Developing the Asian Innovation Scoreboard

Transcription

1 Developing the Asian Innovation Scoreboard Published by: Korea Institute of Science and Technology Evaluation and Planning(KISTEP) February, i -

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3 This is the English version of the final report of Developing the Asian Innovation Scoreboard(AIS) to enhance the capability of Science, Technology and Innovation in Asia project. - Project Director: Dong-hoon Oh, Research Fellow, KISTEP - Project Participants: Herin Ahn, Researcher, KISTEP Yong-hee Kim, Associate Research Fellow, KISTEP Hye-jung Joo, Associate Research Fellow, KISTEP Yun-mi Ko, Associate Research Fellow, KISTEP This report does not necessarily reflect the official opinions of KISTEP. If there is a need to supplement or modify, please contact us at herini@kistep.re.kr. - iii -

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5 Contents Chapter 1. Introduction 1 Chapter 2. Cases of Major Science and Technology Innovation Assessments 4 1. Innovation Union Scoreboard (IUS) 4 2. Nordic Innovation Monitor (NIM) World Competitiveness Yearbook (WCY) Global Competitiveness Report (GCR) Global Innovation Index 27 Chapter 3. Science, Technology and Innovation in Asia Korea Japan Taiwan Singapore China India Malaysia 59 Chapter 4. Developing the Asian Innovation Scoreboard Development and Application of Science and Technology Indicators Composition of the Asian Innovation Scoreboard Pilot Analysis 77 - v -

6 Chapter 5. Conclusion 121 References 124 Appendix Selecting the Target Countries Country Status vi -

7 Table <Table 1> Composition of the IUS 5 <Table 2> SII Trends 8 <Table 3> Country Categorization under the SII 9 <Table 4> Indicators for the NIM <Table 5> Innovation Performance in the NIM 2009(2003, 2008) 14 <Table 6> Innovation Framework Conditions in the NIM 2009 (2003, 2008) 15 <Table 7> Assessment Categories and the number of Indicators for the WCY <Table 8> Indicators for the Scientific infrastructure and Technological infrastructure 21 <Table 9> Composition of GCR 23 <Table 10> Indicators for S&T sub categories 23 <Table 11> Weights for Three Categories Depending on Country s Development Stage 25 <Table 12> Countries Development Stage for GDP per Capita 25 <Table 13> Asian Countries by their Development Stage(2011) 25 <Table 14> Rankings for National Competitiveness 27 <Table 15> GII Index 28 <Table 16> Top 30 Countries in GII(2011) 28 <Table 17> Top 30 Countries in Innovation Input(2011) 29 <Table 18> Top 30 Countries in Innovation Output(2011) 29 <Table 19> Major S&T development indicators for the period of 12th five year plan 54 <Table 20> Indicators for the AIS (Draft) 72 <Table 21> Alternative Indicators 76 <Table 22> Countries for the pilot analysis 76 <Table 23> Number of Total researchers in Asian countries 77 <Table 24> Total researchers per 10,000 people in Asian countries 78 <Table 25> % of S&E degrees in total first university degrees in Asian countries 79 <Table 26> % of S&E Ph.D.s in relevant age cohort in Asia countries 80 <Table 27> Number of organizations that issued USPTO patents in Asian countries 81 - vii -

8 Table <Table 28> Number of universities ranked in Asia s 100 best universities in Asian 82 <Table 29> Number of companies ranked in the world s top 2,000 R&D private investors in Asian countries 83 <Table 30> Number of SCI papers in the past 15 years (STOCK) in Asian countries 84 <Table 31> Number of USPTO patents in the past 15 years (STOCK) in Asian countries 85 <Table 32> Number of Triadic patents in the past 15 years (STOCK) in Asian countries 86 <Table 33> Number of PCT patents in the past 15 years (STOCK) in Asian countries 87 <Table 34> Total expenditure on R&D in Asia countries 88 <Table 35> Total expenditure on R&D as % of GDP in Asian countries 89 <Table 36> Total expenditure on R&D per researcher (PPP$) in Asian countries 90 <Table 37> Business expenditure on R&D (Mil. PPP$) in Asian countries 91 <Table 38> % of business expenditure on R&D in industrial added value in Asian countries 92 <Table 39> Government expenditure on R&D as % of GDP in Asian countries 93 <Table 40> Venture capital investment as % of GDP in Asian countries 94 <Table 41> Number of USPTO patents jointly issued by industry, academia, and research institute in Asian countries 95 <Table 42> % of private R&D investment in government and academia R&D investment in Asian Countries 96 <Table 43> Technological cooperation in Asian Countries 97 <Table 44> Number of international joint patents in USPTO in Asian Countries 98 <Table 45> Foreign Direct Investment (FDI) as a % of GDP in Asian Countries 99 <Table 46> Attitudes toward globalization in Asian Countries 100 <Table 47> Protection of intellectual property rights in Asian countries 101 <Table 48> Number of Broadband subscribers per 100 people in Asian countries 102 <Table 49> Number of Internet users per 1,000 people in Asian countries 103 <Table 50> Households with Internet connection in Asian countries 104 <Table 51> Number of Mobile phone subscribers per 100 inhabitants in Asian countries 105 <Table 52> Overall quality of social infrastructure in Asian countries viii -

9 Table <Table 53> Attitudes toward new cultures in Asian countries 107 <Table 54> Emphasis on science in school education in Asian countries 108 <Table 55> Export in high tech industry to manufacturing sector in Asian countries 109 <Table 56> Technology export in Asian countries 110 <Table 57> Technology Balance of Payment in Asian countries 111 <Table 58> Industrial added value per capita (PPP $) in Asian countries 112 <Table 59> Annual Number of USPTO patents in Asian countries 113 <Table 60> Annual Number of Triadic patents in Asian countries 114 <Table 61> Annual Number of PCT patents in Asian countries 115 <Table 62> Number of USPTO patents to annual GERD (per Mil. PPP$) in Asian countries 116 <Table 63> Number of Triadic patents to annual GERD (per Mil. PPP$) in Asian countries 117 <Table 64> Number of PCT patents to annual GERD (per Mil. PPP$) in Asian countries 118 <Table 65> Number of SCI papers per researchers in Asian countries 119 <Table 66> Citations per paper per period of 5 years in Asian countries ix -

10 Figure <Figure 1> Sub categories for the Enablers 9 <Figure 2> Sub categories for Firm Activities 10 <Figure 3> Sub categories for Performance 10 <Figure 4> Innovation Competencies by Region Among OECD Countries (2008) 16 <Figure 5> Framework Conditions for ICT by Region (2003, 2008) 16 <Figure 6> Framework Conditions for Entrepreneurship by Region (2003, 2008) 17 <Figure 7> Framework Conditions for human resources by Region (2003, 2008) 18 <Figure 8> Framework Conditions for Knowledge Creation by Region (2003, 2008) 18 <Figure 9> Competitiveness Ranks 21 <Figure 10> Rankings for National Competitiveness (2010~2011) 22 <Figure 11> 12 Pillars of Competitiveness 24 <Figure 12> Selecting Target Countries 31 <Figure 13> Organizational chart of NSTC 34 <Figure 14> S&T Administrative System in Japan 39 <Figure 15> Decision making Process of S&T Policies in Japan 39 <Figure 16> Flow of Basic S&T Plan 41 <Figure 17> Taiwan s Organizational Structure for S&T Promotion 44 <Figure 18> NCSRD organization chart 60 <Figure19> The heuristic model of national innovation systems 67 <Figure 20> Framework of COSTII 71 <Figure 21> Number of Total Researchers 77 <Figure 22> Number of Total Researchers in Top Three Countries 77 <Figure 23> Total researchers per 10,000 people 78 <Figure 24> Total researchers per 10,000 people in Top Four Countries 78 <Figure 25> % of S&E degrees in total first university degrees 79 <Figure 26> % of S&E degrees in total first university degrees in Top Three Countries 79 <Figure 27> % of S&E Ph.D.s in relevant age cohort 80 <Figure 28> % of S&E Ph.D.s in relevant age cohort in Top Three Countries 80 - x -

11 <Figure 29> Number of organizations that issued USPTO patents 81 <Figure 30> Number of organizations that issued USPTO patents in Top Three Countries 81 <Figure 31> Number of universities ranked in Asia s 100 best universities 82 <Figure 32> Number of universities ranked in Asia s 100 best universities in Top Three Countries 82 <Figure 33> Number of companies ranked in the world s top 2,000 R&D private investors 83 <Figure 34> Number of companies ranked in the world s top 2,000 R&D private investors in Top Three Countries 83 <Figure 35> Number of SCI papers in the past 15 years (STOCK) 84 <Figure 36> Number of SCI papers in the past 15 years (STOCK) in Top Three Countries 84 <Figure 37> Number of USPTO patents in the past 15 years (STOCK) 85 <Figure 38> Number of USPTO patents in the past 15 years (STOCK) in Top Three Countries 85 <Figure 39> Number of Triadic patents in the past 15 years (STOCK) 86 <Figure 40> Number of Triadic patents in the past 15 years (STOCK) in Top Three Countries 86 <Figure 41> Number of PCT patents in the past 15 years (STOCK) 87 <Figure 42> Number of PCT patents in the past 15 years (STOCK) in Top Three Countries 87 <Figure 43> Total expenditure on R&D 88 <Figure 44> Total expenditure on R&D in Top Three Countries 88 <Figure 45> Total expenditure on R&D as % of GDP 89 <Figure 46> Total expenditure on R&D as % of GDP in Top Three Countries 89 <Figure 47> Total expenditure on R&D per researcher (PPP$) 90 <Figure 48> Total expenditure on R&D per researcher (PPP$) in Top Three Countries 90 <Figure 49> Business expenditure on R&D (Mil. PPP$) 91 <Figure 50> Business expenditure on R&D (Mil. PPP$) in Top Three Countries 91 <Figure 51> % of business expenditure on R&D in industrial added value 92 <Figure 52> % of business expenditure on R&D in industrial added value in Top Three Countries 92 <Figure 53> Government expenditure on R&D as % of GDP 93 <Figure 54> Government expenditure on R&D as % of GDP in Top Three Countries 93 - xi -

12 <Figure 55> Venture capital investment as % of GDP 94 <Figure 56> Venture capital investment as % of GDP in Top Three Countries 94 <Figure 57> Number of USPTO patents jointly issued by Triple Helix Cooperation 95 <Figure 58> No of USPTO patents jointly issued by Triple Helix Cooperation in Top Three Countries 95 <Figure 59> % of private R&D investment in government and academia R&D investment 96 <Figure 60> % of private R&D investment in government and academia R&D investment in Top Three Countries 96 <Figure 61> Technological cooperation 97 <Figure 62> Technological cooperation in Top Three Countries 97 <Figure 63> Number of international joint patents in USPTO 98 <Figure 64> Number of international joint patents in USPTO in Top Three Countries 98 <Figure 65> FDI as a % of GDP 99 <Figure 66> FDI as a % of GDP in Top Three Countries 99 <Figure 67> Attitudes toward globalization 100 <Figure 68> Attitudes toward globalization in Top Three Countries 100 <Figure 69> Protection of intellectual property rights 101 <Figure 70> Protection of intellectual property rights in Top Three Countries 101 <Figure 71> Number of Broadband subscribers per 100 people 102 <Figure 72> Number of Broadband subscribers per 100 people in Top Three Countries 102 <Figure 73> Number of Internet users per 1,000 people 103 <Figure 74> Number of Internet users per 1,000 people in Top Three Countries 103 <Figure 75> Households with Internet connection (%) 104 <Figure 76> Households with Internet connection (%) in Top Three Countries 104 <Figure 77> Number of Mobile phone subscribers per 100 inhabitants 105 <Figure 78> Number of Mobile phone subscribers per 100 inhabitants in Top Three Countries 105 <Figure 79> Overall quality of social infrastructure 106 <Figure 80> Overall quality of social infrastructure in Top Three Countries xii -

13 <Figure 81> Attitudes toward new cultures 107 <Figure 82> Attitudes toward new cultures in Top Three Countries 107 <Figure 83> Emphasis on science in school education 108 <Figure 84> Emphasis on science in school education in Top Three Countries 108 <Figure 85> Export in high tech industry to manufacturing sector 109 <Figure 86> Export in high tech industry to manufacturing sector in Top Three Countries 109 <Figure 87> Technology export 110 <Figure 88> Technology export in Top Three Countries 110 <Figure 89> Technology Balance of Payment 111 <Figure 90> Technology Balance of Payment in Top Three Countries 111 <Figure 91> Industrial added value per capita (PPP$) 112 <Figure 92> Industrial added value per capita (PPP$) in Top Three Countries 112 <Figure 93> Annual Number of USPTO patents 113 <Figure 94> Annual Number of USPTO patents in Top Three Countries 113 <Figure 95> Annual Number of USPTO patents 114 <Figure 96> Annual Number of USPTO patents in Top Three Countries 114 <Figure 97> Annual Number of PCT patents 115 <Figure 98> Annual Number of PCT patents in Top Three Countries 115 <Figure 99> Number of USPTO patents to annual GERD (per Mil. PPP$) 116 <Figure 100> Number of USPTO patents to annual GERD (per Mil. PPP$) in Top Three Countries 116 <Figure 101> Number of Triadic patents to annual GERD (per Mil. PPP$) 117 <Figure 102> Number of Triadic patents to annual GERD (per Mil. PPP$) in Top Three Countries 117 <Figure 103> Number of PCT patents to annual GERD (per Mil. PPP$) 118 <Figure 104> Number of PCT patents to annual GERD (per Mil. PPP$) in Top Three Countries 118 <Figure 105> Number of SCI papers per researchers 119 <Figure 106> Number of SCI papers per researchers in Top Three Countries 119 <Figure 107> Citations per paper per period of 5 years 120 <Figure 108> Citations per paper per period of 5 years in Top Three Countries xiii -

14 Chapter 1 Introduction In recent years, open technological innovation across the borders between nations has taken on a greater importance for securing natural resources, solving global problems, and enhancing national competitiveness. With the growing importance of innovation, it is time to make a more accurate assessment of science, technology and innovation capacities, through both qualitative and quantitative analysis. Asia is now slowly recovering from the economic crisis that began in 2008, but many problems still remain before achieving sustainable economic growth, enhancing scientific & technological competitiveness, and reinforcing technological innovations. The broad spectrum of countries comprising Asia is facing common problems such as huge economic disparity, environmental issues, infectious diseases, and climate change. On the other hand, Asia s strong enthusiasm for education, its strong work ethic, and its position as the world s most populous continent present a great opportunity for leadership in the fields of science and technology if it succeeds in solving current problems and enhancing scientific and technological innovation capacities. To this end, it is necessary, above all, to make an accurate diagnosis and assessment of the S&T innovation capacities of each Asian country. However, current international assessment of innovation is carried out mostly on advanced countries in Europe and on the U.S., so a reflection of the unique characteristics of Asian countries, which have quite different economies, societies, and cultures from those of the West, is undeniably lacking. For instance, the rapid economic rise of Korea and Japan, with scarce resources and under numerous constraints, has taken the world by surprise. Nevertheless, there has never been a clear explanation of how this was even possible. For now, statistical data for the S&T environment of Asian countries, except for those of Korea, Japan, China, Taiwan and Singapore, are incomplete, causing difficulties in innovation analysis. Therefore, in an effort to lay the foundation for Asia to assume the leadership in S&T around the world, a new innovation scoreboard that suits the real situation of Asia is required. For instance, northern Chapter 1. Introduction 1

15 European countries have published the Nordic Innovation Monitor, analyzed region-specific features, and tried to develop appropriate indicators of their own. In this regard, with an Asia-specific innovation scoreboard, we may obtain an explanation of Asian uniqueness that has been lacking in understanding within the existing assessment schemes, and then provide it as an R&D model for developing countries. This research, with its ultimate goal of developing an Asia-specific innovation scoreboard, seeks to define the concepts of the Asian Innovation Scoreboard (AIS), make a framework for it, and thus provide an overall assessment system, including indicators and models. As the first step of the research, a number of major innovation assessment systems that would serve as a basis for developing the AIS was analyzed. In the meantime, it closely examined the development process of Europe s Innovation Union Scoreboard(IUS), the Nordic Innovation Monitor(NIM), the Global Competitiveness Reports of the IMD and WEF and more reports, exploring the possibility of benchmarking them and their implications for the Asian region. The second phase of the research was to investigate the scientific and technological trends of Asian countries. 41 Asian countries with available statistics were classified according to their absolute and relative economic size. Seven target countries were selected from among them to examine innovation trends in Asia: Korea, Japan, China, Singapore, Malaysia, India, and Taiwan. A close investigation was conducted into their concepts of S&T innovations defined in their national policy goals, their activities, differences in environment, R&D trends, related statistics, and their innovation carry-out systems. The last, but the most essential, phase of the research was to draft a framework for the AIS. With an increasing number of countries becoming interested in the correlation between S&T and economic development, indicators that accurately measure their current status have been thrust into the spotlight across the world. Moreover, developing countries, in particular, have been largely underrepresented in global S&T statistics, so there has been growing consensus on the need to narrow such an information disparity. In this part, a framework for the AIS and drafted indicators were suggested. The research is a preliminary study for the development of the AIS, with its 2 Developing the Asian Innovation Scoreboard

16 primary goal of reviewing how other Asian countries collect and make use of statistical data, and ultimately finding indicators necessary for assessing the S&T innovation capacity of Asian countries more specifically. By the same token, the research could be used as core information for Asian countries to build their index systems, choose analysis methodologies, and set analysis targets suitable to themselves. Furthermore, it would contribute to offering customized support to Asian countries to develop their innovation policies, and hence, to the promotion of innovation capacity in the entire region. Chapter 1. Introduction 3

17 Chapter 2 Cases of Major Science and Technology Innovation Assessments In this chapter, evaluation schemes for major science and technology innovation assessments will be presented along with the purposes, features, composition, and methodologies of each case. Characteristics found throughout methodologies, index composition, and the process for drawing lessons will be looked into, and possible limitations in applying such assessment schemes to Asian countries will be proposed, providing key foundations for future research. 1. Innovation Union Scoreboard (IUS) 1) 1) Composition and Methodology The European Union releases its Innovation Union Scoreboard (IUS) every year. The former European Innovation Scoreboard (EIS) was transformed into the IUS with the adoption of the Innovation Union Communication in October The IUS is utilized to assess and monitor comparative innovation performance of EU member states. The IUS 2010 assesses innovation activities of 27 EU member states plus Croatia, Iceland, Macedonia, Norway, Serbia, Switzerland, and Turkey in 3 categories, 8 subcategories, and 25 indicators. 1) European Commission(2010), Innovation Union Scoreboard(IUS) Developing the Asian Innovation Scoreboard

18 <Table 1> Composition of the IUS Main categories/ sub categories / indicators Data source Reference year(s) ENABLERS Human resources New doctorate graduates (ISCED 6) per 1000 population aged Eurostat Percentage of population aged having completed tertiary education Eurostat Percentage of youth aged having attained at least upper secondary level education Eurostat Open, excellent, and attractive research systems International scientific co publications per million population Scientific publications among the top 10% most cited publications worldwide as % of total scientific publications of the country Science Metrix/Scopus Science Metrix/Scopus Non EU doctorate students as a % of all doctorate students Eurostat Finance and support Public R&D expenditures as % of GDP Eurostat Venture capital (early stage, expansion, and replacement) as % of GDP Eurostat FIRM ACTIVITIES Firm investments Business R&D expenditures as % of GDP Eurostat Non R&D innovation expenditures as % of turnover Eurostat 2004, 2006, 2008 LinkageS&Entrepreneurship SMEs innovating in house as % of SMEs Eurostat 2004, 2006, Innovative SMEs collaborating with others as % of SMEs Eurostat 2004, 2006, Public private co publications per million population Intellectual assets CWTS/Thomson Reuters PCT patents applications per billion GDP (in PPS ) Eurostat PCT patent applications in societal challenges per billion GDP (in PPS ) (climate change mitigation; health) OECD/Eurostat Community trademarks per billion GDP (in PPS ) OHIM/Eurostat Community designs per billion GDP (in PPS ) OHIM/Eurostat PERFORMANCE Innovators SMEs introducing products or process innovations as % of SMEs Eurostat 2004, 2006, SMEs introducing marketing or organizational innovations as % of SMEs Eurostat 2004, 2006, High growth innovative firms N/A N/A Chapter 2. Cases of Major Science and Technology Innovation Assessments 5

