Korea: Poised for Core,
Original Tech Development

MOCIE to implement open-type, technology innovation policies on technology development and commercialization

The government strives to invigorate the technology market by implementing technological innovation policies designed to harmonize technology development, technology brokerage and technology demand say a senior government official in charge of technology policy.
Kim Kyung-shik, director general for technology policy at the Ministry of Commerce, Industry and Energy (MOCIE), touched on a change on policy paradigm on technology development and commercialization during an interview with NewsWorld. He stressed the need for the nation's implementation of open-type R&D policies based on collaboration on the development of core and original technologies among nations and industry, academic and research circles. The following are the excerpts of his interview.
Question: The Korean-Israeli Forum on Technology Commercialization was held at the Coex on July 4. What our policy-makers and organizations should learn from this forum?
Answer: The just-ended Forum was significant in that it explored how to adopt policies on commercialization of technologies by making the most of the experiences Israel has gained over the commercialization of its technologies.
Israel has been successfully adopting government support policies designed to raise commercialization of advanced industrial technologies. Originating from a government program aimed at attracting foreign capital, the Yozma Fund was created in 1993 as Israel's first venture fund to play leading roles as the mutual development of the venture capital and high-tech fields. The number of funds in Israel's private venture capital market has risen from one in the early 1990s to 88 since the establishment of the Yozma Fund.
The Weizmann Institute of Science, Israel's leading center of research and graduate education, established the Yeda Research and Development Co. responsible for technology transfer and commercialization. The research institute has been dispatching its R&D manpower into the industrial sector with a focus on investments into securing core and original technologies and the introduction of an incentive system that offers a reward for commercialization.
Taking its cue from Israel's policies on technology commercialization, Korea is striving to explore ways of promoting comprehensive mutual collaboration, including joint technological ties-up with foreign countries and commercialization channel buildup while updating and developing relevant policies by continuously following up policy trends of advanced countries and developments of technology markets.
Q: In an era of competing for technology, how many core technologies each country has developed or has acquired an upper hand over becomes a yardstick for measuring each country's competitive edge. Will you elaborate on plans to develop strategic technologies as next-next-generation growth engines?
A: The reality is that the winner takes it all in an era of technology competition, so it is essential to secure strategic technologies based on national growth strategies to win a technology competition race. In particular, what is quite more required to enhance industrial competitiveness is to secure core and original technologies, departing from a stage of copying those of advanced countries.
The government has been implementing the top 10 next-generation growth engine projects that began in 2003 and will complete in 2008. It plans to raise the nation's growth potential through the exploration of new growth engines and develop strategic technologies that will serve as the so-called breadwinners of our economy.
In this regard, MOCIE has designed the top 15 next-next-generation strategic technology fields, including semiconductor, display, automobile/shipbuilding, textile/clothes, production system, chemical process material, metal material, bio technology, next-generation robot, digital convergence, next-generation medical equipment, nano technology infrastructure, production infrastructure, clean technology infrastructure and knowledge-based infrastructure. Investments into such areas during the period between 2008 and 2015 will account for 50 to 60 percent of the nation's total budget for industrial technology R&D. Initially, display, next-generation robot, digital convergence and nano technology infrastructure and production system pilot projects are executed during this year. After examining the pending problems that could surface in the process of the pilot programs, the ministry plans to work out by the end of this year implementation regimes and regulations for inaugurating full-pledged projects for next year.
Starting 2008, MOCIE will fully inaugurate technology development projects to secure core and original through more than six months of advance planning and provide a package of support ranging from technology development to infrastructure buildup, manpower cultivation, patents and standards and thoroughly assess the outcomes of the whole cycle of each project (advance planning-research & development-technology transfer-commercialization) to raise efficiency for budgetary support.
Q: Will you tell our readers about the achievement of R&D projects the government has carried out?
The government launched national R&D projects in the 1980s, many of which yielded achievements. Take a look into a few success stories about D-RAM, commercialization of CDMA (Code Division Multiple Access) and key parts of high-definition television (HDTV) and automobile engines that created national wealth beyond their R&D outlays, Thanks to such aggressive government policies, such domestic mainstay industries as shipbuilding, display, handset, semiconductor, automobile and steel have secured a competitive edge in a short period of time to rank between first and fifth place.
A survey by the IMD World Competition Center showed that Korea placed sixth and seven in terms of technology and science competitiveness, respectively, among the 55 surveyed countries.
Such government efforts serve as a catalyst to boost corporate investment and facilitate infrastructure expansion. The portion of industrial technology R&D outlays out of the nation's total R&D budget constitutes a merely 24 percent, but the government's determination for development becomes a symbolic means of inducing corporate concern and investments.
