Tech Startup Growth Hacking 101 - Basics on Growth Marketing
Innovation in Korea
1. Innovation in Korea
Some General Issues
VTT, Finland
October 23, 2013
Seogwon Hwang, Ph.D.
Research Fellow at STEPI
hsw100@stepi.re.kr
2. Contents
• About STEPI
• Status quo of Korean Innovation Activities
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
* This is the material modified based on many slides provided by
Dr. Yongsuk Jang in STEPI
3. Contents
• About STEPI
• STI in Korean Development
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
4. STEPI: Roles and functions
• Conduct research and analyze issues pertaining to STI
• Provide government agencies with policy ideas and suggestions
for the promotion of innovation
• Identify policy issues to effectively deal with future challenges
• Suggest strategic options in technology development for the
government as well as industry
• Create and disseminate S&T policy materials, data and
information
5. STEPI: Position
President
PACST
Prime Minister
Presidential Advisory Council on
Science and Technology
MSIP
MOTIE
Ministry of Science, ICT
and Future Planning
Ministry of Trade, Industry
and Energy
KRCF
NRCS
Korea Research Council of
Fundamental Science & Technology
(13 GRIs)
SMBA
The National Research Council for
Economics, Humanities and Social
Sciences
Small and Medium Business
Administration
ISTK
Korea Research Council for Industrial
Science & Technology
(14 GRIs)
STEPI
Science and Technology
Policy Institute
6. STEPI: Organization
President
Prime Minister
Ministry of
Science, ICT and
Future Planning
Ministry of
Trade, Industry and
National Research Council for Economics, Humanities and Social Sciences (NRCS)
Energy
and Other Ministries
Research Advisory
Committee
President
Auditor
Vice President
Division of Planning and
Management
Division of
Division of
Division of
Center for
Innovation
Industrial
Global
Human
Public
Policy
Innovation
Policy
Resources
Research
Foreign
Countries
Division of
Basic and
Research
Research
Research
Policy
Center for
HRST Joint
Future
Research
Studies
Center
Local
Governments
7. STEPI: History
Originated in 1967 as a Division of KIST
The Center for Science
and Technology Policy
(CSTP) was established.
CSTP was renamed
the Science and
Technology Policy
Institute (STEPI).
Decision made to establish
STEPI under the KCESRI
based on the “Law on the
Establishment, Operation and
Promotion of Government
Sponsored Research Institute”.
SCIENCE AND
1987.1
TECHNOLOGY
POLICY
2005.7
INSTITUTE
1993.5
2011.8
1999.5
2012.5
The KCESRI was
reorganized into the
National Research Council
for Economics, Humanities
and Social Science (NRCS)
Dr. Jong-Guk SONG was
appointed as the 12th
president of STEPI.
The 25th Anniversary
8. STEPI: Researchers and Staffs
Total of 137 Employees
Administrative Staff
Executive
1
22
Research Staff
114
Academic Backgrounds of the Researchers
14
(24.1%)
11
(19.0%)
12
(20.7%)
Economics
21
(36.2%)
Business Administration
Political Science & Science and Technology Policy
Science and Engineering
9. STEPI: Researches
60%
Grant Researches
• Basic Research
• Issue-focused
• Pilot Research
• Contract-outs
Contract Researches
• Agency-directed
• Customer-oriented
40%
* Government Money,
eventually
10. STI Policy Review
• Overview of Korean STI
• An Interdisciplinary
Journal on STI Policies
around the world
• www.stipolicyreview.net
11. Question 1: Innovation policy researches for business?
• Critique of distance between policy (research) and business
reality
• Can STEPI do help firms to make profits from innovation?
Question 2: More Evidence Based Policy?
• Much more facts and evidences needed for decision making
• Construction of indicators and indices based on S&T data
12. Contents
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
14. Korea's Economic Development, 1953-2010
$23,679
(2012)
2nd Poorest
Country in 1945
15th Largest
Economy in 2012
$67
(1953)
Source: The Bank of Korea, IMF
• 1953-1970: Per Capita GNP (current US$, 1975 base year)
• 1971-2010: Per Capita GNI (current US$, 2005 base year)
19. Total Number of Researchers Growth
Total Number of Researchers
375,176
138,438
2,962
1964
1997
Total Number of Researchers
Source: NTIS (www.ntis.go.kr)
2012
20. Major S&T Achievements
International Patents
Science & Technology Articles
11,846
(5th) 13,233
(3th)
44,718
(11th)
7,870
(18th)
4
1,891
(53th)
10 30
1981
1997
2011
288
1984
Number of Articles (Ranking)
1997
No. of PCT Applications
2012
No. of US Granted Patents
Science & Technology Competitiveness (IMD)
3th
2th
14th
세계
순위
12th
14th
21th
5th
7th
10th
14th
14th
17th
24th
2002
6th
13th
17th
2001
6th
8th
2003
Science Competitiveness
2004
2005
Source: NTIS (www.ntis.go.kr)
2006
Technology Competitiveness
2007
2008
2009
21. Question 3: many articles and patents but then?
• Low R&D productivity in terms of commercialization
• tech transfer, spin-off, etc.