19 Economic effects Main categories/ sub categories / indicators Data source Reference year(s) Employment in knowledge intensive activities (manufacturing and services) as % of total employment Eurostat 2008, Medium and high tech product exports as % of total product exports UN/Eurostat Knowledge intensive services exports as % of total service exports UN/Eurostat Sales of new to market and new to firm innovations as % of turnover Eurostat License and patent revenues from abroad as % of GDP Eurostat Total innovation performance of each country is calculated based on the composite index called the "Summary Innovation Index(SII)". Countries are categorized into four types based on the SII values of the past five years: 'innovation leaders', 'innovation followers', 'moderate innovators', and 'modest innovators'. For further analysis, they were sub categorized into three types depending on the SII growth rate: 'growth leaders', 'moderate growers', and 'slow growers'. <BOX 1: Calculating SII> Step 1: Identifying and replacing outliers Positive outliers are identified as those relative scores higher than the mean plus 2 times the standard deviation. Negative outliers are identified as those relative scores smaller than the mean minus 2 times the minimum values. These outliers are replaced by the respective maximum and minimum values observed over all the years and in all countries. Step 2: Setting replacing years A reference year for each indicator is identified based on data availability for all countries (for all countries, data availability is at least 75%). For most indicators, the reference year will be lagging 1 or 2 years behind the year to which the IUS refers. Step 3: Imputing for missing values These are the three cases where the missing values are imputed. 6 Developing the Asian Innovation Scoreboard

20 Example 1 (latest year missing) Available relative to EU 27 score N/A Use most recent year Example 2 (year in between missing) Available relative to EU 27 score 150 N/A Substitute with previous year Example 3(beginning of period missing) Available relative to EU 27 score N/A N/A Substitute with latest available year Step 4: Determining Maximum and Minimum scores The maximum score is the highest relative score found for the whole time period within all countries, excluding positive outliers. The minimum score is the lowest relative score found for the whole time period within all countries excluding negative outliers. Step 5: Transforming data if data are highly skewed Most of the indicators are fractional indicators with values between 0% and 100%. Some indicators that are not limited to an upper threshold can be highly volatile and can have skewed data distribution. For the following indicators, skewness is above 1 and data have been transformed using a square root transformation. Step 6: Calculating re scaled scores Re scaled scores of the relative scores for all years are calculated by first subtracting the Minimum score and then dividing by the difference between the Maximum and Minimum score. The Maximum re scaled score is thus equal to 1 and the minimum re scaled score is equal to 0. For positive and negative outliers and small countries where the value of the relative score is above the Maximum score or below the Minimum score, the re scaled score is thus set equal to 1 or 0, respectively. Step 7: Calculating composite innovation indexes For each year a composite Summary Innovation Index is calculated as the unweighted average of the re scaled scores for all indicators. 2) Results of the IUS 2010 Analysis results for the Summary Innovation Index (SII) for each country are shown in <Table 2>. The SII being closer to 1 signifies higher performance. Chapter 2. Cases of Major Science and Technology Innovation Assessments 7

21 <Table 2> SII Trends Country SII Rank 2009 (A) 2010 (B) Difference (B-A) Difference Switzerland Sweden Denmark Finland Germany United Kingdom Belgium Austria Netherlands Ireland Luxembourg France EU Cyprus Iceland Slovenia Estonia, Rep Norway Portugal Italy Czech Republic Spain Greece Malta Hungary Croatia Poland Slovak Republic Rumania Serbia Macedonia Lithuania Bulgaria Turkey Latvia Developing the Asian Innovation Scoreboard

22 Analysis results for each country type based on cluster analysis are shown in <Table 3>. <Table 3> Country Categorization under the SII Country clusters Growth rate Growth leaders Moderate growers Slow growers Innovation leaders 1.6% Innovation followers 2.6% Moderate Innovators 3.5% Finland (FI), Germany (DE) Estonia (EE), Slovenia (SI) Malta (MT), Portugal (PT) Austria (AT), Belgium (BE), France (FR), Ireland (IE), Luxembourg (LU), Netherlands (NL) Czech Republic (CZ), Greece (GR), Hungary (HU), Italy (IT), Poland (PL), Slovakia(SK), Spain (ES) Denmark (DK), Sweden (SE) Cyprus (CY), United Kingdom (UK) Modest Innovators 3.3% Bulgaria (BG), Romania (RO) Latvia (LV) Lithuania (LT) * Note: The growth rate implies the rate for the past five years on average. The IUS proposes results in 3 categories and 8 sub categories. The results for 2010 are as follows. Sweden ranked first in innovation performance for human resources among enablers, while the Netherlands scored the highest in innovation performance in open, excellent, and attractive research systems. Sweden and Finland showed the highest innovation performance in finance and support. <Figure 1> Sub categories for the Enablers Chapter 2. Cases of Major Science and Technology Innovation Assessments 9

23 As for firm activities, firm investments flourished in Sweden, Germany, and Finland, while linkages and entrepreneurship mostly stood out in Denmark, Sweden, and Belgium. Denmark, Sweden, and Germany showed high values in intellectual assets. <Figure 2> Sub categories for Firm Activities Meanwhile, in the sector of performance, Germany had the highest points in the number of innovations, while Malta, belonging to the group of modest innovators, surprisingly recorded the highest points in innovation performance in economic effects. <Figure 3> Sub categories for Performance 10 Developing the Asian Innovation Scoreboard

24 2. Nordic Innovation Monitor (NIM) 2) 1) Index Scheme The Nordic Innovation Monitor (NIM) published by the Nordic Council of Ministers since 2009 aims to identify initiatives of advanced countries seeking to improve framework conditions as a Nordic innovation model that assesses innovation competencies of OECD countries. By doing so, this would exert positive influences over innovative performance. The NIM, unlike other international indexes, performs analysis by distinguishing innovation performance and framework conditions. The four areas of NIM are human resources, knowledge creation, ICT, and entrepreneurship. These areas are divided into performance and framework conditions, and the former are measured using 30 indicators in 9 categories and the latter using 135 indicators in 42 categories (a total of 165 indicators). Each indicator is collected from sources including the OECD, WEF, IMF, IMD, ILO, and Eurostat. The reports includes regional analysis through regional rankings, comparison with top ranked countries(best practices), peer review by policy experts, and policy propositions for each country. 1. Human Resources <Table 4> Indicators for the NIM 2009 Knowledge Workers Education Expenditure Incentives Basic Education Performance Organization and Management Framework Conditions Higher Education Lifelong Learning Strategic Management Conditions for Organization Management Skills 2) Norden(2009), Nordic Innovation Monitor 2009 Chapter 2. Cases of Major Science and Technology Innovation Assessments 11

25 2. Knowledge Creation Size of Public Research Knowledge Building Quality of Public Research Relevance of Public Research Performance Framework Conditions Knowledge Transfer Co operation in R&D Competencies of Workers Knowledge Sharing Tax Incentives and Subsidies Skills among Customers and Suppliers Competition Access to Technology 3. Information and Communication Technology Telecom Prices Corporate Digitalisation Infrastructure ICT Competencies Among Employees Performance Digital Citizen Framework Conditions Digital Consumers Digitization of Educational Institutions Data Security Digitization of Public Institutions 4. Entrepreneurship Technology Transfer Regulations Entry Barriers Access to Foreign Markets Loans Growth Venture Capital Exit Market Wealth and Bequest Tax Capital Taxes Performance Framework Conditions Restart Possibilities Entrepreneurship Education Traditional Business Education Personal Income Tax Business Tax Start ups Bankruptcy Legislation Administrative Burdens Start ups Administrative Burdens Production Labor Market Regulations Culture 12 Developing the Asian Innovation Scoreboard

26 For regional analysis, 25 OECD countries included in the NIM are grouped and analyzed based on cultural and regional considerations. 1 Leading English speaking countries: U.S., U.K., Canada 2 Nordic region: Denmark, Finland, Iceland, Norway, Sweden 3 Japan and Korea 4 Other English speaking countries: Australia, Ireland, New Zealand 5 Continental Europe: Austria, Belgium, France, Germany, Italy, Netherlands, Portugal, Spain, Switzerland 2) Results of the NIM 2009 The NIM results are divided into innovation performance and innovation framework conditions. In the 2008 innovation performance, Korea, the U.S., Japan, and Denmark were ranked as the world s innovation leaders. Greatest improvements in performance compared with 2003 were made by Denmark, Canada, Japan, Germany, Korea, Norway, Austria, and Portugal. As for the 2008 innovation framework conditions, the U.S. and Iceland were revealed to have the highest framework conditions driving innovation. Framework conditions were significantly improved in three countries: Denmark, Iceland, and Switzerland. Cross regional comparison results revealed that the leading English speaking countries (i.e., the U.S., the U.K., and Canada) were the top innovative ones, followed by the Nordic region and other English speaking countries (i.e., Australia, New Zealand, and Ireland). Asia, mainly consisting of Korea and Japan, showed weak scores in innovation conditions, but very strong in innovation performance. Korea showed strong performance in entrepreneurship while Japan excelled in knowledge creation. Excellence of the leading English speaking countries was closely associated with the excellent outputs of the U.S. (making up 97 percent of innovation competencies of this group) while continental Europe showed lower performance in innovation competencies. Chapter 2. Cases of Major Science and Technology Innovation Assessments 13

27 <Table 5> Innovation Performance in the NIM 2009(2003, 2008) Country 2008 Rank 2008 (Index) 2003 (Index) Rank Change Korea, Rep United States Japan Denmark Sweden Iceland Finland Canada United Kingdom Netherlands Germany Switzerland Australia New Zealand Norway Ireland Belgium Austria Spain France Portugal Turkey Italy Greece Mexico * Note 1: Units of indexes are different, so they were standardized for cross comparison. Each index value is related to the distance between the highest ranking and lowest ranking ranging from 0 to 100, with the value closer to 100 being higher in score. * Note 2: Each of the 51 policy areas are expressed by one or several indicators. The policy areas are assigned a value calculated by taking the average of each indicator s standardized value. 14 Developing the Asian Innovation Scoreboard

28 <Table 6> Innovation Framework Conditions in the NIM 2009 (2003, 2008) Framework Condition 2008 Rank 2008 (Index) 2003 (Index) Rank Change United States Iceland Canada Denmark Finland Swaziland United Kingdom Australia Sweden Netherlands Ireland Norway Austria New Zealand Korea, Rep Belgium Germany France Japan Spain Portugal Italy Greece Turkey Mexico * Note 1: Units of indexes are different, so they were standardized for cross comparison. Each index value is related to the distance between the highest ranking and lowest ranking, ranging from 0 to 100 with the value closer to 100 being higher in scores. * Note 2: Each of the 51 policy areas are expressed by one or several indicators. The policy areas are assigned a value calculated by taking the average of each indicator s standardized value. Chapter 2. Cases of Major Science and Technology Innovation Assessments 15

29 <Figure 4> Innovation Competencies by Region Among OECD Countries (2008) The Nordic region excelled the most in ICT in the private and government sectors and among the general public. Their top policy agenda for the past five years was improvement in performance. Their scores were high in civic capacity (utilization of public institutions, Internet banking, e commerce, and Internet usage) and digital accessibility among firms (utilization of e learning in firms). In the category of digitalization, of public institutions, Korea, Denmark, and Sweden were the top three countries. In almost all areas including rates for communications services, infrastructure, employee innovation competencies, data stability, and digitalization of training institutions, Nordic countries such as Denmark, Sweden, Finland and Iceland were in the top three. <Figure 5> Framework Conditions for ICT by Region (2003, 2008) 16 Developing the Asian Innovation Scoreboard

30 Education and knowledge systems throughout the society that fosters knowledge and creativity are closely linked to entrepreneurship, which was the weakest policy area in the Nordic region. By contrast, the U.S., the U.K., and Canada were revealed to be significantly outstanding in both innovation performance and framework conditions. <Figure 6> Framework Conditions for Entrepreneurship by Region (2003, 2008) The Nordic region and leading English speaking countries exhibited similar levels in the quality of human resources, but differences in them were mostly found by a high U.S. score for the indicator measuring knowledge workers. Nordic countries were revealed to excel in organizing and managing innovative technologies among employees, with Denmark ranking first, Iceland second, and Sweden fourth. It is common for work sites in the Nordic region to be in close physical proximity to upper management and focus on creative performance for employees. The Nordic region and English speaking countries focus more on talent development and education, extolling excellence in basic and higher education. That the level of educational framework conditions did not improve to as great a degree as the importance placed on high skilled knowledge workers and that the portion of specialists is not relatively high among the labor force in the Nordic countries are regarded as serious setbacks for the future. Chapter 2. Cases of Major Science and Technology Innovation Assessments 17

31 <Figure 7> Framework Conditions for human resources by Region (2003, 2008) The Nordic region and leading English speaking countries emphasize providing optimal framework conditions for knowledge creation, a critical area of focus among innovation strategies. Knowledge creation is a raw material in the international knowledge economy as a new format, but it cannot be easily identified through the current statistical data. It is measured based on the number of patents and products (knowledge production), which are indicators of conventional knowledge creation, and the level of acquiring technologies among firms (knowledge sharing). Nordic Europe and leading English speaking countries displayed similar levels of it. Competencies of workers in the Nordic region tend to be weaker than those in leading English speaking countries because foreign knowledge workers are not attracted to the Nordic region. <Figure 8> Framework Conditions for Knowledge Creation by Region (2003, 2008) 18 Developing the Asian Innovation Scoreboard

32 3. World Competitiveness Yearbook (WCY) 3) 1) Composition and Methodology World Competitiveness Yearbook (WCY) is a report on county competitiveness annually compiled and released by the International Institute for Management Development (IMD) in Switzerland. The report analyzes a country s capabilities to create and maintain an environment for value creation by firms and prosperity for the public through specific policies and factors. In the report, national competitiveness is defined as a country s capabilities to provide an environment for firms in their territory to maintain their competitiveness. The report analyzes and discloses various related data to entrepreneurs and policy decision makers, and proposes directions to raise the competitiveness of firms and the government. The WCY 2011 evaluated each country s economic management performance, its government s administrative efficiency, firms management efficiency, and development infrastructure targeting 59 countries playing pivotal roles in the global economy. Among the total indicators, the ones reflected in actual assessment totaled 248, that is, 132 quantitative indicators and 116 survey indicators. The WCY 2011 assesses national competitiveness in four categories and each of them is sub divided into the five sub categories as shown in <Table 7>. <Table 7> Assessment Categories and the number of Indicators for the WCY 2011 ECONOMIC PERFORMANCE 78 GOVERNMENT EFFICIENCY Domestic Economy 25 Public Finance BUSINESS EFFICIENCY Productivity and Efficiency International Trade 24 Fiscal Policy 13 Labor Market 23 International Investment 17 Institutional Framework Employment 8 Business Legislation Finance 18 Management Practices 68 INFRASTRUCTURE Basic Infrastructure 25 9 Technological Infrastructure Scientific Infrastructure Health & Environment Prices 4 Societal Framework 12 Attitudes and Values 7 Education 16 Total 331 indicators ) IMD(2011), World Competitiveness Yearbook 2011 Chapter 2. Cases of Major Science and Technology Innovation Assessments 19

33 The WCY 2011 is divided into quantitative and survey indicators. The former are collected from internationally recognized statistical sources for each assessed country, while survey indicators are used to quantify issues that cannot easily be quantified. The content being surveyed reflects corporate executives perception of national competitiveness. The survey targets are executives in top and middle management based in countries being assessed, and questions follow a 1 6 point scale, with scores being converted into a 0 10 point scale for application. For competitiveness assessment, weights for each of the four categories are equal to one fourth of the total competitiveness. The weights for the bottom five subcategories in the four categories are equal. Total competitiveness rankings are derived from the following equation: total 20 bottom ones X 5% = 100%. Statistical indicators have a weight of two thirds of the total competitiveness, and survey sources have a weight of one third of it. The Standard Deviation Method (SDM) is used to calculate the total competitiveness in order to compile indicators that are different in units. The Standardized Value (STD) is calculated for each individual indicator. (STD value)i = x = the value of a specific indicator of a country = the average value of 59 countries for the specific indicator N = the number of countries S = standard deviation For the 20 bottom categories, the STD value of each indicator is compiled to find the bottom rankings. This time, a weight of 1 is given for quantitative indicators and 0.55 for survey indicators. Items without indicator value among quantitative indicators are zero for the STD value. The same 5 percent value is given for the bottom 20 to determine the overall competitiveness rankings. Here, scores are calculated with 100 given for the one that ranks highest and zero for that which ranks lowest. 20 Developing the Asian Innovation Scoreboard

34 <Figure 9> Competitiveness Ranks Among the sub categories, those related to the science and technology competitiveness are the scientific infrastructure and technological infrastructure which are under the category of infrastructure. <Table 8> Indicators for the Scientific infrastructure and Technological infrastructure Scientific Infrastructure Technological Infrastructure Total expenditure on R&D: US$ millions Investment in telecommunications Total expenditure on R&D: % of GDP Fixed telephone lines Total expenditure on R&D per capita Fixed telephone tariffs: US$ per 3 mins local call Business expenditure on R&D: US$ millions Mobile telephone subscribers Business expenditure on R&D: % of GDP Mobile telephone costs: US$ per min local call Total R&D personnel nationwide Communications technology : Survey Total R&D personnel nationwide per capita Connectivity: Survey Total R&D personnel in business enterprise Computers in use Total R&D personnel in business per capita Computers per capita Science degrees: % of total first university degrees in sci & eng Internet users Scientific articles Fixed broadband tariffs: monthly fee(us$) Nobel prizes Broadband subscribers Nobel prizes per capita Internet Bandwidth Speed per internet user (kbps) Patent applications Information technology skills : Survey Patent applications per capita Qualified engineers: Survey Patents granted to residents Technological cooperation : Survey Number of patents in force Public and private sector ventures Scientific Research: Survey Development and application of technology : Survey Researchers and scientists: Survey Funding for technological development : Survey Scientific research legislation : Survey Technological regulation : Survey Intellectual property rights : Survey High tech exports: US$ million Knowledge transfer: Survey High tech exports: % of manufactured exports Innovative capacity: Survey Cyber Security Chapter 2. Cases of Major Science and Technology Innovation Assessments 21

35 2) WCY 2011 Results The WCY 2011 rankings revealed that Hong Kong and the U.S., which ranked second and third in 2010, both ranked first: this was the first time that two countries had ranked first. Singapore, which ranked first the previous year, dropped to third place. The top ten countries were Sweden, Switzerland, Taiwan, Canada, Qatar, Australia, and Germany. Qatar and Germany entered the top ten list by leaping seven and six places respectively. Except for Hong Kong, Singapore, and Taiwan in the top ten, in Asia only the rankings of Korea (23rd 22nd) and Japan (27th 26th) went up from the previous year. However, the rankings dropped for Malaysia (10th 16th), China (18th 19th), Thailand (26th 27th), India (31st 32nd), Indonesia (35th 37th), and the Philippines (39th 41st). <Figure 10> Rankings for National Competitiveness (2010~2011) Besides the ranking for the national competitiveness, the WCY provides rankings for 4 categories, 20 bottom categories and indicators. 22 Developing the Asian Innovation Scoreboard

