'Knowledge without Innovation is just an Accessory'
- National Innovation Forum being held under  the sponsorship of Samsung Electronics

"Knowledge alone is not enough; you have to be a strong innovative country to be able to step up to become an advanced country." This was the message that the Korea Economic Daily could deliver to the business community in one word after holding the National Innovation Forum.

The forum took place at the Seoul Hilton Hotel Convention Center on Sept. 5. About 550 government officials, business leaders, and academics attended the forum greater than the 300 who applied for the meeting. The Korea Economic Daily, the Korea Industry Research Institute and Monitor Group organized the forum with Samsung Electronics as a sponsor. The economic daily reported that the imitation strategy that powered the economic growth in the past 40 years has reached its limit and innovation is the only way to boost national competitiveness a step further. During the five-year rule of the people's government, "knowledge" was important for national development. But it would not be able to go anywhere without innovation, which is like threading precious stones called knowledge to make jewelry. The world is moving in that direction already, the paper reported. Partners for Innovation, the research organization for reform under the European Union, issued a new formula for GDP with a definition of "knowledge reform" equals GDP.

What is meant to say was that knowledge and innovation have to be developed at the same time for a country to be a super advanced country.

The paper said the choice for Koreans has been made clearer as they have accumulated manufacturing expertise and technology during the process of industrialization and have been exposed to the knowledge-based economy due to the rapid progress of digitalization. A "strong innovation" country is a fatalistic vision that Koreans should accept. However, the problem is innovation has not had good results, turning around in vacuum. According to a survey conducted by the economic daily and the Industrial Research Institute on 2004 innovation capacity index, poor conditions for leading hardware innovation resources to actual new products and the development of new technologies have been the cause for lack of progress of innovation.

Anti-business sentiment, excessive regulations and poor labor relations made it hard for industries to come up with market leading innovative products, according to the survey. Another problem is the lack of innovative discipline. Innovation should be able to turn a new idea into a commercially valuable product or service so that it would be able to make better products. Innovation should be redefined as a force to create a new value that employees, people and market want as it has been too often abused and mixed with the reform in clearing corruption and irregularities with reform in public sector not able to find its direction often. If innovation is taken as meaning the creation of new value, the objective for national innovation becomes clearer, which is to maximize the value that people feel.

Through this work, we would be able to make new citizens out of non-citizens who want to immigrate to other countries, corporations that want to relocate plants to China, and those foreign investors who do not want to invest in Korea through value innovation.  Innovative enterprises and organizations stood out because of their clear targets, the will of leaders, and the participation of their staff. Their services to customers, the ultimate deciders of value, also cannot be left out. These become clearer as you review the successful cases of Samsung Electronics and the National Police Agency.

Samsung Electronics has been exploring new markets for its products as Value Innovation as the key word and as the VIP Center which it established as the strategic headquarters. This center exclusively handles labor training, marketing, production, and product development team. The product development team included even those from subcontractor firms with its objective being the determination of a concept of a product to be developed following the analyses of market, customers, and rival products. The company has been able to save some 2.4 trillion won in marketing-related expenses in the last three years.

Lee Dong-jin, head of the VIP Center, said companies have to depart from their traditions in many occasions for Value Innovation and develop a new product which rival companies would not be able to match under a new cost-structure. He also pointed out such things as a total support from top management; clear systematic objectives and detailed systems, and strengthening education and a large pool of innovative personnel.

The case of the National Police Agency is more dramatic than Samsung's. The participatory government of President Roh Moo-hyun called for an innovative reform of the policy agency and the agency brushed it off as just another ploy by the new government to shake things up. The agency set up a 30-man team to carry out the task in April. The team made up the phrases for its vision, "The Best Policy Force in the World and the Safest Country in the World" The team strained its efforts to have the police force participate in the drive, along with the help of the people.

The team found out that the personnel structure and reorganization of police stations were the most pressing matters for reform.

The team went into action as early as possible and as a result, both issues have been settled in innovative ways. Police changed its priorities so that their main task is to prevent crimes, protect the people, not the arrest of criminals as has been done traditionally to be closer to people. Lee Jong-woo, chairman of the Presidential Policy Planning Committee at Cheong Wa Dae, recalled that we have been running with our eyes looking straight ahead only to speed up our economic progress. It was the same with the industrialization and in overcoming the financial crisis in 1998. We were in such a hurry all the time. As a result, we have been able to achieve what no other country did in such a short time. Now, we are finding out that our way of economic growth has come to its limit with no room for further growth.

We now find ourselves pursued by developing countries with copied development strategies from us. In addition, we are saddled with many problems such as the growing gap between the rich and poor, an educational system not being able to produce creative labor, a slow down in industrial growth power, rapidly aging society, confrontational labor-management relations, stagnant provincial economy, and a rapid increase in the number of irregular workers. These issues, coupled with the expansion in the number of poor families to name just a few.

These problems can only be overcome when we have new paradigms; We have to develop our own creative technologies, not those copied from others. We have to revolutionize our educational systems  to train creative manpower, and we have to make regional economic entities a major player in innovating our value. We have to nurture innovative small and medium-sized firms so that they would make good companions for development with large firms. We also have to renovate finance and its market to an innovation-friendly one with labor relations improved under mutual trust and cooperation.

In the meantime, Dr. Hitendra Patel of the Monitor Group, said Korean firms need 9 guidelines to lead their innovative changes; Most of all, top management should lead the drive. It has to make the drive top priority of its firm and set targets accordingly, along with a system to discover the company's potential. They also have to set up a platform for innovation. They have to decide on the sector priority for innovation drive on the platform. Sony's main theme for innovation was miniaturization, DuPont flexibility, and Motorola communication.

Becoming an ambidextrous organization requires you have to retain the old system and pursue new ones.  If you do not have the ability to adapt, the failure will be the end result.   nw