Korea
US
University
GRI
total
University
GRI
total
Royalty Revenue (Million$) (C)
52
101
153
1,764
576
2,340
R&D Expenditure (Million$) (D)
5,645
5,993
11,638
52,232
5,366
57,598
R&D Productivity (%) (C/D)
0.9
1.7
1.3
3.4
10.7
4.1
Source: MOTIE, 2011
22. Contents
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
23. Industrial Shifts and STI Policies
1990s
1980s
1970s
1960s
Import Protection
fostering exportoriented light
industry
expanding
technological
capability
(absorptive)
import liberalization
expanding
investment
in technological
development
training skilled
manpower
strengthen
technological
innovation
establishment of
nationwide IT
infrastructure
24. Industrial Shifts: Select and Focus
Demand Side
•SelfSustain
•ImportSubs.
Light
Industries
•Import
Protection
•ExportOrient
Supply Side
•Mfg.
Capacity
•Industrial
Seeds
Heavy
Industries
•Import
Tech.
•Tech.
Capability
•Open
Market
Assembly
&
Processing
Industries
•Expand
R&D
•Skilled HR
•Higher
Valueadded
IT
Industries
•Innovation
Capability
•Industrial
Diversificat
ion
New
Growth
Engines
•original
Tech.
25. Evolution of Korean STI Policies I
Innovation
Technology Catching-up
Institutional Building
1962
19661967
1st 5-Year
Economic Plan
1971
1981
Korea Advanced Institute
of Science (KAIS)
Ministry of S&T
(MOST)
Korea Institute
of S&T (KIST)
1982
1987
1991 1992
Industrial Generic
Technology
Development Program
(IGTDP)
National R&D
Program (NRP)
Technology
Development Promotion
Act
2004 2008 2013
1997
MSIP
Financial
Crisis
Information and
Communication R&D
Program (ICRP)
Highly Advanced
National Project
(HAN)
Deputy Prime
Minister of MOST
(OSTI)
MEST & MKE
26. 1960s
•
Industrial Policies
•
STI Policies
-
Import-Substitution
Industries (Textiles,
Plywood, etc.)
Expand Export-oriented
Light Industries (export
subsidy, preferential
financing)
Five-Year Economic Plans
From Agriculture to
Labor-intensive Light
Manufacturing Industries
-
Establish Scientific and
Technological Infrastructure
(e.g., KIST)
Initiate S&T Education (e.g.,
KAIS)
Promote Foreign Technology
Imports
Establishment of Ministry of
S&T (MOST)
-
-
-
27. 1970s
•
Industrial Policies
•
STI Policies
-
Expand Heavy &
Chemical Industries
(e.g., machinery,
shipbuilding, chemicals,
marine science,
electronics, electricity)
Capital and Technology
Imports
Strengthen Exportoriented Industrial
Competitiveness
Foster Chaebols (e.g.,
Samsung, Hyundai, LG)
-
Expand Technical Training
Improve Institutional
Mechanism for Adapting
Imported Tech. (GRIs)
Invite eagerly Korean
Scientists trained overseas
Promote Research
Applicable to Industrial
Needs
Promote Imports of Foreign
Tech. (imitation, reverse
engineering, imports of
capital goods)
-
-
-
-
-
28. Evolution of Korean STI Policies II
S&T Leadership
Technology Catching-up
Institutional Building
1962
19661967
1st 5-Year
Economic Plan
1971
1981
Korea Advanced Institute
of Science (KAIS)
Ministry of S&T
(MOST)
Korea Institute
of S&T (KIST)
1982
1987
1991 1992
Industrial Generic
Technology
Development Program
(IGTDP)
National R&D
Program (NRP)
Technology
Development Promotion
Act
2004 2008 2013
1997
MSIP
Financial
Crisis
Information and
Communication R&D
Program (ICRP)
Highly Advanced
National Project
(HAN)
Deputy Prime
Minister of MOST
(OSTI)
MEST & MKE
29. 1980s
•
Industrial Policies
•
STI Policies
-
Economic Slowdown due
to the oil shock / Trade
Imbalance
Restructuring heavy and
chemical Industries
Expand Technologyintensive Industries
Encourage Human
Resource Development