36 4. Global Competitiveness Report (GCR) 4) 1) Composition and Methodology The World Economic Forum(WEF) assesses the competitiveness of countries every year and publishes the Global Competitiveness Report. It defines national competitiveness as policies, institutions, and overall factors to drive sustainable economic growth and long term prosperity. The WEF s Global Competitiveness Report comprises 3 categories, 12 subcategories, and 111 indicators (79 survey indicators and 32 quantitative indicators). The 3 categories are basic requirements, efficiency enhancers, and innovation and sophistication factors. Basic Requirements Total 46 indicators <Table 9> Composition of GCR Efficiency Enhancers Total 49 Indicators Innovation and Sophistication Factors Total 16 Indicators Institutions 21 Higher education and training 8 Business sophistication 9 Infrastructure 9 Goods market efficiency 16 Innovation 7 Macroeconomic stability 6 Labor market efficiency 9 Health and primary education 10 Financial market development 8 Technological readiness 6 Market size 2 Among the 12 sub categories, those related to the science and technology areas are the Technological readiness and Innovation. The indicators for the two categories are as shown in <Table 10>. <Table 10> Indicators for S&T sub categories Technological Readiness Innovation Availability of latest technologies Survey Capacity for innovation Survey Firm level technology absorption Survey Quality of scientific research institution Survey FDI and technology transfer Survey Company spending on R&D Survey Internet users University industry collaboration in R&D Survey Broadband internet subscriptions Government procurement of advanced technology products Survey Internet bandwidth Availability of scientists and engineers Survey Fixed telephone lines Utility patents Mobile telephone subscriptions Intellectual property protection Survey 4) World Economic Forum, Global Competitiveness Report Chapter 2. Cases of Major Science and Technology Innovation Assessments 23

37 Factors determining national competitiveness vary to a great extent, and the importance of each factor for the development stage of each country is different. Therefore, the Global Competitiveness Report (GCR) applies distinctive methodologies by using different weights for indicators depending on the development stage of each country. For assessment, different methodologies are applied by using different weights for the competitiveness indicators depending on a country s development status, for which Michael Porter s theory is applied: factor driven economy, efficiency driven economy, and innovation driven economy. Each of the 12 sub categories is important for all countries, but their relative importance differs according to each country s development stage. Thus, 12 subcategories are clustered into 3 critical categories in a particular development stage (basic factors, efficiency enhancers, and innovation and sophistication). The basic factors are critical ones for countries in the factor driven stage while efficiency enhancers include areas that are critical for countries in the efficiency driven stage. Innovation and sophistication consist of major areas that are critical for countries in the innovation driven stage. Basic requirements Institutions Infrastructure Macroeconomic stability Health and Primary education) Efficiency enhancers Higher education and training Goods market efficiency Goods market efficiency Financial market development Technological readiness Market size Innovation and sophistication factors Business sophistication Innovation Key for factor driven economics Key for efficiency driven economics Key for innovation driven economics <Figure 11> 12 Pillars of Competitiveness 24 Developing the Asian Innovation Scoreboard

38 For countries in each development stage, different weights are applied for 3 categories as shown in <Table 11>. <Table 11> Weights for Three Categories Depending on Country s Development Stage Stage of Development GDP per capita (US$) thresholds Weight for basic requirements sub index Weight for efficiency enhancers sub index Weight for innovation and sophistication factors sub index Stage 1: Factor driven Transition from Stage 1 to Stage 2 Stage 2: Efficiency driven Transition from Stage 2 to Stage 3 Stage 3: Innovation dri ven <2,000 2,000 2,999 3,000 8,999 9,000 17,000 >17,000 60% 40 60% 40% 20 40% 20% 35% 35 50% 50% 50% 50% 5% 5 10% 10% 10 30% 30% For the development stage of each country, GDP per capita and factor driven levels for each country were measured and categorized. Countries located between each stage are considered as those in the transitional stages. <Table 12> Countries Development Stage for GDP per Capita Stage of Development GDP per Capita(US$) Thresholds Note Stage 1: Factor driven <2, economies Transition from stage 1 to stage 2 2,000 2, economies Stage 2: Efficiency driven 3,000 8, economies Transition from stage 2 to stage 3 9,000 17, economies Stage 3: Innovation driven >17, economies <Table 13> Asian Countries by their Development Stage(2011) Stage 1: (From among a total of 37 economies) Bangladesh Cambodia India Kyrgyz Republic Nepal Pakistan Tajikistan Timor Leste Vietnam Yemen Transition from stage 1 to stage 2 (From among a total of 24 economies) Armenia Azerbaijan Georgia Iran, Islamic Rep. Kazakhstan Mongolia Philippines Qatar Saudi Arabia Sri Lanka Syria Stage 2: Efficiency driven (From among a total of 28 economies) China Indonesia Jordan Malaysia Thailand Transition from stage 2 to stage 3 (From among a total of 18 economies) Lebanon Oman Stage 3: (From among a total of 35 economies) Bahrain Hong Kong Japan Korea, Rep. Singapore Taiwan, China United Arab Emirates Chapter 2. Cases of Major Science and Technology Innovation Assessments 25

39 Among 111 assessment indicators used in 2011, 79 consist of survey items, targeting business executives in 142 countries. Surveys are conducted in the first half of every year using the 0 7 point scale. 2) Global Competitiveness Report In 2011, Switzerland maintained its first place ranking from 2010, followed by Singapore, Sweden, Finland, and the U.S. Top ten countries included Singapore (3rd 2nd), Finland (7th 4th), the Netherlands (8th 7th), Denmark (9th 8th), and the U.K.(12th 10th), all of whose rankings increased slightly year on year. By contrast, the rankings of Sweden (2nd 3rd), Germany (5th 6th), Japan (6th 9th), and the U.S.(4th 5th) went down. In the top 20, Asian countries included Japan, Hong Kong, and Taiwan. 26 Developing the Asian Innovation Scoreboard

40 <Table 14> Rankings for National Competitiveness Country/Economy 2010 Rank 2011 Rank Country/Economics 2010 Rank Switzerland 1 1 Malaysia Singapore 3 2 Israel Sweden 2 3 Luxembourg Finland 7 4 Korea, Rep United State 4 5 New Zealand Germany 5 6 China Netherlands 8 7 United Arab Emirates Denmark 9 8 Brunei Darussalam Japan 6 9 Ireland United Kingdom Iceland Hong Kong SAR Chile Canada Oman Taiwan, China Estonia Qatar Kuwait Belgium Puerto Rico Norway Spain Saudi Arabia Bahrain France Czech Republic Austria Thailand Australia Tunisia Rank Besides the rankings for the national competitiveness, GCR provides rankings for each categories, sub categories and indicators. 5. Global Innovation Index 5) The INSEAD announces the Global Innovation Index(GII) on innovation competencies and the results for 125 countries from around the world every July. The GII assesses innovation enablers and performance for individual countries and determines their average scores. The assessment indexes are divided into 7 categories, 20 sub categories, and 80 indicators. 5) INSEAD, Global Innovation Index 2011 Chapter 2. Cases of Major Science and Technology Innovation Assessments 27

41 <Table 15> GII Index Innovation Input Innovation Output Categories Institutions(9) Human Capacity (14) ICT & Uptake of Infrastructure (11) Market Sophistication (13) Business Sophistication (13) Scientific performance (11) Creative performance (9) Sub categories Political Environment (3), Regulatory Environment (3), Conditions for Business Provided by Public Institutions (3) Education (5), High level Education (6), Research & Development (3) ICT (4), Uptake of Infrastructure (4), General Infrastructure (3) Creditors(4), Investors(4), Trade & Competition(5) Innovation Environment in Firms(4), Innovation Ecosystem(5), Openness to Foreign and Domestic Competition(4) Knowledge Creation(4), Knowledge Effect(3), Knowledge Increase(4) Creative performance(4), Creative Products & Service(5) * Note 1: The numbers in parentheses represent the number of indicators. As a result of the 2011 GII assessment, Switzerland ranked first out of 125 countries, with Sweden, Singapore, Hong Kong and Finland rounding out the top five. The top ten comprised six countries from Europe, two from Asia, and two from North America. Rank Country Score <Table 16> Top 30 Countries in GII(2011) Change in Rank Rank Country Score Change in Rank 1 Switzerland Korea, Rep Sweden Luxembourg Singapore Norway Hong Kong Austria Finland Japan Denmark Australia United States France Canada Estonia Netherlands Belgium United Kingdom Hungary Iceland Qatar Germany Czech Republic Ireland Cyprus Estonia Israel China New Zealand Slovenia Developing the Asian Innovation Scoreboard

42 Switzerland ranked third and second in innovation input and output, respectively, rising three places from the previous year. Sweden, which ranked second overall, ranked first in scientific performance among innovation outputs and ranked second in creative performance. By contrast, Singapore, which ranked third overall, dropped to 17th in innovation output. <Table 17> Top 30 Countries in Innovation Input(2011) Rank County Score Rank Country Score 1 Singapore Netherlands Hong Kong, Korea, Rep Switzerland Japan Ireland Austria Sweden Israel Finland Germany Denmark Belgium Canada Franc Luxembourg Estonia United Kingdom Arab Emirates United States Czech Republic Australia Malaysia Iceland Bahrain Norway Spain New Zealand Cyprus <Table 18> Top 30 Countries in Innovation Output(2011) Rank Country Score Rank Country Score 1 Sweden Hungary Switzerland Singapore Netherlands Norway Germany Qatar U.S.A Estonia Finland France Denmark Ireland Israel Austria United Kingdom Czech Republic Canada Luxembourg Korea Japan Hong Kong Cyprus Iceland Belgium China Moldova New Zealand Slovenia Chapter 2. Cases of Major Science and Technology Innovation Assessments 29

43 In this chapter, we reviewed numbers of science and technology assessments. Having case studies of S&T innovation indicators of advanced countries is important in designing the AIS for two reasons. First, the indicators of advanced countries are a set of standardized core indexes that have been largely agreed upon among the participating countries after long consideration and debate. Second, S&T innovation is not a linear process but requires us to find key issues applicable to contemporary Asian countries out of innovation related issues that have been under discussion in the international arena. Also, the uniqueness of each Asian country should be taken into consideration. To that end, it is necessary to look into the indicators developed in each country in terms of theoretical aspects, as well as in terms of their application to determine what type of indicator is available and which indicator is currently in focus, through consultation with experts in the field. 30 Developing the Asian Innovation Scoreboard

44 Chapter 3 Science, Technology and Innovation in Asia 41 Asian countries for which statistics were available were classified according to their absolute and relative economic size. 7 target countries were selected from among them to examine innovation trends in Asia: Korea, Japan, China, Singapore, Malaysia, India, and Taiwan, as can be seen in <Figure 12>. A close investigation was conducted into their concepts of S&T innovations as defined in their national policy goals, R&D trends, related statistics, and their innovation carry out systems. <Figure 12> Selecting Target Countries <BOX 2: Selection Method of Target Countries> 1) Analysis Criteria Singular values were deleted to avoid data from being biased (mean±3 standard deviation) was regarded as the maximum value (1) GDP: China, Japan GDP per capita: Qatar Absolute economic size Estimated based on the average of the representative value of the GDP for the entire country Chapter 3. Science, Technology and Innovation of Asia 31

45 Relative economic size Estimated based on the average of the representative value of the GDP per capita. 2) Country Type Classification Type A: countries above the average both in the standardized GDP and GDP per capita. Japan, Saudi Arabia, Korea, Taiwan, United Arab Emirates Type B: countries below the average in representative GDP, but above the average in representative GDP per capita. Singapore, Bahrain, Oman, Qatar Type C: countries above the average in representative GDP, but below the average in representative GDP per capita. China, India, Iran, Indonesia, Thailand Type D: countries below the average both in representative GDP and GDP per capita. 27 countries including Malaysia, Vietnam, Kazakhstan, Bangladesh. 1. Korea 1) Overview In the early 1960s, the national income per capita for Korea was an estimated 80 USD, with foreign aid accounting for more than 70 percent of this income. However, Korea has made a great leap forward to a middle level country in only 50 years, and in 2010 it became one of the world s top 10 economies. When Korea previously lacked capital, it employed a unique form of economic development: establishing a business structure that focused on large companies rather than SMEs; and introducing export oriented economic growth policies that concentrated on processing trade due to the relative shortage of natural resources. As a result, Korea has been highly dependent on foreign trade. Furthermore, compared to the level of economic development, the service industry represented a relatively low share in the national economy and has not been sufficiently developed. 2) S&T administrative system From the establishment of the Ministry of Science and Technology in 1967, Korea has formed relevant S&T organizations including the National Science and Technology Commission(NSTC), the Ministry of Education, Science and Technology(MEST) and the Ministry of Knowledge and Economy(MKE). These 32 Developing the Asian Innovation Scoreboard

46 organizations have implemented various S&T related policies and actively conducted national studies to serve their own functions. National Science and Technology Commission (NSTC) With diversified players implementing national S&T policies and increasing investment, the NSTC was reorganized as a presidential administrative commission in March, 2011, in order to strengthen its independency and expertise. The Commission is composed of a Ministerial level official as the Chairperson, General meeting, a Steering Committee, eight Expert Committees, two Councils, and two Special Committees. The Expert Committees include Policy Coordination, Knowledge and Property, Evaluation, Big and Public S&T, Green Resources, Advanced Convergence Technology, Primary Basic Industry and Bioengineering and Welfare. The Councils consist of a Regional S&T Promotion Council and a Basic Science Research Promotion Council, while the Special Committees are composed of a Special Committee on S&T Support for Disaster Management and a Special Committee on Private Military Technology Cooperation. The major duties of the NSTC include: establishing policy goals and strategies for the national S&T, such as a basic S&T Plan; strengthening connections among plans by different Ministries; setting an investment direction for national R&D projects, as well as allocating and coordinating the budget; and supporting the evaluation of national R&D project outcomes (during the revision of the law) and the utilization of such outcomes. Chapter 3. Science, Technology and Innovation of Asia 33

47 <Figure 13> Organizational chart of NSTC Ministry of Education, Science and Technology (MEST) The MEST is the central administrative body that is responsible for a wide range of affairs relating to the promotion of S&T. These include establishing, managing and coordinating human resources development policies; formulating, managing, coordinating and evaluating policies on school education, life long education, academic innovation and S&T innovation; and cooperation in nuclear power and S&T. Priorities for 2011 include the following tasks: spreading creativity and humanity education to strengthen the competitiveness of public education; building up an advanced vocational training system in connection with education and jobs; fostering universities providing good education; nurturing world level S&T talents; establishing a strategic national R&D system; and globalizing Korea s education, and S&T industries. 34 Developing the Asian Innovation Scoreboard

48 3) Major S&T innovation policies Development of S&T innovation policies In the 1960s, the Government of Korea launched the Ministry of Science and Technology in order to lay the foundation for national S&T and R&D, such as R&D facilities and systems. Then it established its First Five year Technology Promotion Plan and legislated laws and regulations to promote S&T; including the legislation of the Science and Technology Promotion Act. During the 1970s, Korea pursued economic development by prioritizing the fostering of capital intensive and technology intensive heavy and chemical industries. Accordingly, as the demand for high quality scientists and technicians gradually increased, the government strived for science and engineering education by establishing the Korea Advanced Institute of Science(KAIS). In the 1980s, Korea promoted S&T policies pursuing structural growth with the goal to develop technology intensive industries and enhance the productivity of the manufacturing industry. In the 1990s, Korea set a goal of taking its S&T to the level of the Group of 7 (G7), in line with the progress of internationalization and globalization. To attain this goal, it made great endeavors at the national level to innovate its S&T structure by creating the Special Act for S&T Innovation (1997) and establishing the Five year Plan for S&T Innovation. During the 2000s, Korea promoted its national level S&T planning, including: The basic S&T Plan(2001); the National S&T Roadmap(2002); Basic S&T Plan by Participatory Government(2003); and The 2nd Basic S&T Plan(2008). 4) Major S&T Statistics National Science and Technology Activity Survey This survey examines current R&D activities (including R&D personnel and expenditure), in order to provide the basic data required for formulating national R&D policies and offer them to the experts of every sector to use this data as reference for their R&D plans. In addition, the survey outcomes of Korea s current Chapter 3. Science, Technology and Innovation of Asia 35

49 R&D activities are presented to the OECD to raise national confidence and are being used as comparative data with other OECD countries. The fields of natural science, engineering and technology, medical science, agricultural science, social science and humanities were determined as survey target fields based on the Frascati Manual of OECD. Humane and social studies were included in the survey in 2008 (the survey target year was 2007). The survey has been conducted on each category of public research institutes, universities, hospitals and businesses via different survey sheets. The survey mainly addressed the following: general overview of the organization including: the form of organization and the total number of employees; R&D related personnel such as researchers and research assistants; the current status of researchers by degree, major, gender and age; and R&D expenditures by financial source, item, R&D stage and technology classification. Survey and Analysis of National R&D This is designed to identify the current development of national R&D activities through comprehensive survey and analysis, and is being used as the basic data for relevant policies and project planning. The survey and analysis targets the detailed projects under the national R&D program, which are drawn up with the R&D budget from the government. It examines the research activities, research performing sectors, region, technology fields, cooperative research, and performance information of national R&D projects. COmposite Science and Technology Innovation Index (COSTII) The composite index and model was developed for comprehensive diagnosis on the S&T innovation capacity in the entire sector. Strength and weaknesses are identified through evaluation based on this index, which is being used to present policy direction for strengthening S&T innovation capacity. The objective is to compare and analyze the S&T innovation level of 30 OECD members based on S&T innovation index and indicators, and precisely identify and evaluate the level of Korea s S&T innovation capacity. The S&T innovation capacity evaluation checks the whole cycle of activities encompassing input, activity and outcome based on the National Innovation System 36 Developing the Asian Innovation Scoreboard

50 (NIS). The index also employs the systematic approach where the innovation capacity of the national S&T is determined by the capacity of each player and effective interactions among different factors. Technology Trade Statistics Survey This survey is designed to produce statistics for Korea s yearly technology trade based on the OECD standard Technology Balance of Payment Manual. It is also designed to identify and monitor changes in the exports and introduction of technologies and the balance and volume of technology trade by year. The systematic management of technology trade statistics database (DB) has helped long term academic research and policy development. When it comes to technology exports, the survey is about businesses in the list obtained from the Bank of Korea (BOK) and organizations identified by the Korea Industrial Technology Association (KITA). The surveyed respondents received questionnaires asking for the organizational and personal information of respondents, as well as the transaction record of technology exports (information on technology introduction entity and terms of technology export contract). The technology introduction is identified based on the data in the Monthly Report on Technology Introduction Payment of BOK, which is obtained through the Ministry of Knowledge and Economy(MOKE). The Monthly Report on Technology Introduction Payment includes and analyzes information such as the name of the introduced technology, type of technology, limitations, ground for payment, technology introduction entity, name of country (technology provider), payment, date of loyalty payment, already paid amount and the total payment. Chapter 3. Science, Technology and Innovation of Asia 37

