Developmentgoals

Major policydirections

Science andtechnology (S&T)

Human resourcesdevelopment

1960s

Build a production base for export-oriented industrialization

- Expand export-oriented light industries

- Mobilize domestic and foreign capital

- Build scientificinstitutions’ legal and administrative frameworks

- Decrease illiteracy

- Establish a national infrastructure

Build a self-reliantgrowth base

- Promote heavy and chemical industries

-Set up a scientific infrastructure:

- Increase vocational training

Development strategies and S&T policies: Changes in Government Innovation Policy



1970s

growth base chemical industries

- Build social overhead capital

infrastructure:specialized S&T institutions, DaeduckScience Town

training

- Increase engineering-major college Graduates

1980s

Expand Technology-intensive Industries

- Conduct industrialrationalization

- Decrease export subsidy and expanding import Liberalization

- Promote R&D and private research centers

- Develop national R&D programs

- Expand the higher education system

- Develop semiskilled human resources

1990s

Promote high-tech innovation

- Support technology development

- Build an informationInfrastructure

Promote R&D programs onhighly advanced technologies

- Develop highly skilled human resources instrategic fields: IT, BT etc.

- Develop lifelong learning systems

�� Refer to the Appendix for more explanation.

1962 1966 1967 1971 1981 1982 1987 1991 1992 1997 2004 2008 2011

Institutional BuildingTechnology Catching-up

S&T Leadership




1962 1966 1967 1971 1981 1982 1987 1991 1992 1997 2004 2008 2011

1st 5-YearEconomic Plan

Ministry of S&T(MOST)

Korea Institute of S&T (KIST )

Technology Development Promotion Act

National R&D Program (NRP)

Financial Crisis

Deputy Prime Minister of

MOST (OSTI)

MEST& MKE

StandingNSTC

Source: Jang, Y. (2011), “Evolution of Korean STI Policies”

• Information and Communication R&D Program (ICRP)

• Highly Advanced National Project (HAN)


Development strategies and S&T policies: Governance (late 2000’s)

National S&T Policy &

Coordination

Ministerial S&TPolicies/ Planning

President

NSTC

MKE

MOSF

MEST

PACESTPresidential Council on

Education, S&T

National S&T CommissionMinistry of Strategy and Finance

PB

Otherministries



Note : Pand B denote policy and budget respectively

Policies/ Planning

S&T programs/ planning/ evaluation

Performing S&T program

MKEMEST

NRF R&D mgmtagencies

KRCF ISTK

Universities/ GRIs/Firms

B P

MEST: Ministry of Education, S&TMKE: Ministry of Knowledge and EconomyNRF: National Research FoundationKIAT: Korea Institute for Advancement of TechnologyKEIT: Korea Evaluation Institute of Industrial Technology

Korea Research Council for Industrial S&T

Korea Research Council for Fundamental S&T

P

P

B

B

Otherministries

KIAT/KEIT

• Leading Player for Korean Innovation� Independent non-government organizations with government’s financial supports� Operating under the GRI Laws and civil laws� Conduct about Half of Public R&D Investments� KIST, the First GRI, was established in 1966 with help of USAID� 27 (13 under KRCF & 14 under ISTK) S&T GRIs (as of 2011)

Development strategies and S&T policies: GRIs



43

� 27 (13 under KRCF & 14 under ISTK) S&T GRIs (as of 2011)

• Role Shifting� Absorbing & Internalizing imported foreign technology (1970s)� Modifying imported technology/ Developing domestic technology (1980s)� Advancing catching-up technology (1990s)� Focusing on Endogenous Technology (2000s~ )� Major Function: Providing Needed Technology to Industries

Source: Jang, Y. (2012), “Korean STI Strategies for National Development”, Presentation for the Ecuadorian Delegates


1945 1960 1970 1980 1990 20001966

KIGAM1948

KIST1966 KRIBB

1985KITECH

1989KISTI1991




KAERI1959

KICT1962

KORDI1973

KFRI1976

1985 1989 1991

KIOM1994

KBSI1988

KOPRI1987

ETRI1976

KIT1982

KRRI1996

NFRI1996

NTMS2005

KRICT1976

KIMM1976

KIER1977

KRISS1975

KASI1974

KFRI1987

KARI1989

WKIMCHI2010

KIMS2007

Source: Jang, Y. (2012)�� Refer to the Appendix for more explanation.