and Improve Productivity
of Industries
Promote SMEs
-
Reluctant to TT from
Advanced Economies
Pressure on Strong IPR
Develop and Acquire Toplevel Scientists and
Engineers
Perform National R&D
Projects Efficiently (e.g.,
NRP, IGTDP, AEECTP, ICRP)
Promote Industrial
Technology Development
Promote Collaborative R&D
(San-Hak-Yun)
-
-
-
-
-
30. 1990s
•
Industrial Policies
•
STI Policies
-
Financial Crisis and Deep
Restructuring of
Industrial and Financial
Structure
From Imbalanced to
Balanced Growth
Strategy
Investment for Network
Infrastucture
Information Tech. (e.g.,
Computer,
Semiconductor)
-
From Imitation to Indigenous
Innovation
Realign National R&D
Projects
HAN Project (Long-term,
Large-scale)
Construct S&T Infrastructure
Basic Research at
Universities
-
-
-
-
31. Evolution of Korean STI Policies III
S&T Leadership
Technology Catching-up
Institutional Building
1962
19661967
1st 5-Year
Economic Plan
1971
1981
Korea Advanced Institute
of Science (KAIS)
Ministry of S&T
(MOST)
Korea Institute
of S&T (KIST)
1982
1987
1991 1992
Industrial Generic
Technology
Development Program
(IGTDP)
National R&D
Program (NRP)
Technology
Development Promotion
Act
2004 2008 2013
1997
MSIP
Financial
Crisis
Information and
Communication R&D
Program (ICRP)
Highly Advanced
National Project
(HAN)
Deputy Prime
Minister of MOST
(OSTI)
MEST & MKE
32. 2000s
•
Industrial Policies
•
STI Policies
-
Searching Sustainable
Growth based on Tech.
Innovation
“Select and Concentrate”
Differentiated Strategies
for Major Industries,
Future Strategic Industries
Regional Development
Entrepreneurships
(Venture Capital, KOSDAQ)
Globalization (FTAs with
Chile, U.S., EU, China)
-
New Growth Engines
(Bio/Nano/IT, Green Growth,
Creative Economy)
Develop Regional Innovation
Clusters
Decentralization of R&D
Authorities but Emphasis on
Coordination
Five-Year S&T Principal Plan
Efficiency of Gov. R&D
Investments (Evaluation
Emphasis)
National Technology Road
Map (NTRM)
Private Sector-led NIS
-
-
-
-
-
33. Standing NSTC in 2011
For Effective
Coordination
President
Prime Minister
NSTC
Standing NSTC as a Control
Tower with STI Policy
Coordination and R&D Budget
Allocation Power
MEST
MKE
NRCS
KRCF
ISTK
26
Policy
Inst.
13
GRIs
14
GRIs
Others
34. New Governance for Creative Economy (2013)
For Driving
‘Creative Economy’
President
Prime Minister
MOSF
MSIP
S&T
MOTIE
ICT
NSTC
Economy
Budget
Trade
Industry
Energy
* MOSF: Deputy Prime Minister and Ministry of Strategy and Finance
* MSIP: Ministry of Science, ICT and Future Planning
* MOTIE: Ministry of Trade, Industry and Energy
Others
35. Question 4: Still “Select and Concentrate”?
• Uncertainty Uprising: From Imitation to Innovation
Wibro: Almost diminishing
WIPI: Withdrawn just as a useless regulation in the walled garden
Public Certificate for online exchange: ?
Question 5: One Company Risk?
• One extremely big company for a country
System risk management
Resilience with Innovation Capability
Capability of Human Resources, Entrepreneurship and Mobility
36. Contents
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
37. Triple Helix for Innovation
• Government (GRIs)
• Government-sponsored
Research Institutes (GRIs)
• Research for Public Purposes
• Applied Research
• Universities
• Supply S&Es
• Curiosity-driven
• Basic Research
• Firms
• Commercialization
• Produce Innovations
• Development Research
38. Evolution of Korean Triple Helix
GRI-led / Univ.-supported
Industrial Innovation!
2000’s
90’s
80’s
Firms
70’s
GRIs
60’s
Univ.