51 2. Japan 1) Overview Since the adoption of the Budapest Declaration on Science and the Use of Scientific Knowledge, Japan has also adopted new frameworks for S&T, namely the Science and Technology for Society and within Society of the 2nd Basic Plan, and S&T to Be Supported by the Public and to Benefit Society of the 3rd Basic Plan. Japan has promoted S&T policies at the national level as a means to realize the new S&T framework mentioned above. Followed by various discussions to determine the 4th Basic Plan, Japan set its S&T innovation policy as one of the policies for the society and the public. Against this backdrop, Japan has made several achievements that will enhance public interests in S&T: the return of Hayabusa in 2010, which is the spacecraft that collected samples from a small asteroid named Itokawa for 7 years; and the winning of the Nobel Prize in chemistry by Akira Suzuki, Distinguished Professor Emeritus at Hokkaido University and Ei ichi Negishi, Distinguished Professor of Chemistry at Purdue University. 2) S&T Administrative Structure As seen in <Figure 14>, the S&T administrative system of Japan is primarily based on the decision of the Council for S&T Policy(CSTP), where each administrative Ministry implements their own relevant S&T policies. In Japan, S&T policies are determined by the following process in <Figure 15>. The CSTP and the Minister of State for S&T Policy in the Cabinet under the Prime Minister have the leading roles in establishing S&T policies in Japan. These established policies are implemented by the respective divisions in the relevant bodies for corresponding S&T policies. Close cooperation is made with the related administrative ministries to implement policies in a consistent manner. 38 Developing the Asian Innovation Scoreboard

52 <Figure 14> S&T Administrative System in Japan <Figure 15> Decision making Process of S&T Policies in Japan Council for S&T Policy (CSTP) The CSTP was formed within the cabinet as one of four Councils in 2001 with the aim to plan, formulate, put together and coordinate important government policies in the fields of S&T in Japan. The Council is headed by the prime minister and composed of relevant cabinet ministers and experts, etc. The General meeting of CSTP carries out the study and consideration on basic policies on S&T and the allocation of S&T budget and human resources, as well as the evaluation of nationally important R&D projects. Chapter 3. Science, Technology and Innovation of Asia 39

53 Ministry of Education, Culture, Sports, Science and Technology (MEXT) The MEXT is the most crucial ministry that fully controls education and S&T policies in Japan. It develops an S&T development plan, establishes effective policies and draws up detailed R&D plans for each field. In addition, it coordinates the duties of related administrative bodies concerning S&T through the distribution of S&T promotion spending. The ministry also conducts R&D activities in high tech and important S&T sectors and comprehensively performs administrative services to substantially strengthen creative and basic research, while fulfilling functions to evaluate and spread R&D outcomes. Ministry of Economy, Trade and Industry(METI) The METI is the government administration that controls and manages the overall Japanese economy including industrial policies, trade policies, industrial technology and trade. In this context, this ministry is also in charge of all policies and budget management related to such economic activities as (S&T related) industrial policy, S&T development concerning technology innovation, patent, energy policy and SMEs. In particular, the role of the Ministry has become even more important amid the current S&T policies of Japan focusing on innovation that would industrialize S&T. 3) Major S&T Innovation Policies Basic S&T Plan Having launched the 1st Basic Plan in 1996, the 4th Basic Plan is currently being discussed and reviewed in The basic direction of the 1st Basic Plan was to strongly push forward R&D activities to meet social and economic needs and to promote basic research to create intellectual properties. Through these efforts, it made several achievements: support for a Post Doctor system; the facilitation of industryacademy government exchanges through encouraging joint study and permitting the simultaneous performance of research and business; and the realization of doubling funds for the government s R&D investment. 40 Developing the Asian Innovation Scoreboard

54 The basic direction of the 2nd Basic Plan was to promote basic study and to concentrate on R&D that responded to national and social tasks, and thereby strive for strategic emphasis on S&T and S&T system innovation. This plan achieved the following: focus on R&D on four priority sectors (bio technology, information and communications, environment, and Nano technology materials); double competitive funds and introduce indirect expenses (30 percent); initiate an international cooperation project; and internationalize domestic research investment. The 3rd Basic Plan continues to support the objectives of the 2nd Basic Plan, to further strengthen the strategic concentration of S&T and promote S&T system innovation. In addition to the four priority sectors supported from the 2nd Plan, four additional sectors (energy, manufacturing technology, social infrastructure, and frontier) were included to strengthen support for R&D activities which are responsive to policy tasks. In addition, the 3rd Plan supports basic research to strengthen the role of universities to nurture talented human resources, consolidate a system which generates research innovation and creates a competitive research environment. <Figure 16> Flow of Basic S&T Plan Major S&T related Policies S&T Innovation The R&D Capacity Strengthening Act, legislated in 2008, specified the R&D Chapter 3. Science, Technology and Innovation of Asia 41

55 system innovation which ranges from the government s distribution of research funds to the development of research outcomes. Through such innovation, it aimed to strengthen the overall R&D capacities of national universities, public research institutes, independent administrations and private businesses in Japan. The Act also stipulates that innovation should be created and national competitiveness strengthened. Green Innovation and Life Innovation In June 2010, the cabinet meeting created the New Growth Strategy to realize a strong economy. In specific, it saw the response to climate change, realization of low carbon society and the medical and health services responding to the aging population problem as challenges that needed to be addressed at the national level. 'Green Innovation and Life Innovation' were set as the primary solutions to the above challenges. Industry academy collaboration People have recognized the importance of collaboration and connection among different organizations or members within the same organization for continuous innovation. In this context, Japan developed measures to link the research outcomes at universities to the creation of innovation. As part of this effort, Japan promotes joint study programs among universities and businesses, develops an environment where the intellectual property rights of universities can easily be exercised and supports the establishment of venture companies starting out at universities. 4) Major S&T Statistics S&T Indicators The S&T Indicators published by the National Institute of Science and Technology Policy (NISTEP) conducts surveys and comparative research on the performances of domestic and international S&T policy research and trends, in order to support the formulation of national level S&T policies. The S&T indicators provide statistics on R&D expenditures, R&D personnel, advanced education institutes and R&D output 42 Developing the Asian Innovation Scoreboard

56 of countries throughout the world, including Japan. White Paper on Science and Technology and Science and Technology Description Book The White Paper on S&T is the comprehensive survey report on Japan s S&T policies and the S&T Description Book provides statistics on Japan s S&T (R&D expenditure, the number of R&D personnel, research performance, etc.). Both are published by the MEXT. 3. Taiwan 1) Overview Taiwan promoted export oriented industrialization led by small and medium sized national capital. Its industrial development was characterized as the technologyintensive export industry and introduction of technology through direct investment and reverse engineering. As industrialization started to peak in Taiwan during the late 1980s, the advancement of an industrial structure was stimulated. In addition, since the development centering on strategic businesses was pursued, investments concentrated on the electricity, electronics and chemistry sectors. 2) S&T Administrative System The S&T administrative system of Taiwan is a decentralized structure where several ministries share responsibilities: the Office of the President and the Executive Yuan are dual actors in S&T administration. The Academia Sinica is under the Office of the President while the National Science Council (NSC) and several ministries divide S&T development functions under the Executive Yuan. The S&T development system is classified as the S&T administrative system, R&D performance system and planning and evaluation system. The S&T administrative system refers to S&T administrative bodies consisting of the Ministry of Interior (MOI), Ministry of Education (MOE), Ministry of Economic Affairs (MOEA), Ministry of Transportation and Communications (MOTC), Atomic Energy Council (AEC), National Science Council (NSC), Council for Agriculture (COA), Council for Labor Affairs (CLA), Department of Health (DOH), and Environmental Protection Agency (EPA). Chapter 3. Science, Technology and Innovation of Asia 43

57 <Figure 17> Taiwan s Organizational Structure for S&T Promotion National Science Council of Taiwan (NSC) In 1959, the Long term National Science Development Council was founded as the first S&T administrative body in Taiwan. In 1967, the Science Development Steering Committee was established under the National Security Council at the Office of the President. Afterwards, the Long term National Science Development Council was reorganized as the National Science Council (Executive Yuan), and became the highest standing organization charged with the planning, coordination and execution of the nation s S&T related affairs. The NSC is responsible for the following: planning of policies, strategies, plans and mid and long term tasks for S&T development; developing a promotion plan for basic and applied research; improving the entire research environment; nurturing the work force; and evaluating the S&T tasks of government Ministries. In addition, from 1982 the NSC has been in charge of developing science based industrial parks. Science & Technology Advisory Group, the Executive Yuan (STAG) In 1979, the Executive Yuan promulgated the S&T Development Program and formed the Science & Technology Advisory Group (STAG) to effectively implement the Program and strengthen S&T advisory functions for the Premier of the Executive Yuan. In this regard, S&T experts with international reputations and administrative experience have been hired as advisers to monitor the direction and progress of S&T policies. As the S&T plans of Taiwan are delivered under the principles of 44 Developing the Asian Innovation Scoreboard

58 comprehensive planning and shared responsibilities. Mid and long term S&T plans drawn up through NSC have been implemented under the leadership and responsibility of each ministry. The S&T performing bodies include academic research institutes, governmentfunded research institutes, research foundations and corporate research institutes. Among them, academic research institutes are composed of the Academia Sinica, a central research institute and auxiliary research institutes within universities that primarily perform basic research and application studies. The research foundation principally studies industrial technology and includes the Industrial Technology Research Institute, a representative research foundation. As for the corporate research institutes, they largely carry out studies on commercialization based on the characteristics of businesses. 3) Major S&T Policies Primary S&T Innovation Policies before the 1980s In 1959, the Executive Yuan approved the Guidelines on Long term National Science Development Programs, the 1st long term and specific S&T policies with the goal of expanding a foundation for the development of science. In 1968, a Twelveyear National Scientific Development Program( ) was formulated through which Taiwan aimed to improve science education at all school levels, develop both basic and applied research together, and connect S&T to the national development demand. National Science and Technology Development Program ( ) In the 8th NSC meeting in Jan. 2009, the National Science and Technology Development Plan ( ) was issued, which would be the groundwork for strengthening S&T policies and R&D activities in Taiwan for the next four years. In the Plan, the NSC laid out six major objectives: strengthening knowledge innovation systems, creating competitive advantages for industries, enhancing citizens quality of life, promoting sustainable development for the nation, raising the public s capabilities in S&T, and reinforcing the nation s autonomous defense technologies. It Chapter 3. Science, Technology and Innovation of Asia 45

59 also included 6 major strategies to attain the above objectives: Strategy 1: integrate people and technology to improve quality of life Strategy 2: train S&T human resources Strategy 3: provide a stable foundation for legal and regulatory systems through the integration of S&T resources Strategy 4: pursue academic achievements that reflect social interests Strategy 5: strengthen technology innovation by improving the industrial environment Strategy 6: connect technological capacities by pursuing sustainable development STAG Meeting The STAG has organized a meeting each year since the 1980s to provide advice on S&T administration and important plans. For example, the 29th STAG meeting in 2009 was held under the theme How to Stimulate six Emerging Primary Industries. The Taiwanese government proposed detailed strategies for diversification, exporting products and the learning of major technologies. The Executive Yuan selected six industrial sectors including agricultural quality, medical service, cultural industry, tourism, green energy and bio technology to develop detailed measures for promoting industrial development and provide a better life for the public. 4) Major S&T Statistics S&T Activity Survey NSC has conducted this survey every year since 1981 to examine the R&D activities of business, government, universities and non profit private sectors within Taiwan. The survey includes Taiwan s R&D input and output, comparison of international S&T activities, domestic R&D expenditure and human resources, the government s R&D budget, S&T performances as well as data related to science parks. 46 Developing the Asian Innovation Scoreboard

60 4. Singapore 1) Overview Because of its geographical advantage, Singapore has enjoyed prosperity for some time through trading. It has also made a successful transition from a labor intensive consumer goods manufacturer and exporter to a leading player in the bio medical industry. Until the beginning stages of industrialization in the mid 1970s, the country was highly dependent on multinational companies. However, beginning in the late 1980s, public research organizations actively carried out R&D activities. Furthermore, the importance of BT, IT and other high tech based industries and technological capacity has put more emphasis on relevant S&T policies from the late 1990s. 2) S&T Administrative System Ministry of Trade and Industry(MTI) and ASTAR Singapore has no dedicated Ministry for S&T administration and the Ministry of Trade and Industry(MTI) supports the establishment of general S&T policies and related programs. Although the Ministry of Science and Technology was founded in 1968, it was repealed in Accordingly, a knowledge community was created consisting of government officials, relevant experts from universities and international experts, replacing a complex and bureaucratic organization in a ministerial form. From 1991, the National Science and Technology Board (NSTB) under MTI had formulated the National Technology Plan and National R&D Strategy on a five year basis. It had fulfilled numerous responsibilities including: management of public research institutes and allocation of funds; operation of a support system for stimulating R&D investment in the private sector; laying a foundation for S&T; and providing a technology information service. On top of NSTB, the Economic Development Board (EDB) is in charge of R&D businesses related to the industrial sector. In 2001, the NSTB was renamed Agency of Science, Technology and Research (ASTAR) and became a substantial managing and executing organization for S&T promotion with a focus on science, engineering and bio medical research. Since then, the ASTAR has been charged with S&T coordination in the public sector, while the Chapter 3. Science, Technology and Innovation of Asia 47

61 EDB is responsible for the private sector. Ministry of Education (MOE) The Ministry of Education (MOE) manages two universities including the National University of Singapore (NUS) and Nanyang Technological University (NTU) as well as four technical colleges including Nanuang Technological University, Ngee Ann Polytechnic, Singapore Technological University and Temasek Polytechnic. Since a portion of tuition fees are supported by the government, the investment in universities accounts for 22.4 percent of total public spending. The MOE also manages the Human Resources Development (HRD), which determines the number of agencies and the budget support for training the technological workforce in secondary and tertiary organizations. 3) Major S&T Innovation Policies Flow of S&T Innovation Policies From 1980 to 1991, the government of Singapore played a leading role in domestic technology development and strengthened innovation policies to support SMEs development and the positive spillover effect from foreign companies. After 1991, the government s role has become even more important in furthering domestic R&D activities of both foreign and local companies, as well as in establishing such organizations as the NSTB. Singapore has since developed and tried a variety of policies to strengthen domestic S&T research by foreign and local companies. In 2010, Singapore set a long term goal and emphasized an economic transition to research innovation and new growth engines for creating high value jobs and strengthening industrial competitiveness through a research intensive, innovative and entrepreneur based economy. In addition, the government plans to make 1.6 billion SGD in R&D from , which accounts for one percent of its national GDP (currently government investment in R&D is 0.9 percent). Main points of S&T Innovation Policy After the 1960s, the government of Singapore increased training programs to build 48 Developing the Asian Innovation Scoreboard

62 a technological capacity platform for its workforce and increase the supply of local technicians and engineers who could be recruited by foreign companies. As economic development has stressed the importance of advanced education, Singapore s education system has primarily focused on S&T sectors: 75 percent of new technical college students and 62 percent of new university students are science and engineering majors, including degrees in engineering, information technology, architecture, civil engineering, health physics and application S&T. Singapore has also strengthened its technological infrastructure by establishing research institutes and research centers. From 1991, the NSTB founded 13 research institutes and centers that concentrated on their specific fields. These research agencies performed not only R&D but also HRD activities. From 1991, the government of Singapore has operated diverse incentives schemes including the Research Incentive Scheme for Companies (RISC), Innovation Development Scheme (IDS), Cluster Development Fund (CDF), Patent Application Fund Plus (PAF Plus) and Technology for Enterprise Capability Upgrading (T Up). In addition, the government provided various types of tax benefits as financial incentives to foreign and local companies that perform S&T research. In 1983 Singapore became the first country among developing countries to introduce venture capital. Now, 60 percent of the total venture capital is granted to technology based companies in the fields of computer, electronics and electricity, information technology, bio technology along with telecommunications. Since the Foreign Direct Investment (FDI) had positive effects on local SMEs, Singapore has strengthened its technology infrastructures for local SMEs and provided foreign companies the ability to offer input and other services. In addition, through the Local Industry Upgrade Program (LIUP), the government of Singapore encourages multinational companies to hire local SMEs for technology transfer while the Economic Development Administration encourages cooperation with the industry and strategic partnerships. In this way, promising local SMEs can benefit from cooperation with multinational or other domestic companies. Chapter 3. Science, Technology and Innovation of Asia 49

63 4) Major S&T Statistics National R&D Survey in Singapore Based on the survey conducted by the Singapore Science Council every three years from 1978 to 1987, ASTAR carried out its R&D survey every year since the late 1990s. The survey targets all organizations registered as R&D performing agencies (excluding human and social studies). In the 2009 survey, 60 public research agencies and 1,377 private research companies registered to perform R&D. As a result, the public research institutes responded 100 percent, while 854 companies, or 61 percent of private research bodies, said they carried out R&D in In addition, 262 companies (19 percent) reported not executing R&D or business closing, while 264 companies (19 percent) didn t respond at all. 5. China 1) Overview Since opening its market in 1978, China has repeatedly faced economic ups and downs and gone through conventional economic cycles such as high economic growth, inflation, tightening policies and economic downturns. In recent years, however, it has maintained a stable economy backed by advanced industries, increased exports, enhanced government control over the macro economy and a growing inflow of foreign investment. Its GDP for 2010 grew to CNY trillion, with a 10.3 percent growth rate, which is the second highest in the world. China s GDP per capita also soared to 29,748 CNY, an increase of 10.6 percent from the year before. 2) S&T Administrative System China has a highly concentrated S&T administrative system, where the specific ministry under the State Council the most senior administrative body is granted the authority to formulate S&T development policy, manage S&T activities and related production activities and distribute resources. As the principal ministry for the S&T sector, the Ministry of Science and Technology (MOST), is charged with the establishment of nationwide S&T policies 50 Developing the Asian Innovation Scoreboard

64 and the macro management of S&T activities and affairs. In addition, the affiliated organizations under the State Council, such as the National Natural Science Fund Committee, Chinese Academy of Sciences(CAS), Chinese Aeronautical Establishment, China Association for Science and Technology participate in the formulation of S&T policies and relevant duties in cooperation with the MOST. Ministry of Science and Technology(MOST) The MOST is responsible for the comprehensive management of S&T policies in China and mainly performs the following: establishing the S&T Development Plan and related policies; evaluating and spreading major R&D outcomes; distributing R&D spending and facilities; and participating in international exchanges of S&T. At the top of the MOST, other affiliated organizations under the State Council, including the National Natural Science Fund Committee, the CAS, the Chinese Aeronautical Establishment and the China Association for Science and Technology all play roles as advisors to the nation s S&T direction and policies. They are also involved in managing certain S&T research activities. Chinese Academy of Sciences (CAS) The CAS is China s best research and evaluation body, academic institution and advisory agency in terms of S&T. It was established on the foundation of the People s Republic of China (Nov. 1949). From the 1950s and 60s, the CAS mainly concentrated on the development of urgent technologies required for its national defense and production. As a result, it successfully delivered Nuclear Bomb, Missile and Satellite programs, as well as aerospace projects. These helped to raise national prestige, independent defense and S&T. From 2002, the CAS has placed its focus on basic research and shifted its direction in a way as to contribute to fundamental, strategic, and leading innovation for the sustainable development of China. In this regard, the CAS largely carries out basic research, applied research, high tech research and plays a great role in spreading and commercializing research outcomes, nurturing talent and international exchanges as well. Chapter 3. Science, Technology and Innovation of Asia 51

65 3) Major S&T Innovation Polices Development of S&T Policies S&T policies in China have been greatly influenced and steered by the political ideology of the Chinese Communist Party. In this light, China s S&T policies can be classified in four phases to identify the major developments and changes. Stage 1: Defense and production oriented S&T policies ( ) In its early incarnation after the foundation, the Chinese government recognized the development of natural science, encouragement of scientific invention and finding, and distribution of scientific knowledge for establishing industry, agriculture and national defense as important components of building the nation. Therefore, it pushed forward S&T policies aimed at strengthening production and national defense. In particular, as the relationship between the old Soviet Union and China deteriorated in the late 1950s, China became part of more complex international surroundings. In a situation where the protection of national sovereignty and land emerged as the nation s central task, the strengthening of defense became an essential part in China s S&T policies. Stage 2: S&T policies focusing on economic development ( ) The National S&T conference held in Mar first suggested the concept that S&T Leads to Product Capacity and a shift began in the national S&T development strategy. It defined the principles that S&T should serve economic development and S&T, with the economy and society preferably being developed in harmony. Accordingly, the government formulated a series of S&T development policies, laws and regulations intended to build China s economy. At the same time, in line with changes in its economic system, China faced increasing problems in its S&T system, including the separate development of S&T from production and education in addition to any weaknesses in industrial technology. China decided to reform its S&T system to meet the market economy by shifting its paradigm from defense oriented to economy oriented. 52 Developing the Asian Innovation Scoreboard