National R&D Program by Stages

Formation stage (1982-84) Take-off stage (1985-1990) Maturing stage (1991 ~ )

Objective Internalization ofForeign technologies

Development ofCore technologies

Creative researchFuture-oriented research

Planning No planning: Bottom-up Based on loose Long -term plan R&D planningTechnology foresight

Main actors Government R&DInstitutes (GRI)

Main: GRIMinor: Universities

Main: GRI, with increased role of

Development strategies and S&T policies -NRDP



Korea’s Industrial Technology Policy: 80% of Government’s total R&D budget spent on NRDP National R&D

ProgramsInfrastructure & Diffusion

Institutional Support

Incentives

Objectives To develop generic industrial technologies

To enhance intermediary functions and to fill the gap among innovation actors

To nurture GRI and to strengthen GRI’s research capabilities

To induce/assist private enterprises’ technology development activities

Tools Ministries’ R&D programs

- Research personnel - Technical information- Coop. R&D facilities - Regional R&D centers etc

Funding for GRI’s operational expenses and own research projects

- Tax-exemption- Financial support - Subsidy for technology

development

Effects On Industry

To expand knowledge/technology pool for industrial use

To facilitate diffusion and to make better industry’s use of technologies

To bring up helper/partner for industry’s technology development

To strengthen industry’s own technological capabilities

Institutes (GRI) Minor: Universitiesand Industries

with increased role ofuniversities and industries

Source: Ministry of Science and Technology(1997), Thirty Year History of Science and Technology, Republic of Korea

Source: KDI(2009), Models for National Technology and Innovation Capacity Development in Turkey45

S&T HRD Policy in Korea

1960s 1970s 1980s 1990s 2000s

Policy Paradigm Duplicative Imitation Creative Imitation Innovation

Goal of

Nurturing technicians

Nurturing engineers for heavy & chemical

Nurturing highly qualified engineers

Nurturing world-class scientists and

Nurturing creative scientists for frontier

Development strategies and S&T policies –S&T HRD



of S&T HRD

Policy

technicians for light industries

for heavy & chemicalIndustries

qualified engineers for technology-intensive industries

scientists and engineers for frontier industries

scientists for frontier industries

Policy Measures

of S&T HRD

Policy

• Organized mid & long-term plans and laws for HR

• Established “Technical High School System”

• Established “The Science and Technology Agency”

• Established government research institutes

• Attracted highly qualified Korean scientists & engineers from foreign countries

• Established S&T research-oriented university

• Funded highly qualified students for studying overseas

• Strengthened cooperation between industry, academy and GRI

• Supported for world class professors

• Scholarship to students in master and doctoral degrees

• Systemized S&T gifted student education

• Fostered woman S&T human resources

• Supported whole career paths of S&T human resources

KDI(2012), Strengthening Uzbekistan's National Innovation System

46

Development strategies and S&T policies – Characteristics

• Imitation � Internalization � Generation,Low-tech � High-tech stage by stage

• S&T HRD policies’ focus moved from craftsmen to technician and then to engineers in line with each stage of economic development



• Very active role of the Government Research Institutes to meet the technological needs of the industries

• At the early stage, focus on industrial and applied R&Ds

• As universities’ R&D capabilities improved, university-industry collaboration became active for incubation of technology holders and small businesses.

• The National R&D Programs have played a very influential role in internalizing foreign technologies, developing core and frontier technologies.