39. Roles of GRIs
• Leading Player for Korean Innovation
• Independent non-government organizations with government’s
financial supports
• Operating under the GRI Laws and civil laws
• Conduct about Half of Public R&D Investments (13% of the total
expenditure in 2011)
• KIST was established in 1966 with help of USAID
• 27 (13 under KRCF & 14 under ISTK) S&T GRIs (as of 2011)
• Role Shifting
• Absorbing & Internalizing imported foreign tech. (1970s)
• Modifying imported tech./Developing domestic tech. (1980s)
• Advancing catching-up tech. (1990s)
• Focusing on Endogenous Tech. (2000s~)
• Major Function: Providing Needed Tech. to Industries
• Challenges
• As Private R&D Labs and University Researches Grow,
• Need to Redefine its Role
41. KIST: The First Korean GRI
• Korea-US Summit in 1965
• Between then Presidents, Park
Chung Hee and Lindon B. Johnson
• ‘Foundation of a research institute
for Korea’s Growth in industrial
technology and applied science’
• Under USAID Program
• Models <
vs.
>
• Bell Lab: Research for Basic
Science
• Battelle: Industry-oriented Tech.
Dev. for Catching-up
• Growth
• 1966: 50 FTE & 200 M.KRW
• 2010: 700 FTE & 250 B.KRW
• Principles
• Close to Industries
• Operational Autonomy
• Stable Funding
• Transparency
42. Roles of Universities
• Reservoir of High-Caliber S&E Human Resources
•
•
•
•
•
Korea High Fever on Education (College Enrollment Rate: ~70%)
More than 400 Higher Education Institutes
Holds about 70% of S&E Ph.D.s
Excessive Teaching Orientation
Conduct Only 10% of Gross R&D Expenditure (2011)
• Enforcing its Research Function
• KAIST, the first S&T Research Univ., was established in 1971
• Allocating More Public R&D Investment to Universities
• Promoting Basic Researches
• Various Programs such as BK21, WCU, WCI, etc.
• Challenges
• Shrinking S&E Enrollment
• Weak Univ.-Industry Partnership
• Into the World Class Level
43. S&T-specialized Research-oriented Universities
• Education + Research
• Supply High-Caliber S&Es to GRIs & Industries
• Conduct Mid- & Long-term Researches
• Under Different Governance
• Under MSIP
• Most Universities were under auspices of Ministry of Education
(MOE)
• S&T-specialized Universities were under auspices of MSIP
• Operational Autonomy
• Stable & Growing Funding
• Expansion
• POSTECH (Private Univ. sponsored by POSCO)
• GIST, DGIST, UNIST (Public Univ. funded by Government)
44. KAIST: The First Research-oriented Graduate School
• Korea Advanced Inst. of S&T
•
•
•
•
Established in 1971
Under Special Law on KAIS
With Government Funding
Provided High-Caliber S&Es
• Evolution
• Staffed with Oversea-trained
Korean S&Es
• Merged with KIST in 1981
• Undergraduates in 1986
• Split out from KIST and Moved to
Daejeon in 1989
• Current
• Faculty: 700+ (Int’l: 100+)
• Student: 8,000+ (Int’l: 300+)
• Functions
• Education & Research
• Theoretical & Applied
Researches
• Mid- & Long-term R&D
• Incubate
Entrepreneurs
45. Evolution of Korean Universities
400
No. of Higher Education
UNIST
2009
300
DGIST
2003/2010
GIST
1993
200
POSTECH
1986
100
KAIST
1971
*S&T-Specialized Univ.
1965
1970
1980
1990
Source: MEST (2010)
2000
2010
46. A Success Story: TDX Development Project (1977-1984)
TDX Dev.
Team
TDX Op.
Team
KT
(KTA)
(1981)
Participate
TDTF
(Telecom. Dev. TF)
(1981)
Establish
Develop
Commercialize
ETRI
(KICT)
(1977)
Participate
KIST
Spin-off
MPS
(M. of Postal Service)
Create
Coop.
Form
MOST
(M. of S&T)
TDX-1
(1984)
Samsung E.
Dongyang
E&T
LG
(Goldstar)
47. Policy Implications for Late-Comers
• Triple Helix
•
•
•
•
Major Players for Modern Innovation
Each has its own designated Role
Collaboration among Triple Helix is Essential
For Development, Which Player should go First?
• Western Model (Balanced Strategy)
• All Players should be developed in Balance
• Based on Traditional Simple-Linear Innovation Model
• Basic R -> Applied R -> Development -> Innovation
• Assume Automatic Spillovers
• Korean Model (Unbalanced Strategy)
•
•
•
•
•
Under very limited framework conditions
University vs. GRIs
Korea chose GRIs to take a lead for Catching-up
Later, promote Research in University
Essence is Education!
48. Question 6: How to Renovate GRIs?
• Roles and Outcomes
Chabols do not need GRIs anymore for their own innovation.
SMEs not satisfied with the role of GRIs
Activities of TT and Spin-offs very weak
Universities getting better than GRIs in basic science and research
Question 7: Universities at risk?
