Development and Management of Innovation Clusters in Korea and Policy Implication
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1 Development and Management of Innovation Clusters in Korea and Policy Implication 3rd International Conference on Science, Technology, Innovation (STI) and Development (STEPI-World Bank) Seoul, Sep Deok Soon Yim, Ph.D. Senior Research Fellow Science and Technology Policy Institute (STEPI)
2 Contents Development with Science and Technology Issues of Innovation Cluster Innovation Cluster Policy in Korea Daedeok Innopolis Technopark Conclusion and Discussion Note: The earlier version was presented in various workshops and training programs 2
3 Research Background and Questions Science and Technology is a key factor for Korea s development. And STI park is one of the main S&T policy focus So many Science, Technology and Innovation Parks in the world. Are they successful? What are the Korean Experience and Policies? Are there any lessons to be learned from Korea? Conclusion and Discussion 3
4 Development with Science and Technology
5 Korea s Development with Science & Technology 1970s 1980s 1990s 2000s 2010s S&T Policy Actor Industrial Policy Per Capita GDP Technology Imitation Technology Imitator Export- Oriented Light Industries 255 US$ (1970) Heavy and Chemical Industries 1,660 US$ (1980) Global S&T Player Fundamental R&D National R&D Program Second-tier Innovator Technology Intensive Industries 6,303 US$ (1990) Top-tier Technology Leader High Tech Industries, Innovation Clusters 11,292 US$ (2000) New Future Industries 20,562 US$ (2010) 5
6 Characteristics of Korea's STI development Awareness of the STI importance from both public (government) and private sectors Government driven development Harmony with industrial development From field technology applied tech. fundamental tech. basic tech. 6
7 Characteristics of Korea's STI development Establishment of technological innovation system: Gov't sponsored labs, S&T universities, ST Parks Rapid Increase of R&D investment: Ratio of R&D investment (4.15% (2013) No. 1 in the world) 7
8 Characteristics of Korea's STI development Gov t Policy Industry R&D Inst. S&T Univ. S&T Park 8
9 Characteristics of Korea's STI development Innovation Actors 1970~ ~ ~ Gov't Industry University Gov't labs. Promotion Agency Finantial Inst. Regional Gov't 9 9
10 Issues of Innovation Cluster Issues
11 Traditional industrial complex vs. modern innovation cluster Guro industrial Complex (1970) Guro Digital Complex (2006) 11
12 Guro: Shopping Cluster? Source: [ 조선일보 ] 2006 년 02 월 16 일 12
13 Sinchon: Entertainment Cluster? 자료 : 조선일보 자료 : yahoo.co.kr 13
14 So many S&T Parks and Innovation Clusters Type Science Park Science Town Technology Park Techno-park Techno-valley??? valley Technopolis Innopolis Innovation Cluster What is the difference? - Focus (science, technology, innovation) - Size of Area - History 14
15 From Science Park to Innovation Cluster Generation 1st Characteristics Science Park: Science and Technology-Push 2nd Technology Park: Market-Pull 3rd 4th Innovation Cluster: Interaction between S&T and Market Business Resort: Future Generation Innovation Cluster Virtual network + Quality of Life? Source: Modified from (Yim, 2007) 15
16 Def. of Innovation Cluster An innovation cluster is a networked group of innovation actors and location(s), where the actors are creating economic and technological values by interacting, competing and collaborating with other actors in innovation processes, which functions as the source of innovative activities for the region/nation, and has global competitiveness (Yim, 2008; Yim, 2002). 16
17 S type curve of Innovation Cluster Life Cycle Max. of total system Market, Acceptance, Size of System (Yim, 2008) Begin Grow Expand New Start, Maintain, Decrease Time 17
18 Evolutionary Process Initial Conditions Location, Technology, People, Culture, Venture Capital and Consulting Firm, Other Infrastructure Down-stream Evolution (Yim, 2000) From Production to Research Up-stream Evolution (Yim, 2000) From Research to Production 18
19 Two development Patterns of Innovation Cluster Upstream Development Pattern Downstream Development Pattern Primary Value Functions R&D (S&T Knowledge Creation) Production (S&T Knowledge Transfer) Marketing (Creation of Value) Secondary Value Functions Human Resource, Venture Capital, Information Supply, Consulting Service 19
20 Key Success Factors of Successful Clusters Policy & Management Location R&D Base Culture Capital Large market? Human Resource Incubator 20
21 Success Rate of Innovation Cluster? - Many government s both local and national are trying to make successful innovation clusters (STPs). - How many of them are successful? - Can they produce the expected results? - What are the reasons for this phenomena? 21
22 Innovation Cluster Policy in Korea
23 Direction of innovation cluster policy in Korea Existing ones - S&T Parks - Technoparks - Industrial Complex Change them from simple agglomerated complex into networked Innovation Cluster New ones - National S&T Complex - Regional Gov t initiated Technology Complex Plan and put the cluster concept from the plan Innovation Cluster 23
24 Innovation cluster and concerned ministries (As of year 2017) President Presidential Committee on Regional Development Ministries (Central Gov t.) Ministry of Science and ICT Ministry of Trade, Industry and Energy Ministry of SMEs and Startups Ministry of Health and Welfare - Innopolis - Industrial complexe - Technoparks - Center for Creative Economy and Innovation - Osong Bio-technopolis Regional Gov t - Digital Media City (Seoul) - Gwanggyo Technovalley, - Pangyo Technovalley (Gyeonggi Province) 24