However, the size of our government's R&D budget stands less than that of a large U.S. company. Microsoft of the United Stated poured $7.8 billion in R&D investments during 2004, but our government's R&D outlays amounted to a paltry $5.2 billion. I see it vital for the government to continue to boost R&D investments.
In order to make commercialization successful, the government's role in creating markets and building up infrastructure is important on top of its role of supplying money. The government needs not only to boost demand through its own purchase of new technology products, but also to build up such infrastructure with far-reaching spill-over effects ranging from technology manpower cultivation to research equipment installment, establishment of standards and support for design.
The government needs to play a part in building up industrial constitution. Unless original technology is secured, the bulk of the benefits will go to only foreign parts makers. A case in focus is the commercialization of CDMA. The nation paid 1,480.8 billion won in royalties to a foreign company for the recent three years. We need to establish a system of making a virtuous cycle of reinvesting the proceeds arising from fished products and system development into such background linkage industries as parts and materials makers. Korea becomes the No. player in the global LCD market, but its localization of materials stands only at about 30 percent. Korea'localization of semiconductors and display equipment hovered at a petty 26 percent.
Q: Will you tell us about steps to facilitate technology commercialization?
A: Our government is shifting from the focus of its R&D system from the input/supply-oriented system to the outcome/demand-oriented one to ratchet up R&D efficiency. As it comes to an efficient system of developed technology transfer and commercialization, our nation lags behind advanced countries in many aspects. For example, the public technology transfer rate for Korea stood at 20.3 percent, quite lower than 28.3 percent in the United States and 41.6 percent in Canada.
Lately, advanced corporations seek to utilize outside technology and pursue active technology transactions under the 'Open Innovation'system, but companies in Korea have a tendency to ?nvent it yourself,?a factor for hindering technology transfer and commercialization.
In a bid to rectify the practices, the government strives to adopt policies to harmonize technology development, technology brokerage and technology demand (on the part of corporations) to invigorate the technology market.
As to technology development, technologies that can meet the demand of the market should be developed for the purpose of commercialization. We plans to establish a demand-oriented R&D system so that technologies, demanded by the market, can be developed by implementing strategic technology development projects as future growth engines and conducting a thorough advance planning in the selection of R&D tasks.
As it comes to technology transfer, the government has set aside 10.2 billion won to provide support to the technology licensing offices of universities and research institutes as part of its efforts to step up the public sector? technology brokerage capacity.
The government seeks to encourage the public and private sectors to provide financial support worth 3 trillion won to help corporate technology consumers lessen their financial woes they face for commercialization.
It plans to revamp public organizations?mandatory purchase of New Excellent Product (NEP)-certified items to secure a demand base in an initial stage of commercialization. The government also plans to continue support for fostering technology management manpower, which is also getting significant.
Q: Will you explain the tasks on technology policies the government needs to implement and their future direction which Korea should steer?
A: First of all, we should shift our mindset toward technological innovation. Korea has so far grown with the introduction and application of technology from advanced countries in exchange of the payment of hefty royalties. Korea has so far been able to secure competitiveness to some extent through a duplication-type technology innovation strategy aimed at innovating process technologies based on the introduction, assimilation and improvement of original technologies of foreign countries and key parts and materials. Corporate and university research institutes are bogged down in the limitations of a close-type technology innovation strategy in which they have made efforts for their respective own advances.
Days are gone when the size of growth depends on how quickly and at what price technologies of advanced countries can be copied. Now is the time when our nation, which has been stuck with fierce competition with advanced countries and a chase from such new-comers as China, should concentrate on the development of it own creative technologies rather than duplicating them, In other words, I understand that the nation? implementation of open-type R&D policies based on collaboration on the development of core and original technologies among nations and industry, academic and research circles will hinge on whether Korea can secure future growth engines. Accordingly, our ministry is making its utmost to work comprehensive, systematic support polices designed to ensure technological innovations in a bid to help our economy going higher one step beyond current levels.
Speaking in specific terms, we will put more energy into executing creative technology development projects designed to secure core and original technologies, while striving to shift into support systems and programs designed to facilitate technological collaboration among nations as well as industry, academic and research circles.
MOCIE plans to expand technology financing support based on more advanced technology assessment, while trying to advance national standard systems so that the private sector can maximize the achievements of its technological innovation by spearheading global standardization. The ministry also strives to establish a national task of establishing a regime of creating, utilizing and protecting strategic knowledge properties. nw

Kim Kyung-shik, director general for technology policy at the Ministry of Commerce, Industry and Energy