Top 10 tasks of Korea's R&D policy for 2009

R&D ? What is R&D? ဒီေဆာင္းပါးေလးကို ဖတ္လိုက္ျပီးခ်ိန္မွာ အေတြးေတြ အမ်ားျကီးရလို္က္ပါတယ္။ ကိုရီးယားမွာ R&D ကို စတင္ျပီး အေကာင္အထည္ေဖာ္ေနပါျပီ။ R&D ဆိုတာ တကယ္ေရာ တိုင္းျပည္ တစ္ခု အတြက္ လိုအပ္တာ အမွန္ပဲလား......... ေအာက္ပါ ေဆာင္းပါးေလး ဖတ္ျပီး စဥ္းစားျကည့္ျကစို႕

This is the first in a series of articles introducing the Korean government's R&D policy. Researchers of the Science & Technology Policy Institute will explain Korea's R&D initiatives aimed at addressing major socioeconomic problems facing the nation. The following piece was collectively written by STEPI researchers. - Ed.

With the international economic outlook looking grim in 2009, nations around the world are seeking to revitalize the global economy through creating jobs and developing new growth engines. Naturally, "green growth" has been given high priority in major nations as it can boost economic growth while reducing environmental damage. The Korean government also presented a series of strategies and plans for achieving green development including "Low Carbon Green Growth" and the "S&T 577 Initiative."

More recently, the government mapped out major science and technology policies and a 10-point agenda for 2009. Under the policies, advanced science and technology can make a great contribution to Korea. The following is a brief introduction of the top 10 tasks.

1. R&D projects immune to rocky economic conditions

Under the economic downturn, investment in R&D usually declines sharply. To prevent this trend from happening in the sluggish economy and to secure growth potential, the Korean government set up a new investment strategy: expanding financial support to enhance the technological innovation capability of small and medium-sized enterprises; launching R&D projects in areas where active private R&D investment can be induced; and focusing efforts on new growth engines like green technology.

2. Combining "Green New Deal" and "S&T 577 Initiative"

In the face of a dire economic recession, low carbon and eco-friendly growth has emerged as a central development strategy in many nations. Korea is now facing the task of shifting its development approach to an eco-friendly one and generating new growth engines. Korea plans to enhance its R&D capability, select good investment sectors, and secure and distribute resources worth the investment by combining the government's Green New Deal plan with the "577 Initiative" - a vision aiming to raise the R&D share of GDP to 5 percent by 2012, make Korea the world's 7th largest R&D powerhouse and foster seven major technologies.

3. Promotion of societal innovation

Societal innovation is drawing more attention as people increasingly look to science and technology (S&T) for solutions to social problems. Societal innovation refers to innovation in such fields as energy, health care, hygiene, transportation, communication, housing and the environment. Innovation in these areas can improve the quality of life and help achieve sustainable development.

Developed countries have recently been cultivating "social enterprises" as a mechanism to promote societal innovation and thereby improve the efficiency and effectiveness of public service. A social enterprise is an organization whose central goal is not maximizing sharehold value but attaining their social and environmental goals.

With the coming of the global economic crisis and worsening unemployment problems, social enterprises can play a critical role in overcoming the crisis and developing green technologies. In addition, promoting "Small Science" can be an option for resolving the social problems of local communities, including the environment, health care, security and safety.

To this end, universities, research institutes, cooperative organizations and social enterprises in local areas need to cooperate in regional innovative projects. The government needs to promote the "open science initiative" aimed at expanding the social safety net through science and technology. The program calls for increasing investment in health care and medicine for a better quality of life.

4. Ensuring job security for R&D workforce

As the global financial crisis has caused a drastic decline in consumption and production, R&D investment is expected to fall further and employment generated from R&D is also likely to shrink. Since the 1997 financial crisis, researchers and engineers have dramatically reduced in number in Korea. Without continuous R&D investment in newly emerging areas such as renewable energy and fusion technology, we will face massive job cuts in the R&D sector, which in turn could impede the sustainable growth of S&T in Korea. Cultivating outstanding human resources in S&T requires more time compared to other sectors.

In addition, a shortage of experienced workers resulting from the lack of support can have a negative impact on securing brilliant manpower in S&T. Measures should be taken to prevent the loss of human resources in the R&D sector and reduce the number of early retirements, which are likely to be massive. The government should first train scientists and engineers at small and medium-sized companies and ensure job security.

Second, scientists and engineers should get financial support in the form of a tax deduction when they are recruited. It is necessary to promote a "Green New Deal R&D Program" to finance the recruitment of young researchers. Also, retired researchers and scientists can be utilized for consulting SMEs and providing technical assistance to developing nations through the Official Development Assistance program.

5. Development of venture investment

Small and medium-sized companies in Korea suffer from weakened competitiveness, which results from insufficient investment in S&T. For example, the elasticity of total factor productivity with respect to SMEs' R&D investment lingers around 0.171, far lower than 0.263 of big companies. The weakened competitiveness of SMEs has lowered the share of exports in these companies' total sales from 42 percent to 32 percent, while reducing the number of companies engaged in exporting from 30,538 to 25,690.

In 2009, facility investment by SMEs is highly likely to show a steep fall. To deal with this problem, it is necessary to make it easier for companies with viable technologies to access financing. For this, the government needs to expand a technology-based financing system. This requires the establishment of a technology assessment system that helps financial companies provide funding to venture firms.

The government also needs to help private venture capital companies develop technology evaluation models that they can use in extending financing to start-ups.

It is necessary to ensure that SMEs which won the New Excellent Product Certifications have access to finance technology. Through such efforts, the government can enhance green technology and secure a new growth momentum.