•

47

� Evolution of U-I-R R&D collaboration in Korea

� Mechanisms/measures to facilitate U-I-R collaboration: • Categories of the Government Policies• Communication facilitation mechanisms/measures


(2) U-I-R R&D collaboration in Korea

48

Characteristics Main contents

1960s Starting to develop industrial HR

• Focus on policies for nurturing manpower such as security of scientific technical manpower, enhancement of skill level of workers, security of skilled manpower etc

• Enactment of the ‘Act for Promotion of Industrial Education, ’the ‘Engineer Act,’ the ‘Vocational Training Act’ etc

1970s Building up capacities of major actors of the NIS

• Conversion of role of KIST as the core main agent of joint R&D• Enactment of the Technology Development Promotion Act for acceleration of development of Korea’s own technologies

Evolution of U-I-R R&D collaboration in Korea



NIS development of Korea’s own technologies- Establishment of the 5 major government-supported research institutions and so on

1980s Full-scale progress of U-I-R collaboration led by the government

• Full-scale support through the national R&D business• Construction of the foundation for strengthening of U-I-R collaboration• Enactment of the Act for Nurturing Industrial Technical Research Union for the support of cooperative research

1990s Government-led promotion of U-I-R R&D

• Independent and dispersive promotion of national R&Ds by each department• Promotion of construction of regional foundation• Establishment of Techno Park, regional cooperative research centers etc

2000s Vitalization of university-industry cooperation

• Designation and expansion of U-I cooperation universities• Acceleration of commercialization of R&D and strengthening of Technology Business Incubator function of colleges

• Enactment of the Science Technology Basic Act, the Act for Acceleration of Technology Transfer, the Patent Act, the Act for Acceleration of Industrial-educational Education and Cooperation, the Basic Act for Development of Human Resources etc

Source: KDI(2012), Technical Engineering Education Model of Korea Polytech University(KPU) 49

• U-I-R R&D clusters� Daedeok Innopolis, Gwanggyo Technovalley, Pangyo Technovalley, Ansan Science Valley etc

• Technology Business Incubator (TBIs) in universities

• The Korea Polytech University’s industrial-education cooperation systemKPU: established in the industrial complex for industrial-educational cooperation



Evolution of U-I-R R&D collaboration in Korea

� KPU: established in the industrial complex for industrial-educational cooperation

- About 90% of the enterprises in the industrial complex where the university is located are SMEs with sales of less than 10 billion won and 50 or fewer employees

- SMEs’ urgent need to develop products, technologies through industrial-educational cooperation

� KPU’s Partner company system: an industrial-educational cooperation system with a unified network

- Professors and students of university and local enterprises participate together� Regional base for partner companies� Support tailored to local industry� Connecting education, research and employment

- Diverse cooperative activities such as organic exchanges of information, joint technical development etc between SMES and the university

50

• University and Industry Cooperation Center (UICC) in universities/colleges� Korean version of Industry Liaison Office (ILO)

� Technology Licensing Office under the UICC for technology transfer and commercialization

Communication facilitation mechanisms in Korea

Coordinating institutions



Mechanisms/measures to facilitate U-I-R collaboration

� Technology Licensing Office under the UICC for technology transfer and commercialization

• Technology Business Incubators (TBIs)in universities/colleges and industrial complexes� Improving the survival rate of new enterprises that can provide more employment opportunies

� Assisting micro-small and small enterprises with technological capabilities to develop technologies and products right before and after start of business

� Transfer or commercialization of technologies developed by universities

� Providing in-company training opportunities for students

51

CommercializationPrototypesR&D


Coordinating institutions - Technology Business Incubators (TBIs)




• Technology incubation as well as Business incubation supported by various assistances

• Around 280 TBIs in 2011

• 80% of the TBIs established and run by universities with the rest run by the central government and various municipalities- University TBIs: Financial assistance from the government for construction and operation of the TBI

• Spaces, facilities and equipments provided with preferential terms

• Technical consulting services to resolve difficulties in R&D

• Assistance for grants and preferential loans

• Consulting on management and marketing, provision of market information

Technological, Financial, Managerial AssistanceSharing of facilities and equipments

52

• U-I-R Coordinators

� As a Korean version of the industry relations coordinator

� Identify, develop and maintain external relationships, primarily with companies to further the


Coordinators




� Identify, develop and maintain external relationships, primarily with companies to further the university’s researches; Promote the university’s capabilities, coordinate faculty interactions with companies; Increase the number and/or value of industry research contracts, and assist small businesses

• Technology Coordinators� Technology experts mostly in GRIs as the Technology Coordinators

