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Innovation Congress in Astana. Industrial Innovation in Korea. May 22, 2014 Key-Hyup Kim, Ph.D. Advisor Advanced Institutes of Convergence Technology Seoul National University. Table of Contents. Introduction Main Industries in Korea Current R&D in Korea KFS for Industrial Innovation

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Innovation Congress in Astana

Industrial Innovation in Korea

May 22, 2014

Key-Hyup Kim, Ph.D.


Advanced Institutes of Convergence Technology

Seoul National University

Table of contents
Table of Contents

  • Introduction

  • Main Industries in Korea

  • Current R&D in Korea

  • KFS for Industrial Innovation

  • Implication for Kazakhstan

  • Future Cooperation

  • Concluding Remarks



  • Economic Miracle of Korea by Compressed Growth

    $ 67 /p in 1953 → $ 23,679 /p in 2012 (IMF)

  • “Land of Morning Calm” to “Dynamic IT Korea”

    Highly digitally connected country

  • Manufacturing Industries and Export as Drivers

    for Continuous Economic Growth

  • Limitation of Imitation & Need for Real Innovation

    “Catch-up” phase to “Front runner” stage

  • Kazakhstan’s Industrial Innovation for 21st Century


Main industries in korea
Main Industries in Korea

Five Major Manufacturing Industries

  • Information Technology Industry

    • Semi-conductors, Displays

    • & Mobile phones

  • Shipbuilding Industry

  • Automobile Industry

  • Steel Industry

  • Petrochemical Industry


Main industries in korea1
Main Industries in Korea

A. Information Technology Industry (’12)

  • Semiconductor Business(M.S. 13.9%, 3rd)

     Dramatic achievement since 1981

     Focused on DRAM market

    Samsung and Hynix, 41% & 23% M.S.

     Concerted Effort by the Government

    “Semiconductor Promotion Plan” (’81)

    GRI, ETRI’s R&D Effort with Industries

  • Display Products

     42.1 % of Global M/S by Samsung & LG

     Global LCD/LED/PDP/OLED Market Development

  • World Leader in Mobile Phones (Samsung)


Main industries in korea2
Main Industries in Korea

B. Shipbuilding Industries (’12)

  • # 1 Global Leader in the World (M.S. 36.2%)

  • First Shipbuilding in ‘70’s by Hyundai Heavy Industries

  • Currently More Value Added Engineering Business

  • Main Products

     LNG Carrier, VLCC, Oil tanker, Oil drilling ship

    FPSO (Floating Production Storage Off-loading)

  • Advanced Design & Manufacturing Technologies with

    Project Management Capability


Main industries in korea3
Main Industries in Korea

C. Automobile Industry (’12)

  • 5th in the World (Market share 5.8%)

     Hyundai, KIA, GM-Korea, Ssangyong, S-Ranault

  • Driver for Growth of Many Related Industries

     More than 20,000 parts in a Car

     Many SMEs involved in as suppliers

     Main Job creator for Korea (~7.3% overall)

  • Energy & Environmental Issues

  • Electric Car and New Battery Technologies

  • Intelligent Transportation System


Main industries in korea4
Main Industries in Korea

D. Steel Industry(’12)

  • Current Position of Korean Steel Industry

     Rank 5th in Production/yr, Rank 6th in Export

     Global Production: 3.6%, Consumption: 4.2%

     POSCO ranked 5th, Hyundai Steel ranked 25th

  • “FINEX Method” Development by POSCO

     Revolutionary Production Technology

     Economical and Eco-Friendly Technology

    Cost Reduction by 20%, Pollution Reduction by 25%

    Total R&D Investment : $ 130 Mil. from 1992


Main industries in korea5
Main Industries in Korea

E. Petrochemicals Industry(‘12)

  • Global 5th Ethylene Capacity in the World (M.S. 5.2%)

  • Big Oil Refinery & Naptha Crackings for

    Energy & Bulk Plastics Raw Materials

  • Huge Petrochemicals Capacity (55 M Ton/Y)

     PE, PP, PVC, PS, PET

  • All Licensed Technologies from Overseas

  • Need More Value-added Products for Survival

  • Global Leading Chemical R&D Strategy


Current r d in korea
Current R&D in Korea

A. Korean National Innovation System (KNIS)

  • Innovation Actors & Network

     Korean Government

     Government Research Institutes (GRIs)

    KIST,ETRI, KITECH and Others (26 institutes)

     Universities : SNU, KAIST, POSTECH …

     Private Sectors : Large Corporations & SMEs

  • Linkers among Innovation Actors

     TIC (Technology Innovation Center)

     RIC (Regional Innovation Center)

     Technology Parks

     Many Ind. – Univ. – GRIs Clusters


Current r d in korea1
Current R&D in Korea

B. KNIS - Input

  • R&D Expenditure and Number of Researchers per Year


Current r d in korea2
Current R&D in Korea

C. KNIS - Output

  • S&T Competitiveness, Patent, & SCI Papers

1) IMD (International Institute for Management Development)

2) WIPO (World Intellectual Property Organization)

3) PCT (Patent Cooperation Treaty)