66 Stage 3: Science education boosts the nation strategy ( ) In the 1990s, rapid development of S&T made the world recognize the importance of the knowledge based economy. Plus, in the ever intensifying competition of national power, the focus was placed on human talents and education. At the National S&T conference in 1995, China submitted the Science education boosts the nation s strategy and presented the goal of achieving S&T based economic development. This emphasized overall social development and the enhancement of wide ranging national powers as well as realizing the harmonious development of the economy, society and ecosystems. Stage 4: Autonomous Innovation strategy (2006 present) Since its opening and reform, China has maintained an economic growth with an annual average close to 10 percent. As a result, China appeared to have reached the Limits to Growth : China s economy has quickly grown but its employment rate has slowed since the 1980s. Related problems included serious environmental degradation, imbalance in the ecosystem, a gap between the rich and poor and the dominance of core technologies and industrial standards for the manufacturing industry by foreign companies, which placed local companies at the bottom of the value chain. Faced with such challenges, the Chinese government presented Harmonious and consistent science development based on humanism and actively sought for development strategies based on autonomous innovation and balanced development. In 2006, China officially announced the outline of the National Programme for Medium and Long Term Science and Technology Development Plan (2006~2020) and implemented strategies for autonomous innovation in addition to becoming an innovative power. The 12th National 5 year Plan on S&T Development In July 2011, the MOST officially announced the 12th National Five year Plan on S&T Development. The general objectives of this plan are: to greatly enhance autonomous innovation capacity; to strengthen S&T competitiveness and international influence; to achieve significant results in securing core technologies for priority sectors; and to support the acceleration of economic development. In addition, the Chapter 3. Science, Technology and Innovation of Asia 53

67 plan aimed at building up a national innovation system with clear functions, a reasonable structure and high efficiency. By doing so, it plans to make a substantial step forward in constructing an innovative country by raising its ranking in the national comprehensive innovation capacity from its current spot of 21st to 18th place, and enhancing the S&T progress contribution rate to 55 percent. <Table19> displays the detailed goals. <Table 19> Major S&T development indicators for the period of 12th five year plan Indicators Share of R&D expenditure to GDP (percent) R&D Personnel per 10,000 employees (annual number of people) World rank for citation of SCI papers 8 5 Invention patent holder per 10,000 people Application for patent by R&D personnel(case/annual 100 people) Total transaction contract of national technology market (100 million CHY) Share of high tech industry in manufacturing industry (percent) Citizen with basic scientific knowledge (percent) World rank for national comprehensive innovation capacity ) Major S&T Statistics Under the leadership of the National Statistics Bureau, the MOST is responsible for the statistical survey and analysis on S&T related activities in China, provision of S&T statistics, study on statistics and indicators as well as the monitoring of statistical affairs. The survey targets organizations and businesses involving in R&D activities. In specific, industrial companies, government research centers, universities and those organizations and companies who carry out R&D activities in the relatively R&D concentrated sectors (agriculture, forestry, fishery, construction business, logistics, postal service, information transmission, computer service and software business, financial service, rental and business service, scientific research, technology service, geological exploration, hydropower, environment and public facilities 54 Developing the Asian Innovation Scoreboard

68 management, welfare, social security and well being, culture, sports and entertainment, etc.). The survey mainly addresses the R&D activities of industrial companies, government research centers and universities, application and acquisition of patents, production and R&D of high tech companies, publication of SCI papers, export and import of high tech products, transaction in the technology market, main economic indicators of advanced technology companies in the development district in addition to the expert technology workforce of state owned organizations and companies. 6. India 1) Overview India has made an economic leap forward with its market opening policy in the early 1990s and drawn worldwide attention by being recognized as CHINDIA and BRICs. As of 2011, India s population surpassed 1.2 billion to become the world s 2nd largest population. India also became one of the fastest growing countries along with China. In particular, India s technology development in ICT and pharmaceutics has led its fast economic growth and placed more importance on public R&D. Accordingly, public R&D is pushing initiatives that focus on commercial and market perspectives. In addition, in order to achieve quantitative and qualitative improvement of its scientific workforce, the Indian government is attracting a third agency to concentrate on science and engineering education. The number of foreign R&D centers has skyrocketed to about 750 in 2009, from less than 100 in 2003, of which most are involved in ICT, automation and pharmaceutics. Recently, there have been several investment takeovers in overseas technology based companies in the medium tech or high tech sectors. 2) S&T Administrative System Early Administrative Structure After India s independence in 1947, India formulated various systems and programs to facilitate S&T development, which has resulted in the foundation of Chapter 3. Science, Technology and Innovation of Asia 55

69 many S&T departments and labs. This was helped by the establishment of the Scientific Policy Resolution in 1958 by the government of India. The Department of Atomic Energy (DAE), the Department of Science and Technology (DST) and the Department of Space (DOS) were the S&T related government organizations at an earlier stage, and then research organizations such as the Council of Scientific & Industrial Research (CSIR) were additionally established. Since the private sector has difficulty in leading S&T development in India, the government has taken the lead in forming a wide range of S&T networks, and developing an excellent S&T workforce and scientific footings. S&T Departments in Central Government The Department of Science and Technology(DST) is responsible for making and executing S&T policies, providing policy support for national research institutes or organizations in addition to advice for high ranking bodies such as the Prime Minister s Science Advisory Committee. In addition, the State Council for Science and Technology has been established in 24 states so as to promote collaboration with the National Planning Committee and State Governments. The Department of Atomic Energy (DAE) is charged with establishing a safe and economical nuclear power facility, by utilizing the uranium of India, and supports basic studies related to nuclear energy and other updated scientific areas. The department fulfills a comprehensive role ranging from R&D to the operation of businesses related to nuclear power. The Department of Space(DOS) carries out research on the application of space and science as well as space technology through India s space research organization. This organization is designed to meet not only military needs, but also the demands of various sectors including education, medical service, communications and weather forecast through the use of satellite technology. The Department of Biotechnology(DBT) executes diverse policies for bio technology development at the national level. The Defense Research and Development Organization(DRDO) is the affiliated organization under the Department of Defense, which is in charge of various defenserelated technologies including aviation, theater weapons and fighters. The Ministry of Earth Science(MOES) forecasts diverse phenomena and provides 56 Developing the Asian Innovation Scoreboard

70 relevant services related to the earth including atmospheric, marine and terrestrial conditions as well as tsunamis. The Indian Council of Medical Research(ICMR) is an affiliated agency under the Ministry of Health and Family Welfare that organizes, coordinates and implements research on biomedical science in India. The Council of Scientific and Industrial Research(CSIR) is under the Department of Scientific and Industrial Research(DSIR) s umbrella with 40 R&D agencies and 100 field stations. While the DST mainly focuses on supporting policies, budget and R&D programs, the DSIR supports R&D activities and the CSIR executes actual R&D activities. In specific, the DSIR supports programs for conducting R&D and securing India s technologies in the industrial sector, the national information system for S&T and the relevant system for strengthening the effectiveness of technology transfer. 3) Major S&T Innovation Policies Flow of S&T Policies The Scientific Policy Resolution adopted in 1958 is the first attempt by India to bring about technological progress and change in its industry. In 1983, the Indian government issued the Technology Policy Statement with an aim to develop local technologies in addition to effectively adopting and applying foreign technologies. In Jan. 2003, India s Prime Minister officially announced that research in India increased to 2.0 percent of its GDP, from 0.80 percent in 2003, until the completion of its 10th 5 year plan in Although India failed to attain this goal by recording 0.88 percent, it found the following four characteristics: 1) the number of scientists and engineers were smaller compared to the total population; 2) the necessity of managing a brain drain was recognized and therefore a clear statement had to be issued; 3) the importance of both domestic and international patents needed to be emphasized; 4) monitoring and review mechanisms were in need of highlighting based on efficiency, transparency and scientific methods. Chapter 3. Science, Technology and Innovation of Asia 57

71 S&T Policy of 2003 The S&T Policy of 2003 displayed the basis of recent S&T policies that built upon the Scientific Policy Resolution of 1958 and the Technology Policy Statement of It stressed the social and economic implications of S&T policies and consisted of forewords, policy goals and strategic plans of action. 11th five year plan ( ) The 11th five year plan emphasized innovation with the following eight objectives: The national mechanism should formulate policies and consolidate the foundation for charting a course of basic research; In order to expand the S&T workforce and strengthen infrastructures, the government should actively attract young talent with the necessary scientific backgrounds; The government should initiate tasks in the fields of regional water supply development, sanitary facilitation, health care provision, communications and education management as its primary programs; Research facilities and excellent research centers need to be established to gain global competitiveness; Innovation should be reinforced by highlighting the importance of R&D to scientists; A new model should be developed for the public private partnership in advanced education organizations, especially in university research and in the high tech sector; Methodology and tools that can play a trigger role in industry university cooperation should be identified; Cooperation with advanced countries should be promoted in international big science projects such as the Large Hadron Collider project of CERN, international atomic fusion and nuclear reactor projects along with the rice genome project in Japan. Patent Act in India The Indian Patent Act is a recent policy change that took effect on Jan. 1st The act outlined major changes including the acknowledgement of patents for both 58 Developing the Asian Innovation Scoreboard

72 products and processes since the past act of 1970 had not recognized the sole patent rights for processes. This act was adopted in compliance with the TRIPS of WTO. According to TRIPS and Declaration on Public Health, India was given the obligation to export medicines to countries with no market capability and Indian companies were tasked with exporting AIDS cures to Asian, that is Southeast Asian countries. 4) Major S&T Statistics R&D Statistics in India The Ministry of Science and Technology(MST) in India has been conducting its national survey every two years since its first survey during The collected data has been used for major publications of the ministry including R&D statistics, industrial R&D and R&D directory. The survey targets the affiliated organizations of the MST, private companies performing R&D and S&T agencies in India. For the survey, a total of 2,700 organizations were surveyed. The R&D statistics from were published in May 2009 and were based on the survey results for the period of It included the analysis of R&D expenditures and human resources by player, objective, research field, industrial group, qualification, activity and gender. 7. Malaysia 1) Overview Malaysia is a newly growing Asian nation, changing into a technology led and high tech based economy, and largely follows in the footstep of Asian newly industrializing economies (NIEs). 2) S&T Administrative System National Council for Scientific Research and Development (NCSRD) The NCSRD is an advisory body for S&T consisting of public and private experts, Chapter 3. Science, Technology and Innovation of Asia 59

73 which was founded in 1975 to coordinate and supervise the S&T activities conducted by respective ministries. It provides advice for the establishment of S&T policies, prioritization, coordination, execution and evaluation of S&T activities, public as well as private sector utilization of S&T, and popularization of S&T. Under the NCSRD are two steering committees, the Committee on S&T Development and Management and the Coordinating Committee on the Intensification of Research in Priority Areas (IRPA). The Committee on S&T Development and Management has working committees for each area including hightech manufacturing, new material, BT, energy and NT IT which are responsible for formulating mid and long term development plans for corresponding technologies (conferences, workshops, forums and interdepartmental coordination). As for the Coordinating Committee on the IRPA, it forms area specific panels for agriculture, industry, medical, social science and strategic industry to perform its duties for enhancing the quality of research through funding for research as well as monitoring and evaluation. <Figure 18> NCSRD organization chart Ministry of Science, Technology & Innovation (MOSTI) The MOSTI is playing a central role in establishing policies and plans on national S&T development. It functions as the Secretariat of NCSRD, by formulating S&T policy, making prioritization, coordinating, executing and evaluating S&T activities, managing the use of S&T in the public and private sectors as well as popularizing 60 Developing the Asian Innovation Scoreboard

74 S&T. The MOSTI is divided into two departments: policy and science. Under the policy department are the planning bureau, the innovation and commercialization bureau, the international affairs bureau, and the Malaysia S&T information center. The science department consists of the ICT policy bureau; the national biotechnology bureau; the space, oceanic and atmosphere bureau; the essential S&T bureau; and the industrial bureau. The MOSTI is divided into a number of Administrations and connects to a raft of government owned companies since it is in charge of not only S&T, but also ICT, the industrial sector as well as oceanic and meteorological services. As for other Ministries, Malaysia has the Ministry of Education(MOE) in charge of the national education system (excluding higher education) while the Ministry of Higher Education (MOHE) manages universities and colleges. Furthermore, there are other relevant Ministries: the Ministry of National Resources and Environment (MNRE); the Ministry of Energy, Green Technology and Water (MEGTW); the Ministry of Agriculture (MOA); the Ministry of International Trade and Industry (MITI); the Ministry of Plantation Industries and Commodities (MPIC); and finally the Ministry of Health (MOH). 3) Major S&T Innovation Policies Objectives of S&T Policies In Malaysia, various national S&T policies have been formulated to raise the nation s economic status and improve citizen s quality of life. The main vision of S&T policies is to develop and utilize the S&T required for attaining the goal specified in Vision 2020 (joining the ranks of advanced countries by 2020), and thereby enhancing national competitiveness and achieving innovative economic development. Accordingly, the objectives of S&T are to develop S&T and to maximize the use of S&T, thus securing continuous economic development and an improved quality of life in addition to national security. The following are detailed goals: Increasing the national capacity to expedite R&D, technology development and Chapter 3. Science, Technology and Innovation of Asia 61

75 technology acquisition Encouraging joint technology development to facilitate indigenous technology through cooperation among domestic and overseas companies, as well as among public research institutes and industries Developing S&T to develop products, improve production processes and resolve technical difficulties, thereby promoting to add values throughout the entire industry and maximizing social and economic benefits Becoming a leading country in the core strategic knowledge industry including biotechnology, high tech material design/production, high tech manufacturing, the electronic industry, ICT, aerospace engineering, energy, pharmaceutics, nano technology and optical technology Raising public awareness of the necessity of lifelong learning and the concept that S&T is the key to future prosperity Encouraging to develop new knowledge that can be commercialized S&T Development Implementation Strategies Malaysia selected 7 Main Tasks and establishes 55 concrete implementation plans in its national S&T policy. The 7 Main Tasks are as followed: Task 1: strengthening its research and technology capacity Since the introduction of the IRPA in 1988, the government R&D investment has soared, but still stands at 0.5% of the GDP. In order to keep pace with the international trends of S&T development, more S&T investment is required. Task 2: enhancing the commercialization of research outcomes The fundamental goal of the national R&D project is to successfully commercialize R&D outcomes. To this end, Malaysia focuses on the introduction of a new technology innovation system and a corresponding incentive scheme for effective implementation Task 3: developing human resources In order to meet the demands of scientists in need, Malaysia should expand the pool of human resources on a large scale. S&T personnel is lacking by 20 30% in almost every sector including science, engineering and technology. 62 Developing the Asian Innovation Scoreboard

76 Task 4: promoting cultures for science, technology innovation and technology entrepreneurship Raising public awareness of S&T will allow for effective response to drastic social changes. In addition, the policies should be established and implemented to create an environment where invention, technology innovation and entrepreneurship are acknowledged. Task 5: strengthening management of the S&T system and monitoring of S&T policy implementation The necessity of effective system reform was recognized to manage national S&T tasks. In particular, rapid technology advancement in the bioengineering sector should accompany the establishment of social norms and ethics that can accommodate ethical and moral issues. Task 6: ensuring wide technology expansion through market led R&D In order to maximize the effects of market led R&D, systems should be placed where the private sector can actively carry out R&D activities and be able to facilitate venture business in the long term, while research agencies can conduct R&D meeting the demands of industries. Task 7: securing development capacities for future core technology Malaysia will develop new technologies in line with technology and market changes, and for the application, maintain a vibrant and competitive industrial economy through a forward looking approach toward future core technologies. 4) S&T major statistics National R&D survey The national R&D survey is the representative survey conducted by the Malaysia S&T Information Center every two years. The results of survey is published as the National R&D Survey Report, examining R&D activities of the Government Research Institute (GRI), universities and private companies. Additionally, there is an S&T Indicator Report published every other year based on the national R&D survey, national consciousness survey on S&T and data from Chapter 3. Science, Technology and Innovation of Asia 63

77 related Ministries. The report includes data on S&T education, human resources, public support for S&T, R&D activities, S&T innovation, intellectual property, ICT, BT, relevant papers and public awareness research on S&T. 64 Developing the Asian Innovation Scoreboard

78 Chapter 4 Developing the Asian Innovation Scoreboard 1 Development and Application of Science and Technology Indicators In order to check the level of science and technology of a country, it is necessary to select comparable indicators that can represent the country s science and technology and set up a framework with which to make systematic comparisons. However, it is not easy to find and define representative performance indicators as their effects appear only after a certain period of time unlike the economic achievements. Although a successful indicator should be clear without an excessive simplification process, each indicator has its own strengths and weaknesses, and inevitably reflects only a part of very complicated social and economic phenomenon. After all, the indicators should be selected differently, depending on what the questions or problems are, and should consider the context surrounding them. (Tijssen & Hollanders, 2006:3, Grupp & Mogee, 2004). However, individual science and technology indicators are usually not expressed in monetary terms, but rather are measured in units like patent counts, innovation counts, or number of paper citations and may not be comparable to each other. As a well defined correspondence between relevant S&T data is lacking, the multidimensional profiles cannot be easily aggregated into an overall scalar figure (Grupp & Schubert, 2010: 69). Thus, in many studies, input related R&D expenditure, which is relatively clear as a traditional indicator, and data analysis concerning output related patent and publication data have been used widely (Lavoie, 2007). Among indicators used in science and technology, representative input related indicators are government investment as a percentage of GDP, private investment, and R&D intensity. Representative performance related indicators are the number of patents, papers and citation frequency. Especially, thanks to the use of the Frascati Manual, OECD countries have come to use a relatively common framework for collection of R&D related indicators and relevant statistics. However, discussions on science and technology, and R&D, based on the linear model started recognizing their limitations and included the perspective of Chapter 4. Developing the Asian Innovation Scoreboard 65

79 innovations, expanding their area to non R&D sectors, management ability, such as entrepreneurship, process improvement, interaction, state owned resources and institutional characteristics (Grupp&Mogee, 2004). More so than others, the EU and the OECD started using Science, Technology and Innovation (STI) as a unit. The innovation policies, which first started getting attention in the mid 1990s, began with science and technology policies (OECD, 2006). If the first generation of innovation policies focused on provision of support for science based research carried out mostly by universities and government run research institutes stressing science push or a linear model, its second generation policies adopted a demand led perspective based on the interaction between users and producers of innovation; named the National Innovation System (NIS). Its third generation policies stressed strong linkage with entrepreneurship as an important component of the NIS, pursuing horizontality and coordination and integration between innovation and other sectors (Lindholm, Stevenson, 2007; 2 3). Under such background, researchers started recognizing innovation as a process influenced by diverse factors, such as science, research, finance, regulation and policies, while paying attention to each country s inherent characteristics. Accordingly, the scope to be covered by science and technology related innovation indicators has gone beyond simple R&D, and expanded to human resources and education policies (policies related to education, training, life long learning, immigration policies, etc), process innovation in key industry players, such as SMEs, infrastructural venture capital and framework conditions comprised by political systems. Such indicators with a new perspective connote innovation and innovation capability that is not quantifiable or cannot be measured directly, and has to be used to measure potential variables (Frietsch, 2006). Innovation indicators are often indirect, because the underlying phenomenon of interest, innovation, is intangible or not directly observable (Grupp & Schubert, 2010: 68). Thus, the measurement of science, technology and innovation has become a much more difficult subject. 66 Developing the Asian Innovation Scoreboard