� Financed by the Korea Research Council for Industrial Science & Technology that administers 13 GRIs on industrial technologies

� SMEs with technological difficulties apply for short and mid-term projects

� Technological experts in the GRIs are assigned to the SMEs selected, and help the SMEs resolve technological difficulties

53

The partner company system by the Korea Polytech University: Main characteristics

University

Partner companiessharing brains and latest equipments

Professors StudentsTailored education

Assistance




latest equipments

Industrial complexes Companies

University - enterprise network

- One tutor professor for each company- Regular meetings of all partner companies reporting theirperformances- Technology Exchange meetings

University � enterprise Cooperation

- Technical guidance and advice: Tutor professor and students’ participation- Sharing of expensive equipments on favorable terms- Provision of information on new technologies through the web system- Employee training courses tailored to the needs of companies- Maintenance education and training of the employed

Businesses � University Cooperation

- Opportunities for students’ field practice in companies:8 credits or more- Field experts invited to lecture as adjunct professors- Partner Companies’ Scholarship- Participation in curriculum improvement through survey

Source: Korea Association of Industry, Academy and Research Institute (2011), No Innovation, No Future 54

categories Outcomes of industrial-educational cooperationNumber of partner companies

• Launch of the partner company system in Feb 2002• 1000 companies in May 2002• About 3,000 companies as of 2011

Business incubation Business incubation for 20 companies through the Technical Business Incubator (2007)

Operation of the courses of industrial technologies for

748 CEOs for 14 terms since 2002

Manpower exchange

46%Technical exchange

Cooperative exchange

29%

2009

The partner company system by the Korea Polytech University: Performances


(2) U-I-R R&D collaboration in KoreaMechanisms/measures to facilitate U-I-R collaboration

industrial technologies for CEOs Education for workers commissioned from businesses

Commissioned education for 539 workers as of 2007

Re-education for workers of businesses

327 workers in 2001; 5,439 in 2002; 2,463 in 2003; 3,301 in 2004; 2,166 in 2005; 2,483 in 2006

Technical development and directions

Support through the research centers in industrial-educational cooperation, cooperative research centers, TRITAS, consortiums of industrial and university etc

Special lectures for CEOs of partner companies

• 9 lectures in 4 departments in 2005• 11 lectures in 4 departments in 2006

Participation as adjunct professors

222 persons, including engineers of enterprises etc

Participation in field practice of students

About 10,000 persons in 7,000 companies

Others Scholarship of partner companies, opening of equipments for experiments and researches etc

exchange25%

3000

4000

5000

6000

7000

2005 2006 2007 2008

Sales of Excellent Partner Companies(109 representative partner companies)

(bil. Won)

Source: KDI(2012), Technical Engineering Education Model of Korea Polytech University(KPU) 55

� History of Tax/subsidy measures to promote R&D

� Examples of non-tax/subsidy measures• Technology certification: NET mark • Demand-based R&D support• Technology guarantee: Kibo Technology Fund

(3) Other instruments to promote R&D in Korea: focus on non-tax/subsidy measures


• Technology guarantee: Kibo Technology Fund

56

History of Tax/Subsidy measures to promote R&D in Korea

Before1970s

1970s 1980s 1990s

73 74 76 77 78 79 81 82 84 86 91 92

R&DInvestmentPromotion

Technology Development Reserve Funds SystemTax credit or special depreciation for investment in

equipment to develop technology and manpower

Duty abatement or exemption on goods for academic research

Tax credit for technology and



Tax credit for technology andmanpower development expensesTax exemption for real estates of

private enterprises’ affiliated research centers

Tax exemption for research devices and samples

Duty abatement or exemption on goods for research

TechnologyTransfer

Promotion

Deduction and exemption of the corporate tax for the foreign investmentaccompanied by technology requisite

Reduction and exemption of tax amounton technology transfer income

Income tax exemption for foreign technologists

TechnologyCommercialization

Promotion

Provisional special consumption taxrate for technology commodities

Reduction and exemption of tax for start-up venture SMEs

Source: KDI(2009), Models for National Technology and Innovation Capacity Development in Turkey57

