Transcript Document 7329343

Objectives
 To review the roles of the government research
institutes (GRIs) as facilitator of industrial
technology adaptation
 To evaluate the performance of GRIs and derive
implications for latecomers
How far Korea has come since 1960s?
 Economic and S&T development



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
GNP p. c.: from $ 87(’61) to $20,000(07)
Exports : from $55 M(’61) to $300 B (2006)
Unemployment rate : 22.3%(’61) to 3% (2006)
From one of the poorest countries in the world to one
of the most dynamic industrial economies
From a barren land to a new S&T power
(7th largest spender in R&D, 4th largest producer of
patents, etc)
 Growth of R&D investment
R&D Expenditures in Korea
25,000
24,155
Billion Won
20,000
17,325
15,000
13,849
12,186
10,000
10,741
5,000
4,035
773
1,538
1982
1985
0
1990
1995
1997
2000
2002
2005
Note: Upper portion of the bar refers to industry contribution, and the lower parts that of the government.
6th largest R&D investor among OECD countries
 Trend of Korea’s R&D structure
Source: Ministry of Science and Technology, Republic of Korea
Private industries account for over 75% of the GERD
Factors behind the growth

Demand side : Outward looking development  exportorientation  pressure from international market for
technological competitiveness  increased demand for
technology adaptation and/or RDI

Supply side
o Financial resources : Large-firm-oriented industrial
development  chaebol system  increased abilities of
private industries to finance long-term, risky R&D projects
o Human resource : Korea prepared itself well for R&D by
investing heavily in education and HRD
o Various policy programs to promote private RDI
o GRIs to help industries adapt new technologies
Government Research Institutes
 As Korea lacked in technological capability required for
industrial development in the early stage of development,
the government created the Korea Institute of Science and
Technology (KIST) in 1966 and the Korea S&T Information
Center (KORSTIC) in 1962 in order to make up for the
technological weakness of the private industries and help
them adapt new technologies

Legal entity: Non-government special corp (To provide better job
terms for research scientists and engineers)
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Financial sources: Government budget and industries
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Key personnel: Korean S&E from abroad

Operation: Independent (But under the control of sponsoring
ministries)
 Expansion of GRIs
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In the 1970s, Korea pursued the development of heavy
chemical industries, with strategic focus on steel, shipbuilding,
machineries, chemicals, electronics, and so on.
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In order support the development of the HCI, the government
created GRI for each of the strategic areas, such as:
(1) Korea Institute of Machineries and Metals (KIMM)
(2) Korea Research Institute of Standard Science (KRISS)
(3) Electronic Technology Research Institute (ETRI)
(4) Korea Research Institute for Chemical Technology (KRICT)
(5) Korea Research Institute of Shipbuilding and Oceans (KRISO)
(6) Systems Engineering Research Institute (SERI), etc
 Changes in the roles of GRIs
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Entering into the 1980s, the environment surrounding GRIs has
changed rapidly
- R&D capabilities of private industries grew remarkably
- Universities also began to reorient their systems toward
research
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In response, the functions of the GRIs were readjusted such that
they not only assist the industries but also conduct national
R&D projects which were designed to develop industrial
technologies as well as generic technologies(GRIs today
account for about 40% of the government-funded R&D)
GRIs’ contributions to industrial
technology adaptation
[Case 1: D RAM technology]
To avoid duplicate research and investment, the government
intervened and established a national project for D-RAM
research. ETRI played the coordinating role with three large
enterprises participating. Samsung was the first among the three
that announced the completion of designing 4M D RAM in 1989
and 16M D RAM in 1990, only a few months after Japan.
[Case 2: Electronic switching system]
In 1981, the government(sole buyer) decided to shift the
public telephone switching system from an electrical direct
dialing (EDD) system to an ESS. In 1986, ETRI organized a
consortium with four local companies to develop Korea’s
own ESS – Time Division Exchange(TDX) system. The
project was completed and the technology was transferred to
the participating companies for production. The new system
not only replaced the old ones but also was exported to
foreign countries.
[Case 3: Optical fibre]
When Corning Glass refused to transfer optical fibre
production technology to Korea in 1977, two Chaebol
companies entered into a joint project with KIST to develop
the technology. After 7 years of research, the locally
produced optical cable was tested successfully on a 35 km
route in 1983. Although the local effort was terminated due
to slow progress, it helped local firms to gain bargaining
power in acquiring foreign technologies on a far more
favorable term.
[Case 4: Development of strategic industries]
Korean government’s plan to launch the then ambitious
plans to build the Pohang Steel Mill and shipyards were
based on the technical feasibility studies by KIST. KIST not
only provided the basic project concepts but also identified
technologies required for the construction of the steel mill
and shipyard.
[Case 5: Polyester film technology]
When Japanese companies refused to transfer polyester
film production technology to Korea for fear of losing market,
a Korean chemical company, in collaboration with KIST,
successfully reverse-engineered the technology and Korea
became one the major suppliers of audio- and video-cassette
tape in the world market.
[Case 6: Aerospace industry]
To develop aerospace industry, the government legislated
the Aerospace Industry Development Law in 1987, and
established the Korea Aerospace Research Institute (KARI)
in a way to help the private sectors to adapt aerospace
technologies. KARI has been providing satellite technologies
for local communication companies and is leading national
project on space technology. It is also working with local
aircraft companies for the development of various types of
aircraft for civilian and military uses.
Recent changes in GRIs
 Reorganization of GRIs
 GRIs
were restructuring in 1999 because of two
criticisms against the GRI system
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* Inefficiency in GRI operation because of the interinstitutional barriers to mobility
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* GRIs tended to work for the interests of their
patrons (ministries) rather than national interests
 So, GRIs were regrouped and put under three research
councils which are under the control of the National
Science and Technology Council (NSTC)
Current roles of GRIs
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R&D: GRIs are still the major players in public R&D,
accounting for about 40% of government R&D
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Assistance for industries
- Technology transfer, technology consultancy, technology
identification, technology evaluation, etc
- Operation of regional TLO
- Technology information
GRIs’ performance: an evaluation
 GRIs
have contributed to industrial development by
helping private industries adapt new technologies, in
particular, in the early stage of development when
Korea lacked in technological capabilities.
- In the 60s and 70s, technical assistance, such as what GRIs
provided was far more effectivce than other government support
programs, including financial, tax and other subsidies.
 They
also contributed to the laying of a foundation for
S&T development by attracting top talents into S&T
and nurturing a culture for research.
- GRIs’ research S&E have spread out to various sectors, playing
leading roles in S&T development in the Korean society
- S&E at KIST and other GRIs offered a very attractive role model
for young talents back in the 60s and 70s who are now leading
research community in Korea.
 But as the names of GRIs suggest, they are too much
linked to specific industries and lack agility to cope
with rapid changes in technology and industry.
 In the 60s and 70s, there existed fairly large gaps
between what GRIs could offer and what industries
could accommodate – GRIs were not familiar with the
technical needs at the shop-floor level.
 Due to organizational rigidity, GRIs have not been
able to adapt to the changing environments and
therefore have been subject to external restructuring
and reorganization. (Forced by the government)
Implications for latecomers?
 For catch-up economies that lack S&T capabilities,
Korean GRI can be an effective model as an
instrument to promote and facilitate technology
adaptation in the early stage of industrial development
- But, for GRIs to perform better, they need be staffed with S&E who
are familiar with both technologies and shop-floor needs.
 GRIs should be organized in a very flexible way so
that they can adapt themselves to the changing needs
as the economies go through different stages of
development