80 Source: Frietsch(2006) <Figure19> The heuristic model of national innovation systems The reason for the growing emphasis on the influence and importance of science and technology indicators is an increase in the demand for their use concerning policies. Customers of science and technology indicators have become diversified and expanded to the EU nations, support organizations and researchers. Such customers came to need indicators to evaluate their positions, define their strategic policymaking processes, and support their interest. That is to say, indicators became part of political debates and struggle for power and thus an arena of brisk criticisms and debates 6) (Lepori, et al., 2008: 36). Under such circumstances, attempts have been made to apply benchmarking or score boarding, which were frequently used in strategic decisions of microscopic businesses or single projects. Benchmarking is important in a political context. A policymaker needs to know each country s status quo, along with its detailed merits and demerits. They exist only as relative concepts. A country judged to be good in 6) The problem of economy crisis and resources evoked the problem on the responsibility on the efficiency of R&D expanded by the support in the public sector; it became the background for introducing performance evaluation systems from many countries. Ultimately, the discussions on selection and concentration was introduced in R&D investment which also gave rise to introduction to the interest groups which tries gain R&D and national government and ministries that tries to promote the performance of their own country. Chapter 4. Developing the Asian Innovation Scoreboard 67

81 a scoreboard, functions as the best practice case, with its successful R&D policy recognized. (Schibany & Streicher, 2008: 717). However, the judgment has a clear problem, as it lacks a definite theoretical model that enables the selection of indicators and the decision on weighted value, and the usefulness of the data is too limited to deal with differences between countries. The use of scoreboards or benchmarks may be dangerous, because the numbers are taken for granted with little discussion of their validity, as Pavitt (1988) pointed out. Considerable room exists for manipulation by selection, weighting and aggregating indicators (Grupp & Mogee, 2004; Grupp & Schubert, 2010: 69). Concerning interpretation, analysis and use of indicators, it is a noteworthy fact that there has been conflict as a result of statistics producers, such as state run statistical institutions, which attaches importance to the accuracy and reliability of statistics related to an agenda item, while policy makers, who are the users of statistics, who put stress on usefulness, substantiality and comparability. (Graversen & Siune, 2008:4). Gault (2007) pointed out that the issue now is the making of this information more policy relevant: 1) indicators should be able to tell what can be obtained through Science, Technology and Innovation (STI) activities in connection with the currently high interest in official accountability; 2) More impact indicators should be produced and they should be integrated with the activities linkage outcomes index system; 3) The power of integration of information to be obtained from a considerable power of analysis and diverse resources is required to make a proper index system; 4) It is possible to try an international comparison by applying the same technique to the analysis of other countries microscopic data, as the ability to compute microscopic as well as macroscopic data has improved and 5) Science of Science Policy should be pursued through the development of database, models and visualization technique based on the improvement of the ability to compute large scale data (Gault, 2007: ). At present, the need is recognized for production and use of high quality science and technology indicators in as many countries as possible. It is also pointed out that underdeveloped countries are underrepresented in international science and technology statistics. Thus, voices are raised for the need to reduce such an information gap. Currently, many of the developing countries systematically collecting S&T data are complying with the international standards and protocols that were designed for, and 68 Developing the Asian Innovation Scoreboard

82 adopted by advanced industrialized nations. Oftentimes, the practices and methodologies outlined under these protocols are limited and incompatible with the research, management and information systems found in many developing countries (Tijssen & Hollanders, 2006: 6). Although the historical, cultural and political systems of a developing country are diverse, their level of institutionalization remains low and inter learning and the linkage between official systems and information systems remains weak. Recent studies point to the existence of strong interrelations between technological capability and innovation friendly governance and social and cultural factors. There have not been many studies concerning the switch from the stage of inception to a mature innovation system. It can be expected that if all systems evolve in a different way (being path dependent partially) they will follow different patterns. It is very important to compare countries and regions temporarily and spatially in a systematic way to see what the major components of a system are and what the major motives of such changes are. However, the best practices in one specific system cannot be or should not be transplanted elsewhere (Rodrik, 2008). Policy learning should be accomplished by experiments. In many countries, particularly underdeveloped countries, R&D or innovation survey has not been carried out. Surveys made by even the countries that have developed indicators have covered the form of STI (Science, Technology and Innovation), but not the form of DUI (Doing, Using and Interacting). It has not been long since indicators (in the DUI form), such as organizational change or users, were included in the innovation surveys. (Lundvall et al., 2010: 14 15). It is an important matter as to how the system of indicators should be composed in latecomer countries or how a country s individual characteristics and innovation systems should be considered. We interpret this as a significant difference in the kind of innovative system developed in a latecomer country seeking to catch up from that in an advanced country. The role of public R&D expenditure can be seen both as a source of innovative capacity in itself, and as a guide to steer the utilization of limited resources in latecomer countries.(hu & Mathews, 2005: ). Chapter 4. Developing the Asian Innovation Scoreboard 69

83 2 Composition of the Asian Innovation Scoreboard The competitiveness and innovation index was defined within the framework of NIS by referring to the studies and reports from the advanced countries. The NIS forms and identifies the national innovation through the innovation of the subject, the innovation of factors, the innovation of performance and expansion, the innovation of system and the innovation of foundation, and also the innovation index is considered to be the capabilities of a country of an economy that can achieve a series of innovations with economic values (Porter & Stern). When the national competitiveness is defined as the the subject of innovation utilizing the innovation resources effectively under an innovation environment to implement innovation activities and performance, the COmposite Science, Technology, Innovation Index(COSTII) could be a good starting point for the AIS. The COSTII was developed to assess 30 OECD countries. It was to analyze the strengths and weaknesses of Korea to propose policy to improve science and technology innovation capacity. After dividing the framework of the NIS into the 5 dimensions of resource, activity, process (network), environment and performance, each dimension was broken down into 13 items, including human resources, organization, knowledge resources, R&D investment, entrepreneurial activities, triple helix cooperation, industrial cooperation, international cooperation, support systems, physical infrastructure, innovative culture, knowledge creation and economic outcome. In order to establish simple and credible statistics and data that can accurately explain the foundation and changes of the COSTII, the whole process, including the resource stock, application, process, foundation and performance, of the science and technology activities were all included to effectively identify the factors that have an important effect on the innovation capacity (Figure 20). 70 Developing the Asian Innovation Scoreboard

84 <Figure 20> Framework of COSTII The detailed indicators consider the representativeness of the variables and the sufficiency of the data to decide on thirty one items by conducting a survey and consulting with the local and overseas experts and a committee of experts through a top down method that best suits the definition of Innovation Index among the pool of various indicators. Since it was still in the early stages, the basic framework was maintained as a principle to ensure consistency, but some indicators such as outside environmental changes and change of the raw materials have been adopted according to each situation. However, most data related to innovation is still not at a stable standard compared to the other thirty OECD countries, which is why there are no attempts to add more items to ensure the data acquisition, and possibility of comparison and continuity. If one looks at the source of the data, most of the data used are from internationally credible institutions like the OECD, World Bank, USPTO and the IMD. Additionally, the indicators related to companies, such as corporate process improvement, innovative SMEs and new market innovation; are not included because the focus is on the public sector to identify the science and technology fields and the policy implications. However, in view of other Asian countries, the COSTII may contain indicators that are not appropriate for them in their current economic stage. Thus we need some corrections or changes to the COSTII, taking other countries viewpoints into account. For instance, the COSTII, a composite index, places emphasis on the availability of data for fear that its reliability as an international comparison indicator Chapter 4. Developing the Asian Innovation Scoreboard 71

85 may be reduced when data sets are severely incomplete. At the starting stage of the AIS development, it is difficult to possess all the indicators that fit the viewpoints of all other Asian countries. Thus, in order to accomplish a precise evaluation of the current situation and the layout of a more desirable investigation system in the future, we introduced the concepts of a scoreboard rather than a composite index. In this research, we employed the classification of the 5 dimensions (resources, activity, network, environment, and results) of the COSTII, while modifying the details according to each Asian country s situation. As for some indicators among the 36 indicators of the COSTII that are not applicable to other Asian countries, we have replaced them with a new representative indicator relevant to the sector from official international databases. The 44 indicators for the AIS was drafted, as shown in <Table 20>. <Table 20> Indicators for the AIS (Draft) Resources Activities Network Human Resources Organization Knowledge Resources R&D Investment Entrepreneurial Activity Triple Helix Cooperation Category No. of Total researchers Total researchers per 10,000 people (%) % of S&E degrees in total first university degrees % of S&E Ph.D.s in relevant age cohort No. of organizations that issued USPTO patents No. of universities ranked in Asia s 100 best universities No. of companies ranked in the world s top 2,000 R&D private investors No. of SCI papers in the past 15 years (STOCK) No. of USPTO patents in the past 15 years (STOCK) No. of Triadic patents in the past 15 years (STOCK) No. of PCT patents in the past 15 years(stock) Total expenditure on R&D(Mil. PPP $) Total expenditure on R&D as % of GDP Total expenditure on R&D per researcher (PPP $) Business expenditure on R&D (Mil. PPP $) % of business expenditure on R&D in industrial added value Government expenditure on R&D as % of GDP Venture capital investment as % of GDP No. of USPTO patents jointly issued by industry, academia, and research institute 72 Developing the Asian Innovation Scoreboard

86 Environment Performance Industrial Cooperation International Cooperation Support System Physical Infrastructure Culture Economic outcome Knowledge Creation Category % of private R&D investment in government, and academia R&D investment Technological cooperation( ) No. of international joint patents in USPTO Foreign Direct Investment as a % of GDP Attitudes toward globalization ( ) Protection of intellectual property rights( ) No. of Broadband subscribers per 100 people No. of Internet users per 1,000 people Households with Internet connection (%) No. of Mobile phone subscribers per 100 inhabitants Overall quality of social infrastructure ( ) Attitudes toward new cultures ( ) Emphasis on science in school education ( ) Export in high tech industry to manufacturing sector Technology export (Mil. US$) Technology Balance of Payment Industrial added value per capita (PPP $) Annual No. of USPTO patents Annual No. of Triadic patents Annual No. of PCT patents No. of USPTO patents to annual GERD (per Mil. PPP $) No. of Triadic patents to annual GERD (per Mil. PPP $) No. of PCT patents to annual GERD (per Mil. PPP $) No. of SCI papers per researcher Citations per paper Chapter 4. Developing the Asian Innovation Scoreboard 73

87 <BOX 3 : Introducing Composite Science and Technology Innovation Index (COSTII)> COmposite Science and Technology Innovation Index (COSTII) is developed and the index is used to assess 30 OECD nations. Its main purpose is to evaluate science and technology innovation capacity by developing a model and indicators that can give comprehensive diagnosis and, later, identifies strengths and weaknesses to propose policy to improve science and technology innovation capacity. The evaluation model consists of five dimensions: resources, activities, network, environment, and performance. <Table> COSTII Indicators Category Human resources Total no. of researchers No. of researchers per 10,000 population Ratio of S&E Ph.D.s in relevant age cohort No. of organizations that issued USPTO patents Resources organization No. of world s leading organizations No. of universities ranked in the world s 500 best universities No. of companies ranked in the World s top 1000 R&D private investors Knowledge resources No. of patents in the past 15 years(stock) No. of SCI papers in the past 15 years (STOCK) USPTO Triad Activities Network Network R&D investment Entrepreneuri al activity Triple helix cooperation Industrial cooperation International cooperation Total amount of R&D investment Ratio of total R&D investment per GDP R&D investment per researcher Ratio of industrial R&D investment vis a vis industrial added value Government R&D investment vis a vis GDP TEA (Total Entrepreneurial Activities) Ratio of investment of venture capital vis a vis GDP No. of patents jointly issued by industry, academia, and research institute per researcher Ratio of private R&D investment to government, academia R&D investment Industrial Cooperation* No. of international joint patents per researcher (Overseas investment + foreign investment) ratio vis a vis GDP 74 Developing the Asian Innovation Scoreboard

88 Category Environment Support system Physical infrastructure culture Economic outcome 1 B index (tax support for R&D) Protection of intellectual property rights* No. of broadband subscribers per 100 inhabitants Overall quality of social infrastructure* Attitudes toward new cultures* Emphasis on science in school education* Industrial added value per capita Ratio of export in high tech industry to manufacturing sector Technology export Performance Annual no. of patents USPTO Triad Knowledge creation Ratio of no. of USPTO patents to annual GERD (per mil. USD) No. of SCI papers per researcher and level of referencing USPTO Triad No. of papers Citations per paper In addition, the alternative indicators which can be applied in the future were suggested as shown in <Table 21>. Once the indicators are set, it will be possible to define essential indicators and additional indicators. Essential indicators will help us to determine a key policy goal in consideration of the developmental phase of Asian countries. In the meantime, additional indicators, as supplementary or as an alternative to essential indicators, will be applied to diagnosing changing situations in the future. Data currently not available can be attained through bilateral or multilateral meetings. Even though not collected through international organizations, the data will be presumed to be original and legitimate as long as a uniform standard is employed in collecting them. Hence, in consideration of mid and long term rebuilding of data collection systems, deduction of essential indicators and additional indicators should be based on conceptual adequacy rather than currently available data. Chapter 4. Developing the Asian Innovation Scoreboard 75

89 <Table 21> Alternative Indicators Resources Activities Network Category Human Resources Organization Entrepreneurial Activity Triple helix cooperation International cooperation Alternative indicators % of S&E degrees in population No. of organizations that issued overseas patents No. of universities have S&E departments No. of foreign R&D centers in country No. of new entrepreneurs No. of domestic patents jointly issued by industry, academia, and research institute per researcher No. of international joint patents per researcher in overseas patents Environment Support System Tax incentives for R&D as % of GDP With the drafted indicators, the pilot analysis was performed on 10 countries including the 7 target countries as listed in <Table 22>. <Table 22> Countries for the pilot analysis Type A Type B Type C Type D Korea, Japan, Taiwan Singapore China, India Indonesia Malaysia, Philippine Kazakhstan 76 Developing the Asian Innovation Scoreboard

90 3 Pilot Analysis 1. Resources 1) Human Resources Number of Total Researchers China (1,152,311, 09) is recorded to have the largest number of total researchers. Following countries are Japan (655,530, 09), Korea (264,118, 10), and India (154,827, 05). However, the numbers are less than half the level of China. <Figure 21> Number of Total Researchers <Figure 22> Number of Total Researchers in Top Three Countries <Table 23> Number of Total researchers in Asian countries (Unit: #, FTE) Country Korea 108, , , , , , , , , , ,118 Japan 647, , , , , , , , , ,530 Taiwan 55,460 59,656 69,887 75,111 81,209 88,859 95, , , ,185 Singapore 16,633 16,740 18,120 20,024 21,359 23,789 25,033 27,301 27,841 30,530 China 695, , , , ,252 1,118,698 1,223,756 1,423,381 1,592,420 1,152,311 India 115, ,827 Indonesia 44,984 42,722 21,275 Malaysia 6,423 7,157 12,670 9,694 12,542 Philippines 5,860 6,896 6,957 Number of Total researchers (FTE) - Determine the number of the researchers performing R&D activities directly. - FTE(Full time equivalent) : Workforce calculation depending on the degree of devotion to R&D * Example : People who do R&D using their half of working hours count as 0.5 people Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Malaysia : Other countries : Chapter 4. Developing the Asian Innovation Scoreboard 77

91 2) Human Resources Total researchers per 10,000 people Singapore (64.45, 09) is recorded to have the largest number of total researchers per 10,000 people. Following countries are Korea (54.04, 10), Taiwan (51.55, 09), and Japan (51.48, 09). Excluding Japan, the figure for Singapore, Taiwan and Korea has been consistently increasing since <Figure 23> Total researchers per 10,000 people <Figure 24> Total researchers per 10,000 people in Top Four Countries <Table 24> Total researchers per 10,000 people in Asian countries (Unit: #, FTE) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Total researchers per 10,000 people (FTE) - Investigate the weight of a country s researchers per population considering the country s population size as an indicator. - Calculation of a country s total researchers per population Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Malaysia : Other countries : 78 Developing the Asian Innovation Scoreboard

92 3) Human Resources % of S&E degrees in total first university degrees Indonesia (67.28%, 02) is recorded to have the highest % of S&E degrees in total first university degrees. Following countries are Singapore (62.80%, 09), Japan (62.73%, 06), and China (55.08%, 08). The mentioned countries have more than 50% of S&E degrees in total first university degrees Singapore has been maintaining its % of S&E degrees in total first university degrees around 60% for recent 10 years. <Figure 25> % of S&E degrees in total first university degrees <Figure 26> % of S&E degrees in total first university degrees in Top Three Countries <Table 25> % of S&E degrees in total first university degrees in Asian countries (Unit: %) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan % of S&E degrees in total first university degrees - Investigate the weight of a country s % of S&E degrees in total first university degrees Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) Statistics Korea, KOSIS - Malaysia : Other countries : Chapter 4. Developing the Asian Innovation Scoreboard 79

93 4) Human Resources % of S&E Ph.D.s in relevant age cohort It is shown that Korea and Japan have relatively higher % of S&E Ph.D.s in relevant age cohort. Korea and Japan have 0.40% ( 09) and 0.43% ( 09) respectively while China and India have 0.06% ( 04) and 0.03% ( 03) respectively. Japan s % of S&E Ph.D.s in relevant age cohort has been increasing constantly while Korea s % is maintained at certain level. <Figure 27> % of S&E Ph.D.s in relevant age cohort <Figure 28> % of S&E Ph.D.s in relevant age cohort in Top Three Countries <Table 26> % of S&E Ph.D.s in relevant age cohort in Asia countries (Unit: %) Country Korea Japan China 0.06 India 0.03 % of S&E Ph.D.s in relevant age cohort - Investigate each countries % of S&E Ph.D.s in relevant age cohort. - Investigate R&D potential using % of S&E Ph.D.s in relevant age cohort. Sources - OECD, STI Scoreboard 80 Developing the Asian Innovation Scoreboard

94 5) Organization Number of organizations that issued USPTO patents It is shown that Japanese organizations has been actively issuing USPTO patents. The number of Japanese organizations issuing USPTO patents is numbered to be 2,628 ( 10), which is the largest number in Asia. Following countries are Taiwan (1,064, 10) and Korea (679 10). <Figure 29> Number of organizations that issued USPTO patents <Figure 30> Number of organizations that issued USPTO patents in Top Three Countries <Table 27> Number of organizations that issued USPTO patents in Asian countries (Unit: #) Country Korea Japan 2,633 2,818 2,712 2,765 2,652 2,415 2,508 2,314 2,292 2,293 2,628 Taiwan ,064 Singapore China India Indonesia Malaysia Philippines Kazakhstan Number of organizations that issued USPTO patents - Number of organizations that issued USPTO patents to exercise patent authority in US - Indicator to determine the level of research organizations in a country Sources - USPTO, Chapter 4. Developing the Asian Innovation Scoreboard 81

95 6) Organization Number of universities ranked in Asia s 100 best universities In 2011, 25 universities from Japan were included in Asia s 100 best universities. Each of all four countries, Japan (25), Korea (16), China (14), and Taiwan (11), has more than 10 universities in Asia s 100 best universities. Number of universities in Asia s 100 best universities for China increased to 14 ( 11) from 12 ( 10); 11( 09). <Figure 31> Number of universities ranked in Asia s 100 best universities <Figure 32> Number of universities ranked in Asia s 100 best universities in Top Three Countries <Table 28> Number of universities ranked in Asia s 100 best universities in Asian countries Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines (Unit: #) Number of universities ranked in Asia s 100 best universities - The indicator to determine the level of universities in a country using the selection of Asia s best universities made each year by The Times and international university rating agency, QS (Quacquarelli Symonds) - Comprehensively selected through surveys of expert assessment, research accomplishment comparing research scale, international student proportion, and etc. - Kazakhstan is excluded from Asia here. Sources - The Times QS, 82 Developing the Asian Innovation Scoreboard