Certification on New Excellent Technology, New Excellent Product since 1993

• Government’s certification on newly developed technologies and products to promote technology and product innovation, especially by SMEs

• Incentives

Examples of non-tax/subsidy measures: Technology Certification: NET, NEP



• Incentives

� Government’s priority purchases of NEP-certified products� Government’s priority purchases of products made by the NET-certified technologies� Assistance for marketing� Preferential credits for SMEs trying to commercialize certified technologies� Preferential treatment of certified SMEs in applying for government R&D projects� Tax deduction of capital investment for commercialization of the NET-certified technologies etc

2006 2007 2008 2009 2010 2011NEP NET NEP NET NEP NET NEP NET NEP NET NEP NET

Applied 314 594 387 450 359 360 330 327 344 237 303 185

Certified 80 189 110 168 110 120 114 98 119 64 107 59

Ratio (%) 25.5 31.8 28.4 37.3 30.6 33.3 34.5 22.9 34.6 27.0 35.3 31.8

58

Purchase guarantee of new products developed according to the pre-specified demands

• Promoting R&D and product development of SMEs by securing demands in advance

• Demands for new products are specified by public organizations or private large companies � Selection of the SME that will carry out R&D and product development

Examples of non-tax/subsidy measures: Demand-based R&D support



� Selection of the SME that will carry out R&D and product development� Purchases guarantee of the new products developed by the SMEs selected for the projects

• The government or the large companies support part of R&D and product development costs.� Demands by the public organizations: government � 75%, SMEs � 25%� Demands by the private large companies: government � 50%, the private large company � 25%,

SMEs � 25%� Usually 1~2 years of project period with the government’s maximum support of about ½ mil. $.

• Successful R&D and product development � purchase the product by the demander� If successful, the SMEs pay back 10~20% of the government support � If not successful with moral hazard problem, return in full of the government support

• In practice since 2003, success cases accumulating

59

Examples of non-tax/subsidy measures: Kibo Technology Fund

• Providing credit guarantees to facilitate financing for new technology-based enterprises

• Promoting growth of technologically strong Small and Medium Enterprises (SMEs) and venture businesses

Kibo Technology Fund’s Major Services



TechnologyGuarantee

• Guarantees for monetary liabilities to financial institutions• Guarantees given to innovation-leading SMEs• Technology Appraisal Guarantees

TechnologyAppraisal

• Adoption and utilization of the Technology Appraisal Certification System• Feasibility Assessment of Technology• Comprehensive Technology Appraisal

Technological and Managerial Advisory Service

• Business Consultation• Support for Company Restructuring and Technology Transfer

Management of Guarantee Defaults and Claims

• Investigation of Debtor’s Properties• Subrogation Payments• Legal Procedure for Debt Collection

Kibo Technology Fund’s Major Services

60

1. Application for Loans

2. Consultation and Application for technology Guarantee

3. Credit Investigation and Evaluation

4. Approval of technology Guarantee

KTF

Supervision & Contribution of Capital Funds

Contribution of Capital Funds

52 3

Government



Examples of non-tax/subsidy measures: Kibo Technology Fund

4. Approval of technology Guarantee

5. Issuance of a Letter of Guarantee

6. Provision of Loans

2006 2007 2008 2009 2010Guarantee Outstanding (A) 11,150 11,245 12,593 17,144 17,426Contributions 809 608 595 1,401 459

Government (600) (200) (157) (720) -Financial Institutions (209) (408) (438) (681) (459)

Capital Funds (B) 1,152 1,446 1,729 2,695 2,813Guarantee Utilization Ratio (A/B) 9.7 7.8 7.3 6.4 6.2

Capital Fund Formation and its Performance of the Kibo Technology Fund (unit: billion won)

Source: Kibo Technology Funds (http://eng.kibo.or.kr)

* The Fund turned from loss to surplus from operation in the late 2000s.