25 Overview of Innovation cluster policies (As of year 2017) Paradigm Authority Innovation Cluster Aim of Policy Agency Ministry of Science and ICT Belief on the Effects of Innovation coming from organic clustering of Actors in the cluster Ministry of Science and ICT Daedeok Innopolis Industrial Complex To make R&D based innovation cluster Daedeok Innopolis Management Office To make manufacturing oriented industrial innovation complex KICOX (Korea Industrial Complex Corp.) (or same region, or complex) Ministry of SMEs and Startups Technopark, Center for Creative Economy and Innovation To support technological innovation at the region Foundation Ministry for Health, Welfare and Family Affairs Osong Bio-technopolis To create bio innovation cluster MM and Development Task Force office Regional Gov t. Digital Media City, Gwanggyo Technovalley, Pangyo Technovalley To create regional innovation cluster Agencies of Regional Governments Policy direction Changing the simply agglomerate R&D actors to networked actors Creating miniclusters with industry, academia, and research centers Supporting technology transfer, incubation and providing equipments Creating new innovation clusters for specific purposes Creating new innovation clusters for specific purposes 25
26 Innopolis
27 Overview of Daedeok Innopolis (As of year 2017) Establishment Location Size Employment Tenant Organizations Major Fields (as of 2007) Current status Nov. (Plan Announced) Daedeok, 27.8Km2 70.4Km2 69,679 (13,484 Ph.D.s) - 1,611 Organizations in Total, including 60 (public: 25, and private: 35) research institutes, 7 Universities and 1,521 companies - 31 of start-ups have gone public at KOSDAQ) IT (40%), BT (14%), Material Science (9%), Chemical Engineering (8%), Energy Resource (8%) - Symbol of Korea's Science and Technology, - Hub for high-tech commercialization, creative economy Source: 27
28 Historical Development of Daedeok Innopolis Stage Period Features Establishment Concept for the plan (1973) - Construction completed and Government Research Institutes began to move in ( ) Innovation Creation Formation of Innovation Cluster Growing Innovation Cluster Private research institutes began to move in (1993) - Various S&T achievements from R&D - Daedeok Science Town Administration Law enacted (1999) - Many venture companies spin-offed from the government research institutes right after 1997 economic crisis - High-tech start-ups started moving in, DST renamed as (2004) - Daedeok Special R&D Zone Law enacted (2005) - Establishment of Daedeok Innopolis with new Daedeok Innopolis Management Office (HQ) and bigger budget (2005) 28
29 Expansion of Innopolis to other regions Source: innopolis.or.kr 29 29
30 Change of policy paradigm Model Science Park Model S&T and Market Interactive Park Model Innovation Cluster Model Policy Direction Science Based Complex (S&T Island Approach) S&T + Production + Market Interaction - Network & Synergy - Open Innovation System 30
31 Technopark
32 History of Technopark Source: 32
33 Vision and Mission of Technopark Source: 33
34 Role of Technopark Source: 34
35 Expansion of Technopark to other regions 35
36 Governance and Mngt. of Technopark Related Actors Collaboration Central Gov t Ministry Ministry of SMEs and Startups Policy Guidance Regional Government Each Province or Metropolitan City Direct Guidance Research institute University Regional branch of Government Research Institutes + Private Research Institutes Universities in the region Weak Collaboration Weak Collaboration Each Technopark Mngt. Office (Foundation) Industry Technology based venture companies Weak Collaboration Other Public Citizen Minimum Collaboration 36
37 Conclusion and Discussion
38 Why many innovation cluster fail? - Gov t initiated clusters do not have exact success factors as can be found in naturally created ones - Fail to understand the characteristics of innovation cluster (Long time project, big budget requirement and so on) - Neglecting the S/W side of innovation cluster, mainly the management and governance system - Mismatch between the management capability, authority, and resources 38
39 Software side policy needs to be incorporated - S/W policy is equally important - Governance and management are important but neglected - There is a difference between western culture and east-asian culture. (Horizontal vs. Vertical socio-political system) - How to incorporate S/W perspectives in the master plan? - How to secure constant support to make sustainable innovation cluster? 39
40 Relationship of Performance Factors Governance Other given conditions Location Management Body Policy / Management H/W factors Performance 40
41 Activities of Related bodies for the Development of Innovation Cluster Activity Industries, universities, Research institutes Administrative or Management Body Construction company Innovation Cluster Planner Policy Researcher Development 41
42 Integrative Management W/ Good Governance Management Body for Innovation Cluster Policy Research Infrastructure Building Promotional Programs Administrative Support - Cluster policy - Global trend monitoring - Community Center - Transportation - Security Service - Entertainment - Community Service - Networking - Marketing - Incubation - Global assistance - Liaison function - Gov t budget - Admin. Service - External affairs 42
43 Evolutionary Process of Univ-Ind-RI relationship Evolutionary Stage 1 st Stage (Planning cluster) 2 nd Stage (Activity cluster) 3 rd Stage (Integrated cluster) Contents Participation in the planning process of in novation activities Some activities among innovation processe s are happening like joint R&D Compete and collaborate in almost all the i nnovation process so that industry, universit y and research institutes are very closely con nected and prosper as the member of whole IUR cluster 43
44 Communication, Space and Culture Starbucks: Knowledge Place Pojangmacha: Korean Bar 44
45 Thank You! Any question? Deok Soon Yim, Ph. D. Senior Research Fellow Science and Technology Policy Institute
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