96 7) Organization Number of companies ranked in the world s top 2,000 R&D private investors In 2010, among the companies ranked in the world s top 2,000 R&D private investors, Japan recorded to have 267 companies, the largest number in Asia. Following countries are Taiwan (50), Korea (25), China (19), and India (18). Other countries, Kazakhstan, Philippines, and Malaysia, are not comparable in this category. <Figure 33> Number of companies ranked in the world s top 2,000 R&D private investors <Figure 34> Number of companies ranked in the world s top 2,000 R&D private investors in Top Three Countries <Table 29> Number of companies ranked in the world s top 2,000 R&D private investors in Asian countries Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan (Unit: #) Number of companies ranked in the world s top 2,000 R&D private investors - The indicator to reduce R&D investment gap between EC and other foreign countries using the analysis of private R&D investment trend and its impact factor done by Research DG of EC and Joint Research Centre - Based on annual report and consolidated financial statements, top 1,000 R&D investment rankings of EU and non EU countries are selected. Sources - EU, Industrial R&D Investment Scoreboard Chapter 4. Developing the Asian Innovation Scoreboard 83

97 8) Knowledge Resources Number of SCI papers in the past 15 years (STOCK) During recent 15 years ( 96~ 10), accumulated number of SCI papers from Japan is 1,108,899, which is the largest in Asia. The following country, China, has the number of 916,564. The number for India and Korea is 366,446 and 326,645 respectively. The accumulated number of SCI papers of China has been rapidly increased. <Figure 35> Number of SCI papers in the past 15 years (STOCK) <Figure 36> Number of SCI papers in the past 15 years (STOCK) in Top Three Countries <Table 30> Number of SCI papers in the past 15 years (STOCK) in Asian countries Country 1986 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~2009 (Unit: #) 1996 ~2010 Korea 75,307 90, , , , , , , , , ,645 Japan 811, , , , , ,055 1,028,517 1,049,537 1,075,880 1,097,093 1,108,899 Taiwan 78,794 88,741 98, , , , , , , , ,838 Singapore 24,051 27,670 31,660 36,349 41,179 47,026 53,078 58,559 64,996 71,940 78,812 China 205, , , , , , , , , , ,564 India 228, , , , , , , , , , ,446 Malaysia 7,711 8,421 9,123 10,063 11,045 12,326 13,836 15,517 18,136 21,943 27,031 Kazakhstan 4,572 4,335 4,204 4,086 3,875 3,737 3,545 3,388 3,287 3,305 3,305 Number of SCI papers in the past 15 years (STOCK) - The number of SCI papers is used as an indicator to assess each country s science and technology level and accomplishment s productivity and quality. - Calculation of number of SCI papers in the past 15 years is used to determine the accumulation of knowledge resource. * SCI DB: Thomson ISI (Institute for Scientific Information) organize annual bibliography of the paper and the usage of the paper and its bibliography to systematically service information. Sources - Thomson ISI (Reprocessed) 84 Developing the Asian Innovation Scoreboard

98 9) Knowledge Resources Number of USPTO patents in the past 15 years (STOCK) During recent 15 years ( 96~ 10), accumulated number of USPTO patents of Japan is 492,914, which is the largest number in Asia. The numbers for Taiwan and Korea are 76,278 and 73,751 respectively. The numbers for other countries are below 10,000. The number of USPTO patents of top three countries (Japan, Taiwan, and Korea) is gradually increasing <Figure 37> Number of USPTO patents in the past 15 years (STOCK) <Figure 38> Number of USPTO patents in the past 15 years (STOCK) in Top Three Countries <Table 31> Number of USPTO patents in the past 15 years (STOCK) in Asian countries Country 1986 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~2009 (Unit: #) 1996 ~2010 Korea 17,955 21,447 25,149 28,997 33,266 37,393 42,896 48,653 55,422 63,241 73,751 Japan 334, , , , , , , , , , ,914 Taiwan 23,907 29,068 34,155 38,996 44,343 48,729 54,184 59,311 64,461 69,660 76,278 Singapore 903 1,196 1,595 2,016 2,447 2,781 3,178 3,539 3,900 4,285 4,835 China 819 1,007 1,273 1,523 1,874 2,229 2,840 3,571 4,743 6,350 8,945 India ,028 1,356 1,705 2,066 2,525 3,047 3,651 4,303 5,364 Indonesia Malaysia ,024 1,219 Philippines Kazakhstan Number of USPTO patents in the past 15 years (STOCK) - Calculation of number of USPTO patents in the past 15 years is an indicator to determine the accumulation of knowledge resource considering patent life in each country * Based on utility patent, investigation is done on numbers of registered and granted patents in the year. Sources - USPTO, Chapter 4. Developing the Asian Innovation Scoreboard 85

99 10) Knowledge Resources Number of Triadic patents in the past 15 years (STOCK) During recent 15 years ( 95~ 09), accumulated number of triadic patents of Japan is also the largest in Asia. The number for Japan is 195,780. Following countries are Korea (18,700), China (3,343), and Taiwan (1,559). Japan is significantly larger than all other countries. The accumulated number of triadic patents in comparing Asian countries is consistently increasing. <Figure 39> Number of Triadic patents in the past 15 years (STOCK) <Figure 40> Number of Triadic patents in the past 15 years (STOCK) in Top Three Countries <Table 32> Number of Triadic patents in the past 15 years (STOCK) in Asian countries Country 1986 ~ ~ ~ ~ ~ ~ ~ ~ ~2008 (Unit: #) 1995 ~2009 Korea 3,550 4,454 5,652 7,316 9,244 11,296 13,329 15,259 16,956 18,700 Japan 144, , , , , , , , , ,780 Taiwan ,174 1,360 1,559 Singapore ,030 1,146 1,248 China ,037 1,333 1,741 2,209 2,695 3,343 Number of Triadic patents in the past 15 years (STOCK) - In order to protect the same invention in OECD, the number of triadic patents is defined by files in EPO and JPO and registrations in USPTO. - Because of removal of geographic advantage and country s impact, international comparisons based on patent is easy. - Number of triadic patents is investigated based on residence of the inventor and the priority date. - Calculation of number of triadic patents in the past 15 years is an indicator to determine the accumulation of knowledge resource. Sources - OECD, Main Science & Technology Indicators Developing the Asian Innovation Scoreboard

100 11) Knowledge Resources Number of PCT patents in the past 15 years (STOCK) During recent 15 years ( 96~ 10), Japan, Korea, China are ranked as top among other Asian countries regarding number of PCT patents in the past 15 years. The accumulated number of PCT patents for Japan, Korea, and China is 266,057, 58,195, and 45,661 respectively. <Figure 41> Number of PCT patents in the past 15 years (STOCK) <Figure 42> Number of PCT patents in the past 15 years (STOCK) in Top Three Countries <Table 33> Number of PCT patents in the past 15 years (STOCK) in Asian countries Country 1986 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~2009 (Unit: #) 1996 ~2010 Korea 4,301 6,600 9,104 12,022 15,558 20,220 26,128 33,108 40,879 48,722 58,195 Japan 48,797 60,037 73,055 89, , , , , , , ,057 Singapore ,299 1,580 2,009 2,459 2,933 3,448 4,023 4,613 5,228 China 1,905 3,634 4,649 5,947 7,654 10,157 14,098 19,553 25,671 33,468 45,661 India ,144 1,907 2,632 3,310 4,143 5,044 6,116 7,076 8,361 Indonesia Malaysia ,116 Philippines Kazakhstan Number of PCT patents in the past 15 years (STOCK) - PCT (Patent Cooperation Treaty): In order to reduce heavy burden a patent applicant has to bear and national Bureau of Statistics on the duplicate audit efforts, this international treaty simplifies the international protection of inventions in the case of registering patents in several countries with the same invention, * Based on December Sources - WIPO, Chapter 4. Developing the Asian Innovation Scoreboard 87

101 2. Activities 1) R&D Investment Total expenditure on R&D(Mil. PPP $) In total expenditure on R&D, China (154,147 Mil. PPP$) and Japan (137,909 Mil. PPP$) are ranked at top positions. Especially for China, the expansion of investment in R&D has been proceeding actively since <Figure 43> Total expenditure on R&D <Figure 44> Total expenditure on R&D in Top Three Countries <Table 34> Total expenditure on R&D in Asia countries (Unit: Mil. PPP$) Country Korea 18,558 21,259 22,507 24,009 27,879 30,618 35,296 40,743 43,906 47,133 53,336 Japan 98, , , , , , , , , ,909 Taiwan 8,764 9,378 10,476 11,690 13,109 14,527 16,572 18,493 20,512 21,572 Singapore 2,491 2,782 3,010 3,125 3,669 4,247 4,708 5,732 6,480 5,626 China 27,183 31,696 39,558 47,127 57,782 71,055 86, , , ,147 India 12,276 12,816 13,322 14,593 16,576 19,618 21,790 24,325 Indonesia Malaysia 994 1,522 1,661 2,091 Philippines Kazakhstan Total expenditure on R&D - R&D expenses include expenditures from all the stages just before commercialization such as the acquisition of new knowledge and creative efforts to find and explore new ways to utilize existing knowledge. - Total expenditure on R&D (PPP) is an indicator to determine each country s level of R&D activities. * PPP (Purchasing Power Parity): Each country s purchasing power is equated to currency rates considering the price level between countries. Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : 88 Developing the Asian Innovation Scoreboard

102 2) R&D Investment Total expenditure on R&D as % of GDP Korea recorded the highest % of total R&D expenditure in GDP. In 2010, Korea s total expenditure on R&D as % of GDP is 3.74%, which is the highest among other comparing countries. Following countries are Japan (3.33%, 09) and Taiwan (2.93, 09) Since 2005, % of Korea has been consistently increasing while Japan has been remaining at 3%. <Figure 45> Total expenditure on R&D as % of GDP <Figure 46> Total expenditure on R&D as % of GDP in Top Three Countries <Table 35> Total expenditure on R&D as % of GDP in Asian countries (Unit: %) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Total expenditure on R&D as % of GDP - An indicator to determine a country s level of R&D activities considering the country s economic scale - A country s total expenditure on R&D is divided by GDP (Gross Domestic Product) Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : Chapter 4. Developing the Asian Innovation Scoreboard 89

103 3) R&D Investment Total expenditure on R&D per researcher (PPP$) In the category of total expenditure on R&D per researcher, Malaysia, Japan, and Korea are ranked at top positions. Among the countries, Japan (210,377PPP$, 09) and Korea (201,939PPP$, 10) are at top position due to their vivid R&D activities while Malaysia is at high position because of its small scale of researchers. <Figure 47> Total expenditure on R&D per researcher (PPP$) <Figure 48> Total expenditure on R&D per researcher (PPP$) in Top Three Countries <Table 36> Total expenditure on R&D per researcher (PPP$) in Asian countries (Unit: PPP$, FTE) Country Korea 171, , , , , , , , , , ,939 Japan 152, , , , , , , , , ,377 Taiwan 158, , , , , , , , , ,994 Singapore 149, , , , , , , , , ,292 China 39,108 42,675 48,805 54,665 62,383 63,516 70,822 71,947 75, ,772 India 105, ,709 Indonesia 7,466 5,855 37,669 Malaysia 154, , , ,643 Philippines 48,716 42,172 49,049 Total expenditure on R&D per researcher (PPP$) - An indicator that shows researcher s environment on the aspect of total expenditure on R&D. - Total expenditure on R&D is divided by total number of researchers. * FTE (Full time equivalent): Work force calculation depending on the degree of devotion to R&D * PPP (Purchasing Power Parity): Each country s purchasing power is equated to currency rates considering the price level between countries. Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : 90 Developing the Asian Innovation Scoreboard

104 4) R&D Investment Business expenditure on R&D (Mil. PPP$) In Asian countries, business expenditure on R&D is consistently increasing. In the comparing countries, Japan records of 116,688 Mil. PPP$ ( 08), the largest in Asia; China (88,361 Mil. PPP$, 08) and Korea (39,895 Mil. PPP$, 10). Especially, China s business expenditure is rapidly increasing. <Figure 49> Business expenditure on R&D (Mil. PPP$) <Figure 50> Business expenditure on R&D (Mil. PPP$) in Top Three Countries <Table 37> Business expenditure on R&D (Mil. PPP$) in Asian countries (Unit: Mil. PPP$) Country Korea 13,742 16,196 16,856 18,269 21,388 23,531 27,269 31,063 33,091 35,001 39,895 Japan 70,178 76,615 80,521 84,181 88,315 98, , , ,688 Taiwan 5,574 5,961 6,515 7,344 8,479 9,740 11,186 12,796 14,515 Singapore 1,532 1,754 1,839 1,899 2,340 2,809 3,101 3,857 4,723 China 15,867 18,679 23,628 28,664 38,330 48,550 61,597 73,979 88,361 India 2,215 2,477 2,576 3,248 4,151 5,964 7,000 8,252 Indonesia Malaysia ,187 1,775 Philippines Kazakhstan Business expenditure on R&D (Mil. PPP$) - Business expenditure on R&D is an indicator to measure the role of private sector on a country s future growth excavation. * PPP (Purchasing Power Parity): Each country s purchasing power is equated to currency rates considering the price level between countries. Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : Chapter 4. Developing the Asian Innovation Scoreboard 91

105 5) R&D Investment % of business expenditure on R&D in industrial added value In the category of % of business expenditure on R&D in industrial added value, Korea is the only country that has 4% range (4.17%, 10). Japan (3.49%, 09) and Taiwan (2.86%, 09) have relatively higher %. Among the countries at higher positions, Korea and Taiwan have been consistantly increasing while Japan has been maintain the range of 3.4%~3.8%. <Figure 51> % of business expenditure on R&D in industrial added value <Figure 52> % of business expenditure on R&D in industrial added value in Top Three Countries <Table 38> % of business expenditure on R&D in industrial added value in Asian countries (Unit: %) Country Korea Japan Taiwan Singapore China % of business expenditure on R&D in industrial added value - An indicator, business expenditure on R&D divided by industrial added value, shows business R&D intensity. - High business expenditure on R&D in industrial added value means that R&D expenditure contributes a lot to industrial added value. Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : 92 Developing the Asian Innovation Scoreboard

106 6) R&D Investment Government expenditure on R&D as % of GDP In 2010, Korea s government expenditure on R&D as % of GDP was 1.02%. Korea s % has been constantly increasing from 0.78% in 2005 and in 2009, Korea finally exceeded 1.0% for the first time. Taiwan and Japan recorded to have 0.84% and 0.74% respectively. <Figure 53> Government expenditure on R&D as % of GDP <Figure 54> Government expenditure on R&D as % of GDP in Top Three Countries <Table 39> Government expenditure on R&D as % of GDP in Asian countries (Unit: %) Country Korea Japan Taiwan Government expenditure on R&D as % of GDP - An indicator, government R&D expenditure divided by GDP, shows concentration of government s performance on R&D. - When government expenditure on R&D as % of GDP is high, it is suitable to carry out goal oriented research but this might hinder R&D activities in market. Sources - OECD, Main Science & Technology Indicators Chapter 4. Developing the Asian Innovation Scoreboard 93

107 7) Entrepreneurial Activity Venture capital investment as % of GDP In 2009, Korea s venture capital investment as % of GDP was 0.030% while Japan recorded as 0.007% in <Figure 55> Venture capital investment as % of GDP <Figure 56> Venture capital investment as % of GDP in Top Three Countries <Table 40> Venture capital investment as % of GDP in Asian countries (Unit: %) Country Korea Japan Venture capital investment as % of GDP - Venture capital investment used in R&D, product development, and marketing of ventures that are based on new technology is divided by GDP. This indicator is useful in determining financial support for technology commercialization. - Venture capital as the primary source for companies in the technology plays an important role in promoting innovation but as internet bubble incident showed in 2000s, it s very sensitive to the recession. Sources - OECD, Science, Technology and Industry Scoreboard 94 Developing the Asian Innovation Scoreboard

108 3. Network 1) Triple Helix Cooperation No of USPTO patents jointly issued by industry, academia, and research institute In 2010, number of USPTO patents jointly issued by industry, academia, and research institute of Japan was 1,825, which was the largest. Following countries are Korea (283), China (87), and Taiwan (74). Since 2007, the number for Korea has been rapidly increasing. <Figure 57> Number of USPTO patents jointly issued by Triple Helix Cooperation <Figure 58> No of USPTO patents jointly issued by Triple Helix Cooperation in Top Three Countries <Table 41> Number of USPTO patents jointly issued by industry, academia, and research institute in Asian countries (Unit: #) Country Korea Japan 1,399 1,396 1,600 1,879 1,852 1,526 1,915 1,585 1,650 1,784 1,825 Taiwan Singapore China India Malaysia Philippines Number of USPTO patents jointly issued by industry, academia, and research institute - An indicator showing how joint research is actively developing - Calculated by dividing the number of USPTO registered patents jointly issued by industry, academia, and research institute per year by total researchers (FTE). - For each country, when applicants are more than two excluding one self, one counts toward the country. * Example: For a patent with total six applicants, three belong to A, two belong to B, and one belongs to A. Then, one count for both A and B. Sources - USPTO (Reprocessed) Chapter 4. Developing the Asian Innovation Scoreboard 95

109 2) Triple Helix Cooperation % of private R&D investment in government and academia R&D investment China has 40.92% ( 09), which is the highest among other comparing countries. China has been maintaining its % around 40% since Korea has 14.75%. Along with China, Korea is also the country with above 10%. However, Korea s % has been constantly decreasing since <Figure 59> % of private R&D investment in government and academia R&D investment <Figure 60> % of private R&D investment in government and academia R&D investment in Top Three Countries <Table 42> % of private R&D investment in government and academia R&D investment in Asian Countries (Unit: %) Country Korea Japan Taiwan Singapore China % of private R&D investment in government and academia R&D investment - Sum of % of private R&D investment in government and % of private R&D investment in academia - An indicator showing the degree of triple helix cooperation * Fund: source of financial income or item of financial income Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) 96 Developing the Asian Innovation Scoreboard

110 3) Industrial Cooperation Technological cooperation In 2011, all the comparing countries scored above 5 in technological cooperation. Among the countries, Japan had the highest score of Following countries were Malaysia (6.88), Taiwan (6.84), and Singapore (6.54). Korea had a score of 5.35 while China had a score of 5.19 <Figure 61> Technological cooperation <Figure 62> Technological cooperation in Top Three Countries <Table 43> Technological cooperation in Asian Countries (Unit: Score, Survey) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Technological cooperation - An indicator showing how joint usage of new knowledge and technology is actively accomplished through industrial technological cooperation network - An indicator showing the degree of industrial technological cooperation from survey question of IMD s The World Competitiveness Yearbook Sources - IMD, The World Competitiveness Yearbook & World Competitiveness Online Chapter 4. Developing the Asian Innovation Scoreboard 97

111 4) International Cooperation Number of international joint patents in USPTO China s number of international joint patents in USPTO is the largest in Asia. In 2010, China s number of international joint patents in USPTO was 943. Following countries were Taiwan (885), Japan (578), and Korea (102) Since 2005, the number of international joint patents in USPTO for China and Taiwan has been rapidly increasing. <Figure 63> Number of international joint patents in USPTO <Figure 64> Number of international joint patents in USPTO in Top Three Countries <Table 44> Number of international joint patents in USPTO in Asian Countries (Unit: #) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Number of international joint patents in USPTO - Measurement of how international joint research is actively progressed - USPTO patent is registered to United States Patents and Trademark Office to perform the authority in US Sources - USPTO(Reprocessed) 98 Developing the Asian Innovation Scoreboard