SMEs,Venture Enterprises

Financial Institutions

Capital Funds

16

52 3 4

61

4. Implications and policy suggestions

� Synopsis: Ecuador’s current status in R&D

� Implications of the Korean experience for R&D promotion in Ecuador

� Policy suggestions: R&D promotion by U-I-R collaboration

� Policy suggestions: Non-tax/subsidy incentive measures to spur R&D

62

(1) Synopsis: Ecuador’s current status in R&D

• Ecuador’s NIS is about to emerge still with problems that needs to be resolved.� Not so widespread culture for willingness to carry out R&D� Not enough capabilities and capacities of each actor of the NIS� Not so much tendency for the actors to collaborate and cooperate with each other� Not enough financial and non-financial supportive measures and mechanisms� Not firmly established legal framework on S&T governance, R&D promotion etc

• Ecuador just introduced R&D policies to improve R&D capabilities of universities


• Ecuador just introduced R&D policies to improve R&D capabilities of universities and GRIs. (not enough capacities, mostly basic researches)� Survey on innovation expected to be done by the first half of this year

• It looks like Ecuador is trying to catch them all in R&Ds.� Trying to catch them all from high-tech to low-tech at the same time � Trying to catch them all from basic to applied or industrial R&Ds at the same time� Trying to carry out technology imitation, internalization and generation all together

63

• R&D is risky in nature, costs money, but, creates extensive positive externalities.� There exists decent rationale for government to intervene the NIS actors activities

with carrots and sticks.� Need to introduce financial and non-financial assistances that can

encourage especially SMEs to get involved in R&D and help holders of promising technologies in establishing new enterprises and commercializing their products successfully.

(2) Implications of the Korean experiences: Observations


commercializing their products successfully.

• Need to identify reasons why enterprises, whether large or small, are not willing to pay attention to R&D for whatever level of technologies � Lack of competition in domestic markets? Protection of domestic markets?� Not enough protection of the IPRs?� Not enough incentive measures?

64

• Need to determine priorities in sequence for R&D and S&T-HRD� The current situation of Ecuador regarding R&D, seems to correspond to that of

around 1970’s in Korea. Nevertheless, Ecuador looks like targeting development of all levels of technologies and S&T-HRs.- Which sectors first?- What level of technologies and S&T HR first?


(2) Implications of the Korean experiences: Observations

- What level of technologies and S&T HR first?

• Reform measures on universities and GRIs are in the right track to strengthen the NIS actors’ capacities. - Sticks have to come with carrots for more R&D activities.

• The capability and the role of GRIs should be strengthened.- Establishment of GRIs that can meet the industries’ technological demands so as

to induce industries to participate in collaboration of R&Ds

65

A. Promotion priorities and right incentives

• Priority setting and concentration: Policy plan on what to promote first - which sector for R&D, what level of tech., how much applied tech., what kind of S&T HR

• Incentive measures and mechanisms that are conducive to the priorities in R&D

B. The role of GRIs


(2) Implications of the Korean experiences�� Suggestions on Ecuador’s general policy direction on R&D

C. S&T policy coordination system – Governance system

• Cross-cutting nature of S&T and innovation � need to have coordination system established

• The coordination body needs to take the lead in administering R&D promoting measures and mechanisms

B. The role of GRIs

• Diversification of GRIs to meet the industrial needs on technologies • Enough support and strict evaluation

- Financial support for GRIs (also for universities) needs to be based on self-help to meet technological needs of industries

66

A. Partner company system and the Technology Innovation Park (TIP)

• Can be applied to high-level universities, especially those in the City of Knowledge

• The TIP can facilitate collaboration between high-tech universities and technology-intensive small enterprises- Need to train and invite experienced U-I-R coordinators


(3) Policy suggestions on the KSP Agenda: R&D promotion by U-I-R collaboration

B. Technology business incubators

• Can be applied to high-level universities along with the partner company system

• Also, the major local municipalities with many enterprises can provide TBIs to help newly established ones survive and grow in the markets.

67


A. Certification of new technologies and products• Can play an important role in encouraging SMEs to develop new technologies by

providing certified technologies with various financial and non-financial incentives � For the certification to be effective, government’s incentives to provide demands for the

technologies/products and reduce cost burden have to be combined with publicity effects.