6. Advancing industrial structure by boosting R&D service

In advanced countries such as the United States, the United Kingdom and France, the service industry and related employment make up around 75 percent of the national economy. Until recently, Korea has put its emphasis on the manufacturing industry, underestimating the benefits of the service industry. Now, the Korean economy is transforming itself to a "service economy" and employment generated from it is on the rise. But public and private R&D investments are still focused on the manufacturing industry.

Furthermore, the current laws and regulations on R&D are focused on the manufacturing industry and, as a result, are hard to be applied to the service industry. Therefore, reforming laws and regulations on private investment should be the top priority. In line with that, the government would do well to fund R&D in the service industry aggressively to encourage corporate investments that can lead to new business operations and a value chain. Moreover, the share of service R&D investment in the national R&D projects needs to be expanded as well.

7. Dealing with aggressive policies of other nations

The Obama administration has declared comprehensive plans for green growth in an effort to revitalize the crippled economy and to secure national competitiveness. Under the plan, the new administration will pour $150 billion into S&T to create 5 million green jobs and advance basic research and development for the next decade. The two key S&T policies of the Obama administration are summed up as "Balanced Innovation Policy" and "Aggressive Energy and Environment Policy." The first is to secure advanced S&T in a way to overcome a set of challenges that the world is facing in this 21st century and to support public-private partnership and manufacturing extension partnership. The second is to maximize the power of core technologies through investing $10 billion into cutting-edge technologies such as renewable energy, supporting the biomedical research field and deploying wireless broadband.

What is worrisome for us is that the U.S. government's aggressive action to revitalize the economy could lead to a rise in protectionism. To avert such a possibility, the Korean government needs to strengthen cooperation with the United States, especially in the energy and environment areas. It is also necessary to initiate "Global Partnership for Green Growth" aimed at cooperating with member nations of the G20 to ensure sustainable S&T enhancement and sending Korean IT experts to developing countries.

8. Establishing the International Science Business Belt

One of the Korean government's top S&T policy priorities is the development of the International Science and Business Belt. The ISBB is designed to strengthen Korea's S&T capabilities, secure high value-added core technologies, and create a virtuous cycle in R&D. The basic concept of the ISBB is to make Korea become a global hub where science and business are united based on basic science in a creative environment. What is important in promoting the ISBB is that systematic and well-coordinated efforts should be a prerequisite for reaching a public consensus among all stakeholders, including the central and local governments, the National Assembly, S&T and industrial circles.

ISBB should cover three values: developing fundamental technologies; being a hub for future-oriented industries; and achieving regional development. To do so, a forum for multi-dimensional discussion of the issues should be established and pre-assessment of the possible scenarios regarding the future of the ISBB should be carried out.

The three scenarios are:

Optimistic scenario: A virtuous circle is created with cutting edge technology R&D leading to successful commercialization of the research output, which in turn contributes to the development of regional economies

? The belt will develop into science-technology cities that combine a great residential environment, an excellent education system, and art and cultural spaces.

Neutral scenario: The construction of the Asia Basic Science Institute and an accelerator will help the government attain its goal of attracting scientists with international reputations from around the world.

? When breakthrough discoveries of brilliant experts and institutes from the science-technology cities are not successfully commercialized or linked to business firms, the belt can be degraded into another Daedeok R&D complex.

Pessimistic scenario: A corporate city with state-of-the-art R&D institutes is set up in the belt.

? The planned science-technology belt fails to attract the attention of internationally recognized scientists and a city with science-based industries will be created in the regional cluster.

9. '5+2 Integrated Regional Economic Zones'

In this era of knowledge-based capitalism, local competitiveness is a key to national competitiveness. However, in Korea, fierce competition and conflicts among districts are pervasive, which undermine local development. To upgrade local competitiveness, advanced countries like Britain, Japan, France and Germany divide their administrative districts and hand over authority of the metropolitan cities to broader unit areas. The current administrative division based on cities and provisions makes it impossible to effect economies of scale and network.

Therefore, the establishment of a great sphere economy is needed to connect links among industrial value chains. To this end, the government is planning to transform its local development policies that focused on 13 provinces and cities into a new type of local development plan based on seven integrated regional economic zones. The new development strategy calls for maximizing value-added creation by fostering one or two strategic industries in each zone. These industries will be fully integrated from R&D to production and marketing with the entire upstream and downstream activities taking place in one region.

The government needs to adjust existing local innovation cluster development strategies, road-maps, and other policies to fit into new "5+2 Integrated Regional Economic Zones" plan.

10. Cooperating with the North in S&T development

The Korean government has pursued coexistence and mutual prosperity with the North, proposing a "Vision 3000: denuclearization and openness" policy. However, the North has refused bilateral conversation, insisting that Seoul give up its new policy. There are many possible chances that the North can join in international S&T cooperation as the United States has relaxed restrictions on exports and took the North off the list of terrorism-sponsoring nations. Science and technology can provide breakthroughs in South-North relations, given its role in disabling North Korea's nuclear facilities, dismantlement of nuclear materials and peaceful use of nuclear energy.

North Korea is now focusing not on the heavy chemical industry but on the car and IT industry to achieve economic success based on communism, military power and S&T. The Korean government would do well to build a government-sponsored cooperation center which can function in various ways: planning S&T projects, hosting seminars, exchanging information, supporting joint research, and running a liaison office.

In the future, more cooperation centers will be needed to train workers and transfer technology. By providing material support for the North, the government can nurture domestic companies and strengthen ties between the two Koreas. In addition, on the basis of improvement and progress in bilateral ties, those cooperation centers will get branches in S&T special zones like Daeduk in the South and Pyongsung in the North.