112 5) International Cooperation Foreign Direct Investment (FDI) as a % of GDP Regarding Foreign Direct Investment (FDI) as a % of GDP, which can measure the level of international cooperation, India is recorded to have the highest % as 3.74% in Following countries were China (3.17%), Korea (2.34%), and Japan (1.71%). <Figure 65> FDI as a % of GDP <Figure 66> FDI as a % of GDP in Top Three Countries <Table 45> Foreign Direct Investment (FDI) as a % of GDP in Asian Countries Country Korea Japan China India Indonesia (Unit: %) Foreign Direct Investment (FDI) as a % of GDP - Understand how international cooperation is actively progressed from measurement of the relative importance of globalization regarding direct investment at the level of economic activity - Calculation by dividing the sum of direct investment from abroad (outflow) and foreign direct investment (inflow) by GDP Sources - Korea, Japan, China: OECD, Factbook 2011, Main Science & Technology Indicators OECD, Factbook World Bank, World Development Indicators Chapter 4. Developing the Asian Innovation Scoreboard 99

113 6) International Cooperation Attitudes toward globalization In 2011, attitudes toward globalization of Singapore was 7.82, the highest in Asia. Following countries were Taiwan (7.71) and Malaysia (7.64); both were at high level. <Figure 67> Attitudes toward globalization <Figure 68> Attitudes toward globalization in Top Three Countries <Table 46> Attitudes toward globalization in Asian Countries (Unit: Score, Survey) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Attitudes toward globalization - An indicator showing the degree of attitudes toward globalization from survey question of IMD s The World Competitiveness Yearbook. Sources - IMD, The World Competitiveness Yearbook & World Competitiveness Online 100 Developing the Asian Innovation Scoreboard

114 4. Environment 1) Support System Protection of intellectual property rights In 2011, Singapore recorded to have the highest score for the protection of intellectual property rights by receiving Following countries are Japan (8.06), Taiwan (7.16), and Malaysia (6.65). <Figure 69> Protection of intellectual property rights <Figure 70> Protection of intellectual property rights in Top Three Countries <Table 47> Protection of intellectual property rights in Asian countries (Unit: Score, Survey) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Protection of intellectual property rights - To determine the numbers of the researchers performing R&D activities directly - FTE(Full time equivalent) : Work force calculation depending on the degree of devotion to R&D * Example : People who do R&D using their half of working hours count as 0.5 people Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Malaysia : Other countries : Chapter 4. Developing the Asian Innovation Scoreboard 101

115 2) Physical Infrastructure Number of Broadband subscribers per 100 people In 2010, number of broadband subscribers per 100 people of Korea were Following countries were Japan (26.91) and Taiwan (22.68). <Figure 71> Number of Broadband subscribers per 100 people <Figure 72> Number of Broadband subscribers per 100 people in Top Three Countries <Table 48> Number of Broadband subscribers per 100 people in Asian countries (Unit: #) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Number of Broadband subscribers per 100 people - An indicator that shows the level of the infrastructure of information communication based on the population level - Calculated by dividing broadband subscribers by population of 100 people Sources - ITU, World Telecommunication/ICT Indicators Database D/ict/statistics 102 Developing the Asian Innovation Scoreboard

116 3) Physical Infrastructure Number of Internet users per 1,000 people Singapore, Japan, and Korea are ranked at top position among other comparing countries. The number of internet users per 1,000 people for Singapore, Japan, and Korea are 83.6, 82.7, and 80.9 respectively. Since 2005, Asia s number of Internet users per 1,000 people has been consistently increasing. <Figure 73> Number of Internet users per 1,000 people <Figure 74> Number of Internet users per 1,000 people in Top Three Countries <Table 49> Number of Internet users per 1,000 people in Asian countries (Unit: #) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Number of Internet users per 1,000 people - Calculated by dividing internet users by population of 1,000 people. - From survey question of IMD s The World Competitiveness Yearbook. Sources - IMD, The World Competitiveness Yearbook & World Competitiveness Online Chapter 4. Developing the Asian Innovation Scoreboard 103

117 4) Physical Infrastructure Households with Internet connection (%) In 2010, households with internet connection in Korea was 96.8%, which was the highest. Other countries, Japan (85.4%) and Singapore (82%), were above 80%; Taiwan (61.6%). The remaining countries recorded households with internet connection below 25%. <Figure 75> Households with Internet connection (%) <Figure 76> Households with Internet connection (%) in Top Three Countries <Table 50> Households with Internet connection in Asian countries (Unit: %) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Households with Internet connection (%) - An indicator that shows households with internet connection. Here, internet includes world wide web, communication service, e mail, news, entertainment, and data file transmission. - Internet connection includes mobile and wired network. Sources - ITU, World Telecommunication/ICT Indicators Database D/ict/statistics 104 Developing the Asian Innovation Scoreboard

118 5) Physical Infrastructure Number of Mobile phone subscribers per 100 inhabitants In 2010, number of mobile phone subscribers per 100 inhabitants of Singapore was , which was the largest in comparing Asian countries. Following countries are Kazakhstan (121.07), Taiwan (119.91), and Malaysia (119.22). China and India recorded and respectively. <Figure 77> Number of Mobile phone subscribers per 100 inhabitants <Figure 78> Number of Mobile phone subscribers per 100 inhabitants in Top Three Countries <Table 51> Number of Mobile phone subscribers per 100 inhabitants in Asian countries (Unit: #) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Sources - ITU, World Telecommunication/ICT Indicators Database D/ict/statistics Chapter 4. Developing the Asian Innovation Scoreboard 105

119 6) Physical Infrastructure Overall quality of social infrastructure In the category of overall quality of social infrastructure in 2011, Singapore (6.6) is at the highest level. Following countries are Japan (6.0) and Korea (5.9) while China s score is 4.2. <Figure 79> Overall quality of social infrastructure <Figure 80> Overall quality of social infrastructure in Top Three Countries <Table 52> Overall quality of social infrastructure in Asian countries (Unit: Score, Survey) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Overall quality of social infrastructure - An indicator that shows the overall quality of a country s social infrastructure - From survey question of WEF s The Global Competitiveness Report Sources - WEF, The Global Competitiveness Report 106 Developing the Asian Innovation Scoreboard

120 7) Culture Attitudes toward new cultures The most open attitudes toward new cultures is Taiwan. In 2011, the score for Taiwan was 8.15, which was the highest. The following countries were India (8.11) and Singapore (8.00). <Figure 81> Attitudes toward new cultures <Figure 82> Attitudes toward new cultures in Top Three Countries <Table 53> Attitudes toward new cultures in Asian countries (Unit: Score, Survey) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Attitudes toward new cultures - Investigate how each country s culture is opened toward foreign culture and new culture. - Culture of openness contributes to fostering innovation environment - From survey question of IMD s The World Competitiveness Yearbook Sources - IMD, The World Competitiveness Yearbook & World Competitiveness Online Chapter 4. Developing the Asian Innovation Scoreboard 107

121 8) Culture Emphasis on science in school education In the category of emphasis on science in school education predicting science and technology development potential, Singapore, Taiwan, and India are ranked at top position. In 2011, Singapore, Taiwan, and India were 8.01, 7.09, and 6.62 respectively. <Figure 83> Emphasis on science in school education <Figure 84> Emphasis on science in school education in Top Three Countries <Table 54> Emphasis on science in school education in Asian countries (Unit: Score, Survey) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Emphasis on science in school education - After measuring youths interest regarding the importance of science and technology, science and technology development potential is indirectly measured. - From survey question of IMD s The World Competitiveness Yearbook Sources - IMD, The World Competitiveness Yearbook & World Competitiveness Online 108 Developing the Asian Innovation Scoreboard

122 5. Performance 1) Economic outcome Export in high tech industry to manufacturing sector In 2009, Philippines s export in high tech industry to manufacturing sector (65.55%) was the highest. Following countries were Singapore(49.06%), Malaysia(47.11%), and Taiwan (46.42%). Asian countries export in high tech industry to manufacturing sector is considered to be high. <Figure 85> Export in high tech industry to manufacturing sector <Figure 86> Export in high tech industry to manufacturing sector in Top Three Countries <Table 55> Export in high tech industry to manufacturing sector in Asian countries (Unit: %) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Export in high tech industry to manufacturing sector - An indicator that shows how performance through R&D activities of technology intensive industries affects high tech industry - Calculated by dividing export in high tech industry by total manufacturing export * High tech industry: Included in OECD manufacturing category s intensity of R&D investment and 8th Korea Standard Industrial Classification of 30, 32, 33, 353, 242. Sources - IMD, The World Competitiveness Yearbook & World Competitiveness Online Chapter 4. Developing the Asian Innovation Scoreboard 109

123 2) Economic outcome Technology export (Mil. US$) In 2009, Japan s technology export was 21,538 Mil. US$, which was the largest among comparing countries. Following countries were Singapore (5,725 Mil. US$) and Korea (3,582 Mil. US$). Since 2005, Singapore s technology export has been consistently increasing. <Figure 87> Technology export <Figure 88> Technology export in Top Three Countries <Table 56> Technology export in Asian countries (Unit: Mil. US$) Country Korea ,416 1,625 1,897 2,178 2,530 3,582 Japan 9,816 10,259 11,060 13,044 16,354 18,402 20,449 21,080 21,531 21,538 Taiwan Singapore 896 1,255 1,267 1,441 2,026 2,519 3,515 4,160 5,725 Technology export - An indicator that shows the degree of retention of globally competitive technology. Technology export means technology licensing and providing know how of technology transfer. - Technology export is evaluated by TBP(Technology Balance of Payment) manuals to identify all intangible transactions relating trade of technology knowledge and technology service between OECD countries. Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Technology trade statistics report (each year) 110 Developing the Asian Innovation Scoreboard

124 3) Economic outcome Technology Balance of Payment In comparing Asian countries, Japan (3.77, 09) is the only country in which technology export is more actively processed than technology adoption. However, other countries such as Korea (0.42, 09), Singapore (0.34, 08), and Taiwan (0.26, 08) are relatively more active on technology adoption. Since 2005, Japan s technology balance of payment has been consistently increasing. <Figure 89> Technology Balance of Payment <Figure 90> Technology Balance of Payment in Top Three Countries <Table 57> Technology Balance of Payment in Asian countries Country Korea Japan Taiwan Singapore Technology Balance of Payment - Calculated by dividing the technology export by technology adoption fee. Technology balance of payment above 1 means technology export is more actively proceeded than technology adoption. Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Technology trade statistics report (each year) Chapter 4. Developing the Asian Innovation Scoreboard 111

125 4) Economic outcome Industrial added value per capita (PPP$) Singapore s industrial added value per capita (37,869 PPP$, 10), is the highest. Following countries are Japan (28,829 PPP$, 09), Korea (13,924 PPP$, 10), and Taiwan (13,556 PPP$, 10). Since 2005, industrial added value per capita for Singapore and Japan has been increasing while Korea has been maintaining a certain level. <Figure 91> Industrial added value per capita (PPP$) <Figure 92> Industrial added value per capita (PPP$) in Top Three Countries <Table 58> Industrial added value per capita (PPP $) in Asian countries (Unit: PPP$) Country Korea 7,851 7,263 8,244 9,147 10,330 11,971 13,335 14,654 12,878 11,477 13,924 Japan 26,816 23,154 22,155 23,857 25,763 25,629 24,338 24,721 27,520 28,829 Taiwan 10,785 9,526 9,785 10,072 11,060 11,856 12,117 12,612 12,709 11,769 13,556 Singapore 20,183 18,363 18,753 19,641 22,839 24,854 28,169 33,150 34,061 32,018 37,869 China ,064 1,247 1,442 1,723 2,212 2,847 3,098 3,609 India Indonesia ,044 1,083 1,386 Malaysia 1,936 1,789 1,856 2,048 2,366 2,628 2,927 3,279 3,882 3,024 3,718 Philippines Kazakhstan ,013 1,417 2,082 2,556 3,431 2,797 3,743 Industrial added value per capita (PPP $) - Industry s economic performance is figured out by taking into account of the population size. - An indicator that shows the effect of science and technology innovation level on economic performance and especially on industry s economic performance - Calculated by dividing the a country s total industrial added value by population Sources - Korea, Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Other countries: World Bank, World Development Indicators 112 Developing the Asian Innovation Scoreboard

126 5) Knowledge Creation Annual Number of USPTO patents There is huge gap between Japan s annul number of USPTO patents and other countries annual nummber of USPTO patents. In 2010, the number for Japan was 44,814, which is four times more than other countries. Following countries are Korea (11,671) and Taiwan (8,238). Annual number of USPTO patents for Korea and China is rapidly increasing. <Figure 93> Annual Number of USPTO patents <Figure 94> Annual Number of USPTO patents in Top Three Countries <Table 59> Annual Number of USPTO patents in Asian countries (Unit: #) Country Korea 3,314 3,538 3,786 3,944 4,428 4,352 5,908 6,295 7,548 8,762 11,671 Japan 31,295 33,223 34,858 35,515 35,348 30,341 36,807 33,354 33,682 35,501 44,814 Taiwan 4,667 5,371 5,431 5,298 5,938 5,118 6,361 6,128 6,339 6,642 8,238 Singapore China ,225 1,655 2,657 India ,098 Indonesia Malaysia Philippines Kazakhstan Annual Number of USPTO patents An indicator that measures the level of knowledge creation due to science and technology activities. * Investigation on annual number of USPTO patents (granted) based on utility patent. Sources - USPTO, Chapter 4. Developing the Asian Innovation Scoreboard 113

127 6) Knowledge Creation Annual Number of Triadic patents Also, Japan has the largest annual number of triadic patents. The number for Japan was 13,322. Following countries are Korea (1,959), China (667), and Taiwan (221). Since 2005, Japan and Korea have been maintaining a certain level while China has been rapidly increasing. <Figure 95> Annual Number of USPTO patents <Figure 96> Annual Number of USPTO patents in Top Three Countries <Table 60> Annual Number of Triadic patents in Asian countries (Unit: #) Country Korea ,207 1,686 1,961 2,120 2,121 2,053 1,863 1,959 Japan 14,471 13,952 14,125 14,372 14,079 13,828 13,729 13,861 13,744 13,322 Taiwan Singapore China Sources - OECD, Main Science & Technology Indicators Developing the Asian Innovation Scoreboard

128 7) Knowledge Creation Annual Number of PCT patents In 2010, Japan s annual number of PCT patents was 32,150, the largest among comparing countries. Following countries are China (12,296) and Korea (9,669) As for China, the number has been rapidly increasing from 2005 and in 2010, China surpassed Korea. <Figure 97> Annual Number of PCT patents <Figure 98> Annual Number of PCT patents in Top Three Countries <Table 61> Annual Number of PCT patents in Asian countries (Unit: #) Country Korea 1,578 2,319 2,519 2,941 3,549 4,686 5,945 7,064 7,899 8,035 9,669 Japan 9,574 11,911 14,060 17,413 20,267 24,870 27,025 27,743 28,760 29,802 32,150 Singapore China 780 1,729 1,016 1,299 1,707 2,503 3,942 5,455 6,120 7,900 12,296 India , ,285 Indonesia Malaysia Philippines Kazakhstan Sources - WIPO, Chapter 4. Developing the Asian Innovation Scoreboard 115

129 8) Knowledge Creation Number of USPTO patents to annual GERD (per Mil. PPP$) The largest number of USPTO patents to annual GERD (per Mil. PPP$) is Taiwan (0.308). Following countries are Japan (0.257) and Korea (0.219). Other countries numbers are all below than <Figure 99> Number of USPTO patents to annual GERD (per Mil. PPP$) <Figure 100> Number of USPTO patents to annual GERD (per Mil. PPP$) in Top Three Countries <Table 62> Number of USPTO patents to annual GERD (per Mil. PPP$) in Asian countries (Unit: #/Mil. PPP $) Country Korea Japan Taiwan Singapore China India Indonesia Malaysia Philippines Kazakhstan Number of USPTO patents to annual GERD (per Mil. PPP$) - An indicator to measure R&D investment s efficiency in terms of knowledge creation Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : - Patent: USPTO, Developing the Asian Innovation Scoreboard

130 9) Knowledge Creation Number of Triadic patents to annual GERD (per Mil. PPP$) In 2009, the number of Triadic patents to annual GERD(per Mil. PPP$) for Japan was 0.097, which the largest among comparing countries. Following countries were Korea (0.042), Singapore (0.022), and Taiwan (0.010). <Figure 101> Number of Triadic patents to annual GERD (per Mil. PPP$) <Figure 102> Number of Triadic patents to annual GERD (per Mil. PPP$) in Top Three Countries <Table 63> Number of Triadic patents to annual GERD (per Mil. PPP$) in Asian countries (Unit: #/Mil. PPP $) Country Korea Japan Taiwan Singapore China Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : Chapter 4. Developing the Asian Innovation Scoreboard 117

131 10) Knowledge Creation Number of PCT patents to annual GERD (per Mil. PPP$) Japan s number of PCT patents to annual GERD(per Mil. PPP$) is ( 09), the largest among comparing countries. Following countries are Korea (0.181, 10) and Singapore (0.105, 09). The number for Singapore and China are and respectively in <Figure 103> Number of PCT patents to annual GERD (per Mil. PPP$) <Figure 104> Number of PCT patents to annual GERD (per Mil. PPP$) in Top Three Countries <Table 64> Number of PCT patents to annual GERD (per Mil. PPP$) in Asian countries (Unit: #/Mil. PPP $) Country Korea Japan Singapore China India Indonesia Malaysia Philippines Kazakhstan Number of PCT patents to annual GERD (per Mil. PPP$) - Calculated by dividing the number of PCT patents by total R&D investment. * Based on December Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Other countries : - Patents: WIPO, Developing the Asian Innovation Scoreboard

132 11) Knowledge Creation Number of SCI papers per researchers Singapore s number of SCI papers per researchers is the largest. The figure for Singapore in 2009 was 0.280, the largest among comparing countries. Following countries were Malaysia (0.245, 08), Taiwan (0.205, 09), and India (0.169, 05). The figures for Japan and China in 2009 were in low rank, recording and respectively. <Figure 105> Number of SCI papers per researchers <Figure 106> Number of SCI papers per researchers in Top Three Countries <Table 65> Number of SCI papers per researchers in Asian countries (Unit: paper/researcher, FTE) Country Korea Japan Taiwan Singapore China India Malaysia Number of SCI papers per researchers - Measure the R&D accomplishment s productivity, considering the number of researchers. - Calculated by dividing each country s number of SCI papers by total number of researchers (FTE) Sources - Japan, China, Singapore, Taiwan: OECD, Main Science & Technology Indicators Korea: National Science and Technology Commission, Survey of R&D activities (each year) - Malaysia: Other countries: - Paper: Thomson ISI(Reprocessed) Chapter 4. Developing the Asian Innovation Scoreboard 119

133 12) Knowledge Creation Citations per paper per period of 5 years In the category of citations per paper per period of 5 years, Singapore, Japan, and Korea are in top positions. Citations per paper during 2006~2010 for Singapore, Japan, and Korea were 5.17, 4.84, and 3.57 respectively. Recently, Singapore s citations per paper is increasing rapidly. <Figure 107> Citations per paper per period of 5 years <Figure 108> Citations per paper per period of 5 years in Top Three Countries Country <Table 66> Citations per paper per period of 5 years in Asian countries 1996 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~2009 (Unit: #) Korea Japan Taiwan Singapore China India Malaysia Kazakhstan ~2010 Citations per paper per period of 5 years - Figure out the knowledge creation level occurred from science and technology activities through paper s quality standard. - Investigate citations per paper during recent 5 years. Sources - Thomson ISI(Reprocessed) 120 Developing the Asian Innovation Scoreboard