B. Purchase guarantee of new products for pre-specified demands

(3) Policy suggestions on the KSP Agenda: Non-tax/subsidy measures to spur R&D

68

C. Technology guarantee fund• Can play an important role in encouraging financial institutions to provide loans to

promising high-level technologies by reducing risks involved in the loans.� At the early stage, can be applied to manufacturing technologies of priority industries� Need well-established technology appraisal capacities� Consulting and advisory services to help the guaranteed survive and succeed in the markets

• Can facilitate SMEs R&D by resolving marketing problem at the initial stage� May be combined with cost-sharing by the government

• Can facilitate industry-industry (or large-small companies) cooperation

Thank you.

Major Direction of Industrial Policy

Expand exp-oriented

light industries

Transition to knowledge-based economy

Promote high-tech innovation

Expand tech-intensive

industries

Expand heavy and chemical

industries

1960s 1970s 1980s 1990s 2000s

Factor-driven StageInvestment-driven Stage

Innovation-driven StageDevelopment Stage


Economic development and S&T in Korea

Appendix

Cheap laborInnovation-driven Stage

Manufacturing capabilityInnovative capability

S&T Role ofGovernment

Scientific Institution Building- MOST/KIST- S&T promotion act- 5-year economic

plan includes S&T

Scientific Infrastructure Setting- GRIs- Daeduk sci. town - R&D promotion act - KAIST: highly

qualified personnel

R&D and Private Research Lab Promotion - NRDP- Promoting private

research labs- Promotion of

industrial R&D

Leading Role in Strategies Area

- Enhancing university Research capability

- Promoting co-op research

- Policy coordination- GRI restructuring

New Challenges

Innovative Capability of Private Sector

Sources of competition

Source: KDI(2012), Toward Knowledge-based Economy of the Kingdom of Saudi Arabia70

• Industrial Policies

- Import-Substitution Industries (Textiles, Plywood, etc.)

- Expand Export-oriented Light Industries

• STI Policies

- Establish Scientific and Technological Infrastructure (e.g., KIST)

- Initiate S&T Education (e.g., KAIS)

1960s

Appendix



71

- Expand Export-oriented Light Industries (export subsidy, preferential financing)

- Five-Year Economic plans- From Agriculture to Labor-intensive

Light Manufacturing Industries

- Initiate S&T Education (e.g., KAIS)- Promote Foreign Technology Imports- Strategically Adjust to the Need for Economic

Development- Establishment of Ministry of S&T (MOST)

Source: Jang, Y. (2012)


- Expand Heavy & Chemical Industries (e.g., machinery, shipbuilding, chemicals, marine science, electronics, electricity)

• STI Policies

- Expand Technical Training- Improve Institutional Mechanism for Adapting

Imported Technology (GRIs)

1970s

Appendix



72

marine science, electronics, electricity)- Shift Emphasis from Capital Imports to

Technology Imports- Strengthen Export-oriented Industrial

Competitiveness- Foster Chaebols

(e.g., Samsung, Hyundai, LG)

Imported Technology (GRIs)- Invite eagerly Korean Scientists trained

overseas- Promote Research Applicable to Industrial

Needs- Promote Imports of Foreign Technology

(imitation, reverse engineering, imports of capital goods)



- Economic Slowdown / Trade Imbalance- Declining Competitiveness in Labor-

intensive Industries

• STI Policies

- Reluctant to TT from Advanced Economies- Pressure on Strong IPR- Independent Innovation

1980s

Appendix



73

intensive Industries- Economic Liberalization- Transform Industrial Structure to Advanced

and Balanced Form- Expand Technology-intensive Industries- Encourage Human Resource Development

and Improve Productivity of Industries- Promote SMEs

- Independent Innovation- Develop and Acquire Top-level Scientists and

Engineers- Perform National R&D Projects Efficiently

(e.g., NRP, IGTDP, AEECTP, ICRP)- Promote Industrial Technology Development- Promote Collaborative R&D

(San-Hak-Yun)



- Promote Adjustment of Industrial Structure and Technical Innovation

• STI Policies

- From Imitation to Indigenous Innovation- Realign National R&D Projects

1990s

Appendix



74

and Technical Innovation- From Imbalanced to Balanced Growth

Strategy- Promote Efficient Use of Human and Other

Resources- Improve Information Network- Information Technology (e.g., Computer,

Semi-conductor)