Current r d in korea3
Current R&D in Korea

D. Roles of the Innovation Actors

  • Government

     Development of Science & Technology Infrastructure

     Established Korea Institute of Science & Technology in 1966

    Established several GRIs as spin-offs from KIST in ’70s

    Established Korea Advanced Institute of Science & Technology

    (KAIST) in 1975

     Direct R&D Support to Universities and GRIs

     Preferential finance and tax concessions for Industry R&D

  • University

     The rapid expansion of S&T human resource education

     More teaching-oriented than research-oriented

     Recent emphasis on more basic & applied research


Current r d in korea4
Current R&D in Korea

E. Past Role of the Korean Innovation Actors

  • GRIs

    Important role in industrial R&D in ’60s and ’70s

    Helped firms to acquire foreign technology

    Informally diffused technology thru reverse-engineering

    Supplied experienced researchers for Industry

     Joint research & development with large firms

     Backbone of national R&D since 1982

  • Private Sectors

    Large firms established corporate R&D centers in the ‘80s

    Samsung, LG, Hyundai and SK group, etc.

     SMEs started R&D activities rather recently


Current r d in korea5
Current R&D in Korea

F. Transformation of Korean GRIs


Current r d in korea6
Current R&D in Korea

G. Strength of Korean R&D

  • Well trained Human Resources

  • Strong Industry base to Commercialize R&D result

  • One of the best IT Infrastructure

  • Good Reverse Engineering Records

    Imitation & Catch-up of New Products & Process

  • Speedy Development & Fusion Capabilities


Current r d in korea7
Current R&D in Korea

H. Weakness of Korean R&D

  • Research & Development Culture Problems

     Too Short-term and Short-sighted

     Lack of Tolerance and Patience

  • Shallow Basic Science Foundation

    Physics, Chemistry, Math, and Biology, etc.

  • Mainly Product-oriented R&D by Reverse Engineering

  • Very Poor Global Networking and Cooperation

  • Science &Technology : Not popular to young people


Iv kfs for industrial innovation
IV. KFS for Industrial Innovation

Key Factors for Success

  • Government Driven Economic Development in ’60~’70s for

    Heavy-Chemical Industries & followed by IT Industry

  • Big Chaebols’ Well Organized Management

  • Trained HRs internally and Experienced HRs from the U.S.

    & Japan , etc.

  • Successful Catch-up Strategies, But Limitations Now

  • Rapid Transformation from Imitation to Innovation

  • Fusion with Information Technologies for Up-grading


Iv kfs for industrial innovation1
IV. KFS for Industrial Innovation

  • From Fast Follower toInnovation Leader

  • Total R&D Investment (~3.7% of GDP)

    Private Sectors : 71.1%, Government : 28.9%

  • Difficult Paradigm Shift

  • Gradual Erosion of Competitiveness in Industry

  • How to improve R&D productivity

    R&D management & MOT

     R&D globalization & cooperation

  • Bridging the Valley of Death for Commercialization

Front Runner





Fast Follower


V implication for kazakhstan
V. Implication for Kazakhstan

  • Industrial Innovation is Critical for Economic Growth

  • Science and Technology are Backbone for Innovation

  • S&T is High Return on Investment for Nation

  • Korea Case Proves Power of Industrial Innovation

    for Knowledge Economy Build-up

  • National Economic Plan is Crucial & Important

  • Need Sustainable R&D Investment for Many years

  • Active Industry-University-Government Cooperation


V implication for kazakhstan1
V. Implication for Kazakhstan

  • Industry

  • Lead Industrial Innovation by R&BD

  • Leverage own Natural Resources

  • Expand Absorptive Capacity asap

  • University and GRIs

  • Educate top-notch S&T people

  • Lead R&D for cooperation programs

  • Attract foreign talents in S&T areas

  • Government

  • Establish National Innovation system

  • Facilitate Industrial Innovation

  • Long term commitment for Innovation


Future cooperation
Future Cooperation

Global Economy in Rapidly Changing Environment

  • Globalization and Speed: Internet and One Village

  • Rapid Economic Growth of Emerging Nations

  • Korean Experiences in Industrial Innovation can be

    beneficial for other nations

  • Limitation on Natural Resources: Oil & Materials

  • Energy, Environment, Water and Sustainability

  • Aging Society and Healthcare for Quality of Life


Future cooperation1
Future Cooperation

Possible Programs to Explore

  • Each Nation’s GRIs Joint Workshop to Identify Priority

  • GRIs as Innovation Hub for Global Cooperation for Industry,

    Academia, GRIs among Nations

  • Environment & Energy Programs as Common Interest

    (Ex. Alternative Energies and Energy Recycling)

  • Korea ODA and KSP (Knowledge Sharing Program)

  • Strengthening Competitiveness of SMEs by Cooperation

    (Ex. KITECH’s Root Industries Programs)


Concluding remarks
Concluding Remarks

To Save the Earth and Future Generations

  • Science and Technology for our Future

     Innovation as New Growth Engine Creation

  • Networking and Innovation in Asia & the World

    Cooperation among R&D Communities

     Open Innovation for R&D Productivity

  • Firm National Innovation System for Kazakhstan

  • Sharing Best Practices between Kazakhstan & Korea

  • Bright Future by Industrial Innovation in the 21st Century


















Thank you

for your attention

and active congress !

Key H. Kim, Ph. D.


E-mail: [email protected]