• Dependence on Foreign Universities
Recruiting professors mainly educated in the US
Excellent students studies overseas, mainly in the US
Brain drain vs. brain gain
49. • Very basic problem of population structure
Number of students decreasing steeply
No graduate students in many universities: Are the professors in those
universities able to conduct researches without assistance from students?
Unbalance between the number of Ph.Ds (70%) and the portion of R&D
expenditure (10%)
Source: KOSTAT (www.kostat.go.kr), recited from http://misto.tistory.com/51
50. Contents
• About STEPI
• Status quo of Korean Innovation Activity
• Evolution of Korean STI Strategies
• Players in Korean STI
• Epilogue
51. How Has Korea Evolved?
FACTORDRIVEN
INVESTMENTDRIVEN
INNOVATIONDRIVEN
WEALTHDRIVEN ?
U.S.
Japan
Korea
1960s
Korea
1970s
Korea
1980s
Korea
1990s
From IMITATION To INNOVATION
UK ?
Korea
Current
In
Innovative
Way
52. Roles of STI Policy in Korean Development
Period
1960s
1970s
1980s
1990s
2000s
2010~
Era
ExportOriented
Export-led
Economic
Liberalization
Democrat.
Advancement
Global
Leading ?
Focused
Industries
Light
Industries
Heavy
Industries
Assembly &
Processing
Industries
ICT
ICT and
Diversification
Services/
Fusion Tech./
Green Ind. ?
Compet.
Factor
Cheap Labor
Skilled Labor
Capital
Investment
Technologies
S&T
Innovation
Advanced S&T
Innovation ?
S&T Policy
Turn-key
Capital
Import/ Tech.
Learning
Internalizing
Imported
Tech./
Reverse Eng.
Modify
Imported
Tech./
Develop
Domestic Tech.
Advancing
Tech. Catchup/ Large Gov.
R&D Prog.
Focus on
indigenous
tech./
Systemize
S&T Prog.
Globalize
S&T/ Focus on
fusion tech.
and green
growth ?
Paradigm
Change
Imitation
Catching-Up
Innovation
?
53. Challenges in Korean STI Policies
• Creative S&E and Job Creation
• Advance Education System for Creative HRD
• Job Creation for Young Generation
• Linking Basic Research to Innovation
• Overcome ‘Valley of Death’ and ‘Darwinian Sea’
• Strengthen Collaboration among GRI-Univ.-Firm
• New Growth Engines and Global Competitiveness
• New Emerging Areas incl. Stem Cell, New Energy, Brain
Research, IT-based Fusion Tech., etc.
• Mega Sciences in Space, Defense, Marine, Security, etc.
• New Science Culture
• S&T for Social Challenges
Source: Cho (2012)
54. Evolution of Korean STI Strategy
Where
should I go?
I may just
follow him!
They are too
far away!
55. Themes for Research Collaboration from the Questions
Q: Innovation policy for business?
• Market demand for innovation
policy research entities
Survey: Demand of Innovative
firms
Demand of Consulting firms
(eg) service of innovation
information
(eg) Technology and market
foresight
• STEPI
center for strategic foresight
S&T indicators team
Division of industrial innovation
research
56. Q: Evidence Based Policy?
• Indicators and indices
• Technology Barometer
TEK/VTT + STEPI
Korean case addition
• Impact analysis
• STEPI
S&T Indicator team
57. Q: Many articles and patents, but
then?
• R&D productivity
Comparative study among
countries including Finland and
Korea
Comparing the productivity of each
area of University, GRI and Industry
• Technology transfer policy
• Entrepreneurship among
researchers
• STEPI
Division of Innovation Policy
Research
Division of Basic & Public Research
58. Q: Still “Select and Concentrate”?
• Macroculture of National
Innovation System
From bureaucratic management to
autonomy
Entrepreneurship
• Incentive Mechanism and
Behavioral Approach
• STEPI
Division of Innovation Policy
Research
59. Q: One company risk?
• Finnish Experience and
potential risk in Korea
Nokia and Samsung
• Not only Samsung
Impact of chabol companies in
Korean economy and innovation
Historical experiences of overleverage
• STEPI ?
some criticizing scholars of other
organizations in Korea
60. Q: How to renovate GRIs?
• Case: VTT renovation
Renovation and corporatization
• Benchmarks?
Fraunhofer’s matchning
mechanism
• STEPI
Division of Basic & Public Research
61. Q: Universities at risk?
• Demand and Supply of HR
• Under population of young
generation but Over population
of the high-educated
Going global
Reunification
Much more and faster growth with
Disruptive Innovations ?
• STEPI
Center for S&T Human Resources
Policy