- Realign National R&D Projects- HAN Project (Long-term, Large-scale)- Strengthen Demand-oriented Technology

Development System (industry-neutral & technology-oriented)

- Internationalize R&D Systems and Information Networks

- Construct S&T Infrastructure- Basic Research at Universities



- Searching Sustainable Growth based on Technology Innovation

- Select and Concentrate

• STI Policies

- New Growth Engines (Bio, Nano, IT)- Develop Regional Innovation Clusters- Decentralization of R&D Authorities but

2000s

Appendix



75

- Select and Concentrate- Differentiated Strategies for Major

Industries, Future Strategic Industries, and Manufacturing-related Service Industries

- Regional Development- Entrepreneurships (Venture Capital,

NASDAQ)- Globalization (FTAs with Chile, U.S., EU,

China)

- Decentralization of R&D Authorities but Emphasis on Coordination

- Long-term Vision for S&T Development (Vision 2025)

- Five-Year S&T Principal Plan- Efficiency of Gov. R&D Investments

(Evaluation Emphasis)- National Technology Road Map (NTRM)- Private Sector-led NIS


Development strategies and S&T policies: GRIs governance

President

NSTC Prime Minister

Appendix


MEST

KRCF NRCS

MKE

ISTK

Others

13GRIs

26PolicyInst.

14GRIs

Source: Jang, Y. (2012) 76

GRI under ISTK

• KIGAM: Korea Institute of Geoscience and Mineral Resources (1948)

• KICT: Korea Institute of Construction Technology (1962)• KERI: Korea Electrotechnology Research Institute (1976)• ETRI: Electronoics and Telecommunications Research

Institute (1976)

GRIs under KRCF

• KAERI: Korea Atomic Energy Research Institute (1959)• KIST: Korea Institute of S&T (1966)• KORDI: Korea Institute of Ocean S&T (1973)• KASI: Korea Astronomy and Space Science Institute

(1974)• KRISS: Korea Research Institute of Standards and


Appendix


77

Institute (1976)• KRICT: Korea Research Institute of Chemical

Technology (1976)• KIMM: Korea Institute of Machinery and Materials (1976)• KIER: Korea Institute of Energy Research (1977)• KIT: Korea Institute of Toxicology (1982)• KFRI: Korea Food Research Institute (1987)• KITECH: Korea Institute of Industrial Technology (1989)• KRRI: Korea Railroad Research Institute (1996)• KIMS: Korea Institute of Materials Science (2007)• WKIMCHI: World Institute of Kimchi (2010)

• KRISS: Korea Research Institute of Standards and Science (1975)

• KRIBB: Korea Research Institute of Bioscience & Biotechnology (1985)

• KOPRI: Korea Polar Research Institute (1987)• KBSI: Korea Basic Science Institute (1988)• KARI: Korea Aerospace Research Institute (1989)• KISTI: Korea Institute of S&T Information (1991)• KIOM: Korea Institute of Oriental Medicine (1994)• NFRI: National Fusion Research Institute (1996)• NIMS: National Institute of Mathematical Sciences

(2005)


Appendix




78

Creation of win-wing cooperative culture between industry and university through full fledged industry-education cooperationVision

Making partner companies amounting to 5,000 leading companies in local Industrial complexesGoals

Connecting Network Hub

Partner Company Supporting Center

Partner Company System - Korea Polytech University

Appendix

Engineering House

Industry-Education

Cooperation Connecting

Center

SMEs Supporters

Professors Connecting Industry and University

Industry-Education

Cooperation Meeting

Division Meeting

Industry-Education

Cooperation Programs

- Maintaining Close Industry-Education Cooperation - Research, Education and Exchange with Partner CompaniesStrategies

• Establishment of technical visions of enterprises connected with local strategic industry and construction of technical development system

• Construction of industry-industry innovation network based on exchanges between divisions and types of business

• Intensification of internal innovation capability through reeducation of workers and nurturing and supplying professional technical talents

79

Documents

R&d